How your professional services organization could actually improve
by Fernando Corso, senior director of professional services, Tribridge
Is your business running optimally? What could you be doing better? Through numerous conversations with professional services organizations, I’ve found that many do not have an accurate picture of their organizational maturity.
As a result, these organizations are not utilizing the right tools and technologies to grow and, overall, run their business better. It is vital to take an honest look at your organization’s reflection in the mirror in order to make strategic improvements.
Below, I’ve outlined my recommendations on how to level-set and assess how your organizational maturity stacks up.
Establish the right framework
The first step is to establish a framework to measure against peers, identify areas for improvement and gauge progress over time. At Tribridge, we use the following framework, based on the PS Maturity Model, when helping organizations determine their most productive investments.
This framework considers five distinct organizational performance pillars:
- The organization’s vision and the solutions (offerings) that it provides to its customers.
- Client relationships. Every aspect of the organization that interacts with external customers. Sales and marketing are an integral part of a client relationship. It also includes service, support and other optimization services groups.
- Human capital. The organizational focus to attract, develop and manage human talent is one of the biggest challenges.
- Service execution. The groups that are in charge of delivering the solutions offered by the organization. They focus on efficiency (project and resource management) and quality.
- Finance and operations. Realizing the value provided to customers and maximizing profitability over time.
Next, we consider the five stages, or levels, of maturity. While each pillar at your organization could be at a different stage of maturity, the following is a view of the organization as a whole. See if you can identify your current level:
- Level one: informal. This is where most get started. Two or three partners with experience in a particular field start a company to provide their expertise to, very often, their prior employer or related company. The organization might hire additional resources over time, but the organizations at this stage are very opportunistic. Everyone wears multiple hats and the most important driver is revenue generation (get the next project or customer). At this stage, the company is not focused on efficiency.
- Level two: functional excellence. Your organization has grown and evolved. Its size (50-75+ FTEs) allows for dedicated groups. There is differentiation between sales and delivery and there is probably a developing back office group. Specialization allows for best practices to develop but, most typically, these processes live within their specific area or silo and are not integrated throughout the organization. Level two is where most organizations live.
- Level three: alignment. At this stage, standard processes have been established across your organization and there is a consistent and repeatable delivery methodology. Processes are mapped and developed with the customer and project flow in mind, not the specific organizational groups.
- Level four: organizational excellence. With the foundation of an aligned organization, you can now develop and track precise metrics and controls — visualized as organizational dashboards — and manage by exception. For example, if a project profitability goal of 50 percent is established (could be by solution/offering), the management team can focus on the 10 percent that are below expectations and not the entirety of project portfolios. When analyzing projects, customer overall profitability including sales costs can also be taken into account.
- Level five: continual improvement. With your organization performing at all levels and the appropriate metric tracking in place, the focus of the management team is improving process efficiencies and developing new solutions or offerings for your customers.
Why is the maturity framework important?
As your services organization evolves, your organizational structure needs to adapt. Growth and improvement bring new technology and system requirements.
These levels of maturity are associated with specific metrics for every performance pillar. Here are a few examples from the PS Maturity Benchmark:
- An important delivery pillar metric, resource billability, tends to be between 65 to 70 percent for levels one and two and 70 to 80 percent for levels three to five.
- A client relationships pillar metric, win to bid ratio, tends to be between 35 to 50 percent for levels one and two and 50 to 65 percent for levels three to five.
The metric ranges for specific verticals allow us to compare organizations and gauge their maturity level.
For instance, here is an example pertaining to the client relationship pillar. A customer relationship management system will probably be the first requirement for a level one or two company. A customer experience assessment doesn’t become a priority until processes need to be standardized and integrated at level three.
Utilizing a maturity framework enables you to identify your current status and allows for peer comparison and tracking metric improvements over time. Once that’s done, you can plan organizational and system evolution. It is crucial to start by making sure your investments bring the highest levels of return and are aligned with the organization’s vision and strategy.
About the author
With nearly 20 years of domestic and international consulting experience, Fernando Corso is focused on the strategic planning, development and delivery of Tribridge solutions for the professional services industry. Fernando’s expertise includes business process consulting, software selection, implementation, development and integration for customers spanning the professional services industry.
Check out Tribridge professional services solutions and see how it helps organizations use the right tools and technologies to run their business better.
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