The Age of Profitability Enlightenment For Consultancies: Why Consultancies Are Keeping An Eagle Eye On Their Bottom Line

The recent recession had a significant effect on consulting and professional service companies. During that time start-ups were dying off in droves, and frequently, if consultants didn’t get paid before their clients failed, they didn’t get paid at all. Even worse, big corporations reined in their spending as a result of the recession, leaving consulting jobs few and far between. The good news is that the industry has come out of the recession with an iron will to survive. However, the consulting industry is vastly different than it was just a few short years ago.

Customers are more savvy and demanding: Customers want detailed metrics of where and how their money is being spent. They want to see measurable results, and they want to be part of the process.

Fee structures are tighter: This means consultant managers need to exercise better control over the company’s billable and internal salary rates in order to ensure their company’s overall financial profitability.

Companies have to be able to see the future: In the past, companies monitored their projects and resources on white boards or excel spreadsheets. The problem with these methods is that they didn’t allow for an accurate reflection of the company’s potential growth, and they didn’t track what really counted--the money flow. In today’s market, managers have to rely on more intelligent ways to track revenue and invoices. Managers also need the ability to schedule consultants based on availability and skill level, and gain critical insight into how much time is spent on projects and profitability—a must when you are delivering services with fixed-bid pricing.

Global competition: Increasingly, companies are relying on global outsourcing. According to research conducted by Gartner Inc., some companies are sending as much as 80% of their contract work offshore. And global outsourcing isn’t just about getting new programmers in India to fix bugs. It’s much more complex than that. Some of the latest trends in offshore outsourcing include:

• Multi-sourcing: Corporations are doing more and more business with multiple service providers in different countries, depending on where they can find the best skills for the best price.
• Reshuffling of skills: Companies who rely on offshore skills are rebalancing their mix of in-house skills in favor of managerial experience and business knowledge. That means in-house engineers need more project management, time management, and people management skills to adapt.
• Emergence of new services: Outsourcers are expanding their business with industry-specific solutions. Service providers in India, for example, especially renowned for their software development discipline, are now offering consulting and training in software design, development, and project management.
• Offshore handoffs: Outsourcing vendors, particularly those in India, are subcontracting IT work to newer, lower-cost market entrants in China, Russia and other countries.
• Pricing: The reality in today’s economy is that cost savings is what motivates many companies to go offshore.

Lose Track of Your Bottom Line—And You’ll Lose Your Business

The current consulting environment requires a new generation of web-based time tracking software. Today, firms need time and project tracking software that helps them optimize revenue and deepen customer relationship.

Standard Time Timesheet Software

Good employee timesheet software usually pays for itself in about a month. Standard Time Timesheet Software, for example, precisely tracks the time spent on multiple projects, thus allowing executives to bill clients and accurately manage time, resources and employees. The fact that Standard Time Tracking Software is easy to learn makes such technology even more scalable as a consultancy’s business solution. This new generation of time-tracking software can be run on a browser, Windows, or PDA phones, and includes reporting and billing features that can ensure your company remains profitable and competitive.