Operational challenges in the consulting industry
In the first place, due to dramatic changes in the business environment, we always perform deep research about critical movements and challenges of consulting business within Europe. We frequently organize focus groups discussion with consultants and discuss their problems in business operation how they can improve their KPIs. The main results are:
- Over 56% of consultants do not track profitability per each client
- More than 50% of consultants do not have evidence about cost allocation per projects
- About 61% cannot have insight into reliable margin per each project
- 45% of consultants does not have evidence аbout billable hours per each consultant and project
- Only 10% of consulting firm use some type of time tracking for consultants
- 45% of managers on projects have clean insight into what their team member does, and how many hours they achieve the required level of efficiently
- The majority of consulting firms do not have a clear insight into realistic hourly billable hours to the clients.
- When invoicing, the consulting firm loses time and efficiency for gathering information on what are tasks performed for each client and what should be billable within the invoice and how much.
See one of our interviews with a representative of a consulting firm
Jeffrey Fillips is the Managing partner of a middle consulting firm in the UK and we talk with them what is his understanding of the most critical operating challenges in the changing world.
In the beginning, let’s have a look at a short interview between our representative and Mr. Fillips:
TA: Hi Jeffrey, first of all, I have to ask you how is your business going in these critical times?
JF: Well, in general even though all of us are impacted by COVID 19 issues, we could be satisfied. Firstly we achieved growth in the last twelve months by 12%, and we increase the client base by 15%, with a very minimal client retention rate. But I trust we can better if we build excellent internal infrastructure for more control of critical KPIs.
TA: What is behind these results?
JF: Our extra effort in main areas such as human resources, taking care of our staff, continuous education in the field of leadership and development of people, and make them happy and loyal. You know, people come first, then clients.
TA: How do you keep track of consulting hours?
JF: All of my consultants record its time in excel then we put all data into one excel and make final conclusions. I believe that is not a perfect solution for us. Therefore, we do that manually. That is actually a good finding because our current position says that we have to find a better solution, more atomized, based on data processing and showing the results of productivity on both aggregate and very detailed level.
TA: Did you have client complaints for invoices received?
JF: Yes. To be honest, there is a lot of manual work in final invoice preparation. Each consultant possesses his own timesheet and then one person present cumulative timesheet per clients, activities, tasks, projects, billable rates, etc. and prepare invoice appendix. Such evidence is done manually in excel, and that is the basis for invoicing. Since manual calculation may cause errors a risk that our invoice is not fair toward clients. I think if we would automatize this process, we significantly decrease complaints from Clients. In the end, I said above, client loyalty is the one of the most important KPIs in these times.
You know, today it is very tuff to acquire new clients, so current loyal clients are an essential part of our mission.
TA: Do you have the impression that you generally lose your time considering the above conclusions?
JF: Definitely yes, but time is a critical resource in our business.
TA: How do you keep track of your consulting hours?
JF: Unfortunately we do in excel or some others not efficient tools for that purpose. For those reasons, it happened that we sometimes missed invoicing our real working billable hours to clients. On the other side, in some case we invoice more than the client expected, so that may have a negative impact on the relation with the client and confidentiality in the bottom line
TA: Do you have the impression that you generally lose your time considering the above conclusions?
JF: Definitely yes, but time is a critical resource in our business. And not only time, but productivity and efficiency of time performed.
TA: What about remote work, is that an additional challenge for you?
JF: Yes, we have a critical challenge in time tracking for consultants who work remotely
TA: Do you have some solution for how you can overcome above mention issues?
JF: Definitely, we are going to implement time tracking for consultants with the application of some type of online time tracking platform. Moreover, the investment is very minimal; I am ready to invest a few USD per each consultant monthly.
TA: In the case, you have an excellent dashboard for each consultant showing how many billable hours he achieve, what is (average) hourly rate, what is time utilization (billable time / total working time), do not you think that you can make better assessment of your employees and offer them more fair salaries, packages and promotion option?
JF: definitely yes!
TA: Thank you, Jeffry.
Time tracking for consultants – do you really need this?
Your consulting firm should implement our free online time tracking for consultants solution only in case some of the further conditions are fulfilled:
- You or your Managers do a lot of operation work, i.e. they frequently support in low valuable working tasks and they do not know how efficiently to overcome this issue?
- Managers do not have time for strategic thinking, relationship building with new and current clients?
- Want to see what does each team member do at any moment, day or week, and to check its productivity and efficiency on projects and tasks
- Think that you do not have full insight in profitability or margin per each project and client, i.e. you cannot reasonably estimate the cost of engagement.
- Do not have insight in time consumption per client, people, overtime reasons, etc.
- Company performance requires better monitoring
- Timesheets should be organized automatically
P.S. according to the survey over 120 European consulting companies with more than 15 employees 34% of them use online timesheets or time tracking for consultants solutions, 41% still work manually in terms of time analytics of their consultants while the other 25% do not use any time evidence.
