When a new RFP lands in your inbox, your primary thought is, “How do we win this business?” After all, new business is the lifeblood of any growing consulting firm, and there is no growth without new business.
However, the work in that new RFP might include an important risk that needs to be accounted for: Are the right resources available for this work?
Asking your senior team members will usually get you a response like “we’re busy, but we can make it work”. No one wants to be the one to say “no” to a new deal, but “we’ll make it work” is not a plan; it is wishful thinking that can lead to consultant burnout and project failure. When consultants are spread too thin, deadlines slip, quality drops, and margins decrease.
The Risk Of Saying “Yes” To A New Deal
The problem isn’t lack of skills or work ethic; it's a lack of forward visibility, made worse when your firm uses spreadsheets to track timesheets and resource availability. The data in your spreadsheets only tells you what happened in the past, and at best, what is happening this week. There is no connection to future booked work, and nothing that can help you forecast future scenarios. Without a clear view of your future resource availability, you are putting your staff morale, profitability and professional reputation at risk.
Using PSA Software To See The Future
Modern PSA software not only enables your consultants to track their time in a centralized platform, it integrates with your sales pipeline to give you a forward-looking view of your future availability. When you bid on an RFP, you can create a provisional project and instantly see your resource availability if you win the deal, giving you the confidence to move forward with your best pitch, and enabling you to make resource adjustments well ahead of time. If you are short of resources with a specific skill, you can decide, based on accurate data, if it is worth hiring a new resource, shuffling existing resources to meet the demands of the new work, or even declining the RFP because it will hurt your firm’s profitability and reputation if the project fails.
Maximizing Profitability While Minimizing Burnout
In consulting, not all new work is equal – some can actually damage your team’s morale and your firm’s profitability. PSA software like Projectworks enables you to plan your resource allocation with accurate data, ensuring that the work you are bidding on will be profitable and the project will be successful before it starts. You can start your forward-looking resource planning today by signing up for a free trial of Projectworks, or let us demo Projectworks for you.
Read similar resources from Projectworks
Most pipeline coverage advice is written for SaaS. Here's how a consulting firm sets coverage by deal stage and plans for the clients it will lose.
Let’s say a consulting firm signs a $30,000 engagement in July and invoices the full fee upfront. The client pays quickly and the cash lands, but the work runs from July through September. By the end of July the firm has completed about one-third of the engagement - the project’s on track but the finance team have some work to do to match revenue with the costs incurred (the “matching principle” of having costs and revenue in the same period is a key accounting concept). Only a third of the project’s fee has been earned (because only a third of the work has been done), and the remaining $20k of revenue is deferred to a future period.
It's the end of September and expenses got a lot of love this month, with a couple of big changes you can start using today and more on the way! We've also made updates across financial reporting, resourcing, HubSpot, and invoicing, dive in to see what's new.