Tuesday, April 20, 2010

Consultant Utilization part 2

I have had some very good feedback on the discussion about consultant utilization, so I thought I would add part 2.

The second big secret to lifting utilization and billable hours is to BUDGET TIME. This does not mean client budgets, project budgets or $ billable budgets. What I mean here is to plan, budget and forecast your entire team by the hour. Yes - Budget Every Hour. This must be a central plan that everyone can see, access and update.

Every practice manager needs to know at all times five pieces of information regarding the next 30, 60, and 90 days.

1. Total Hours: This is the total number of hours you could ever sell in a given period of time.
2. Billable hours: This is the time for which you have a signed contact or signed statement of work. the date and time is locked in.
3. Forecast: This is the time that you think will happen and when you think it will happen - but has not been signed off by a client yet.
4. Non Billable: these are the planned hours that will not be charged to clients. This includes training time, Free time donated to clients and time spent on internal projects.
5. Available hours: This are the unallocated hours to which no work has been assigned. This is what you need to go out and sell.

The only way to know all of the above is to schedule by the hour. Literally have a an hourly plan per consultant for every day, week and month.

Now lets set up a little metaphor. Every hour is a unit of inventory. You sell hours. Work with this mental picture - Your professional services business sells light bulbs. Every hour each of your consultants walks into the warehouse and picks up a new light bulb and there are two things they can do with it. Option 1: they walk outside and give that light bulb to a paying customer OR Option 2: they walk outside and smash it on a large rock.

So the trick now is to stop people smashing their light bulbs. (I know the metaphor should stop now). Daily time sheets was a starting point. Now the second step is to manage strictly to your new schedule. What does that mean?

1. The schedule must right: It has to be managed daily, updated, time moved around constantly to ensure it is up to date. But at the beginning of every day this is the only truth in regards to who is where and what they are doing.
2. Make sure the daily time sheets reflect the scheduled forecast. This is where consultants are going to start yelling at me again. If the schedule says you will be charging client A for 8hrs work today - make sure there are timesheets entered at days end to match. If there was not >8hrs entered as billable - find out why. Of course in many situations it will be a legitimate reasons - but there are also a whole bunch on reasons for billing less that re not legitimate.

a. Client changed their mind on the last import so could not charge them: NO EXCUSE as you have a signed document stating what they wanted. The worst case is you fill that time with an additional task.
b. We had to reinstall windows, so we can not really charge for that: NO EXCUSE of course you can and you must charge for you valuable time.
c. Client turned up late so we did not start until 10am. NO EXCUSE their tardiness does not impact on your billing.
d. I got stuck in traffic. NO EXCUSE work an extra hour at the end of the day or dial back in from home to finish the job.
e. They said they were short of cash this month, so I did it for free: NO EXCUSE as it is not your decision to smash any light bulbs.
f. I finished the first part of the job early so moved on with something they asked for that was out of scope. NO EXCUSE as you now have started unplanned work, that is not scoped properly and may cost you many more hours than planned.

The above process provides not only a valuable process, but also valuable information:
1. This process will expose any serial under billers. These consultants do not mean to smash light bulbs, but find it easier to give a few hours away here and there.
2. This process will expose the lazy consultant
3. This process will show you who is working too hard, and needs support or a pay rise.
4. This process ensures you are focused on the hours for which you do not have a buyer. It gives you and you sales teams a chance to sell the hours before they are dashed against the rock.

Now there will be consultants that will not like the above process. If you have nothing to hide, and want the best and most profitable outcome for you employers then this will work well for you. Most of you are already doing this process in your heads - but by formalizing the process you will undoubtedly increase your utilisation levels.

Sunday, April 18, 2010

Consultant Utilization

I have had a number of conversations with our partners recently about acceptable utilization percentages for their consulting teams. There is no golden answer to that questions and the perfect target will depend on many factors. I have seen targets range from 60% to 95%. I want to share you you the one little gem that I have shared with these partners. Daily Timesheets.

DAILY TIMESHEETS. If you want to add up to 20% utilization (20% profitability) to your ERP practice move to Daily Timesheets today. Do not wait, do not trial it, just make it happen.

WHY: On a Monday morning a consultant has just had a weekend at the beach, playing football, reuniting with the kids. Monday is a time to attack a new week with new enthusiasm. So when you look at completing last weeks time sheets you aim to fill in 40hrs. Consultants gloss over the fact that they were onsite until 9pm on Tuesday redoing those reports after the IT department deleted them all by mistake. As long as they record 40hrs no one will ask any questions.

