As a consulting firm grows, it’s not enough to manage successful projects. To minimize bench time and grow profitably, firms need to dovetail successful projects together and keep an eye on projected costs/revenues so they can stay ahead of the staffing curve.
You can think of resource allocation as “budgeting 201.” So if your firm isn’t already tracking budgets and assignments, then resource allocation is probably beyond your requirements. But, if you’re on top of project budgets and already tracking teams and assignments, then resource allocation might be just what your firm needs to reach the next level of management proficiency.
As firms get bigger, project budgets and staffing requirements bump into each other. Even firms that staff 100% of a consultant’s time to a single project need to manage transitions from project to project (start times, kickoff schedules, the long “tail” that comes with larger projects, etc).
Those interactions between competing projects can lead to big profit drains, and it’s those interactions that resource allocation is meant to smooth out. With the right tool, your team can:
- Convert sales pipelines into predictable revenue,
- Gain visibility into how booked engagements will convert to revenue over time, and
- Smooth out the impact of competing projects on the firm’s revenues and gross margin.
Resource allocation lets your management team allocate staff to a given project—the time commitment can be spread out over a well-defined time period (weekly or monthly). Ultimately, this tool provides a “meta-project” lens for your team to line up staff capacity with projected hourly commitments into the future.
With resource allocation, you can:
- Allocate staffer’s time to a project,
- Plan for future work,
- Determine optimal start/stop times for consulting assignments,
- Organize project plans so that they are optimal for both customers and the firm,
- Stay within budget, and
- Minimize bench time.
Because resource allocation allows you to spread the resources committed to a project’s budget out over time, your firm gets revenue allocation and pipeline management from it as well. If, for example, you know that a $100,000 project will be delivered over the course of four months, then you’ll be able to translate that larger contract into predictable revenue over time.
The longer you work with the tool, the better your team will get at creating a reliable revenue pipeline. And by adding prospective jobs and late-pipeline sales opportunities to the resource allocation pipeline, you’ll be able to see how future “potential” revenue will layer on top of your existing staffing commitments—eliminating the “hurry up and wait” dilemma so many teams face when the sales team is successful.
While your project/engagement management team will benefit from this tool, the firm’s leadership will gain visibility into future revenues as well. You’ll be able to stay on top of staffing needs, predict and plan for downtime more efficiently and schedule new engagements more collaboratively.
Growing revenue in a consulting firm is about more than “selling more” engagements. Firms that can’t grow “smart” end up squandering the potential profits that new sales should be driving.
For firms that have reached critical mass, resource allocation provides a lens into your revenue stream that is required in order to maximize profitability. It’ll help your team stay organized and informed, putting detailed information at their fingertips so they can make informed decisions.
Other people benefit from resource allocation, too. Staffers are engaged because project managers can easily see who’s over and under capacity, and they can adjust hours accordingly. And clients stay informed. Project managers can assess the status of a project and share project statuses and/or advise clients if a project budget needs to be adjusted.
Ultimately, knowing where and how resources are being used can help your firm save time and money.
To learn more about resource allocation and its capabilities, check out our Knowledge Base articles on the topic:
We also periodically offer webinars, during which a BigTime expert explains:
- What resource allocation is and why it’s needed,
- How to allocate hours to employees and projects, and
- How to forecast staff availability.
To find out more, please email us at [email protected].
Resource allocation is available to Premier users. If you currently have a Premier account, then refer to this article for step-by-step instruction to access it in BigTime. Existing Pro users can get a free 14-day trial. You can also attend a free webinar and watch a BigTime expert navigate through the resource allocation tool.
To find out more about resource allocation, contact your sales representative or email us at [email protected].