How you make sure that each hour in providing services to clients is invoiced?
Each consultant and other employee has online access to the time tracking platform. After auto logging, they just need to fill daily planning tasks per client or project. Optional field is “Details Field” where the Consultant may put a short description of selected activities.
The consultant has an option to primarily select that current working task is related to the internal (in house activities) which means the time tracker automatically uncheck billable box.
An example of easy data entry is given below:
All data enables automatic reports and advanced analytics.
Managers or Partners have access to the full timesheet module and can see all data for wished period: day, week, month, or another custom period per each employee, project, client or task. Comprehensive timesheet could be exported in excel for each client or employee that is suitable for invoicing or consultant work assessment.
How does each consultant track his working time, is that easy?
According to provost customer experience, daily time for filling data by consultant is in the range from 5 to 7 minutes. In order to avoid losing time while consultants fill repetitive tasks, we offer set up of customized template for all users, in the option “My Templates” in the main menu.
Additionally, each consultant is granted with his own dashboard and analytics. That may help him to analyses non-productive behavior and improve his performance.
P.S. According to the above mentioned survey, considering companies that use time tracking for consultants, employees are not satisfied with current solutions as they find them complex and time consuming. Based on that we put special attention to make simple tool.
What reports you can automatically get from Time tracking for consultants platform
Within „Analytics“ module you can use various reports for four basis sections:
Analytics of all clients for wanted period presents data on total hours spent for a certain client, how much of total hours is billable, what is labor utilization, how much are costs of engagement for the client, and what is the average cost per hour.
Costs of engagement for the client are calculated based on previously given costs of salaries and other indirect expenses and it is the basis of calculation of the client’s profitability.
Data on work utilization provides information on the percentage of total hours billed to clients and what is the amount of hours covered from internal resources and it is the basis for calculating the realistic price per hour. Data on spent hours and costs for each client provides the possibility to redefine contractual terms with a client in order to optimize profitability, as well as to decide on prices of new engagements.
Analytics of employees shows data on total hours employee spent, then the number of total hours which was billed, and how many hours stayed unbilled. Moreover, the reports show what the work utilization is, how much did each employee cost for a certain period, and what is the average cost per hour.
On the basis of these data, it is possible to minimize the unproductive behavior of employees. Also, you can efficiently perform evaluate employees, redefine work conditions, salaries and bonuses.
These data are the basis for decisions on work organization, stopping inefficient and unproductive activities, as well as for outsourcing of certain activities.
Analytics of projects or service lines provides data on total hours spent on certain project or service line, how much of total hours was invoiced, how much of total hours stayed not billed, what is the time utilization, how much did the project cost, and what is the average cost per hour.
With cost calculation, you can calculate project profitability, which could be essential for changes consideration in business and pricing policy.
Does time tracking for consultants enable critical KPIs for consulting business?
Our tracking for consultant solutions provides critical KPIs for consulting business. You can see some of them within Dashboard and some of them are countable, based on platform data. Let’s consider main KPIs
Revenue per hour is critical KPI in the consulting business. Therefore, in our free time tracking online platform you have time allocation per each client and project. Dividing your revenues with the total time you get the total hourly rate per client or project while dividing your revenues with billable hour you get net realistic billable hour per client or project.
Costs per project present total cost of each project of the service line. For each consultant, you put a cost hourly rate. Besides the basic cost hourly rate of consultant, you can also add some fixed cost per hour (e.g. rent, phone costs)
Margin hourly rate per each client and project show the difference between revenue per hour and cost per hour.
Some of the commercial indicators very important for consulting business are:
- Total number of clients
- Number of different services per client?
- Total hours spent on business development activities:
With our time tracking for consultant solutions, you easily monitor activities spent on commercial activities such as targeting, meetings with potential clients, networking, digital marketing activities, etc, and estimate the required ROI.
Employee productivity indicators
- Total hours (or billable hours) spent per consultant
- Time consumption per different working tasks for each consultant:
- Overtime as consequence of non-productive behavior of consultants
- A number of consultants engaged per project at any moment.
Does “Time Analytics” is suitable for your consulting firm?
In summary, our time tracking for consultants essentially put focus on the following:
- Strategically thinking – Key Performance indicators monitoring with excellent Dashboard
- Simplified implementation and easy for use, fill daily activities and time in a five minutes
- More automation in planning and monitoring of business activities – use timesheet planning and editing module
- More productivity, automatically performance for each individual
- Efficient remote work with monitoring all activities per employees
- Time utilization measurement
- Cost management with аutomatically calculation of cost per clients, project and activities
- More control, track billable hours per client and employees
- Improvement in organization design
In conclusion, if you want more control, more billable hours, more productivity and efficiency, try our time tracking for consultants. Check out our attractive pricing plans and use free version for five users.
In the end, we try to make a simple online tool, as part of the infrastructure for consulting business growth.
FREE 60-days trial – no credit card required