On a Friday evening when you are in a rush to get to your first Pina Colada it is easy to forget that: you worked through lunch, started at 7:30am 2 days in row or dialled into 2 clients from your hotel room. On a Friday it is very easy to forget that 4 hrs of time was clearly out of scope, but to keep the Grumpy Financial Controller happy you stayed back and did the work, plus you have to come next week and it might cheer him up if you do not bill them!!!

A consultant does not mean to forget time or under bill. It is not their fault but if you allow time to be entered once a week it will happen.

CONSULTANTS WILL COMPLAIN: 100% guaranteed. They will complain bitterly and repeatedly. There are plenty of reasons why your request is totally unreasonable and even irrational. You will hear the following : We have enough to worry about! It is too hard to enter the time sheets! The client will not let me on the internet! I am too busy! Are you trying to be some sort of big brother! Consultants will hate it and possibly hate you.

ENFORCE IT: This is where you MUST follow through. Insist on Daily time sheets, and call by 9am the next morning if they are not complete. Do it Every Day. Do it Every Day and the day after that. Nag Nag Nag until your message gets through.

THE RESULT: Utilisation and billable hours will increase by 20%. Do you believe me? We did it a few years ago and that is exactly what happened. When a consultant finished up at 9pm and immediately enters the time sheet - it will be for 12hrs not 8hrs. (to the consultant: it does no one any favors to flog yourself hard and then give you time away).

If a consultant knows you are going to review their time sheets every day, they get cleverer. Instead of finishing their job, and running off for an early mark at 4pm they take a walk and starting asking end users about reporting needs, new smart lists, and setting up favorites menus. That means 1 more billable hour in the day.

To the Practice Manager:
1. Make time sheets easy to enter
2. Always have projects entered and budgets set on time
3. You must be diligent and follow up.
4. Lets say you have 10 consultants, and you can add 4 hrs utilisation per week/per consultant. That's 40 hrs per week. Assuming you allow some holidays and training lets say thats 46 weeks. Let's assume a billable rate of $180p/hr. $331,000.

To the Consultant:
1. Please do not hate me for this.
2. It is in your favour. Assuming you have negotiated the correct remuneration package - the more you bill the more you get paid.
3. Clients almost never respect Freebies. Set the tone early that your time is valuable and they will pay for it.
4. Accuracy in time sheets accurately shows the Practice Manager true capacity. If the practice manager know's what you 'really do' then they can make sensible decisions to support you or grow the team.

Wednesday, April 07, 2010

Free Consulting Hour for Convergence Attendees!

Convergence 2010 will be held in Atlanta, and is the gathering place for so many of our reselling partners and customers. Many software developers use Convergence as a prospecting opportunity to find new customers (and that is important) but we have decided to take a slightly different approach to Convergence in 2010.

Any eOne Reseller or any customer that owns an eOne product (SmartConnect or eXtender Enterprise) can request 1 hour of face to face time with our consultants, developers, or sales & marketing team. eOne will be bringing an extended team to the event this year that includes 2 developers, 2 consultants (product Guru's) and 3 members of the sales and marketing team. We will be hanging out at booth #1342 during the expo hours, but we would love to spend more time with you then just a brief moment in the expo hall! So let us know what you want to discuss and we will lock in a location and a time. The topics are completely open for you to name but some things you may wish to discuss could be:

Resellers:
1. How can I best demonstrate eOne products?
2. How do Extender and SmartConnect really work together?
3. What is new and what is coming in the next builds?
4. How can we make implementations run more smoothly?
5. Questions/Comments about our support services
6. Why is your VPC 32 gig?

Customers:
1. Highlight product suggestions for our team
2. On the spot training on an area you have found challenging
3. How can I ...?
4. When is error logging going to get better?
5. How can we write custom nodes for SmartConnect?
6. What's new from eOne in regards to Microsoft 2010 release?
7. What are the training opportunities available?
8. How do we build our own Excel Templates?
9. We have some specific difficulties with an implementation - can you help me?

So please take advantage of this great opportunity to sit down one on one with our team. We will be available from Friday 23rd at 7am through to Tuesday 27th at 5pm. The only fine print on this offer is that for any meeting requested after 7pm, we reserve the right to hold this session over a beer (our shout).

We hold strongly to the belief that we are only as good as our last software release, only as good as our last implementation and only as good as our last support call. Please come and share your experiences, and ask the tough questions. To book in your hour please email Martin directly at martin.olsen@eonesolutions.com.

Note: This offer is only open to eOne customers and partners (or you can come together) attending Convergence in Atlanta. Times will be allocated on a first in first served basis.