5 Stats That Show Why Resource Forecasting Is One of Professional Services’ Biggest Challenges
Being able to accurately predict and respond to resource demands is one of the biggest keys to success as a professional services organization. But for many, creating and utilizing trustworthy resource forecasts is one of the most difficult challenges they face.
If your organization is in the midst of a struggle to effectively forecast, know that you’re not alone. In recent Kantata research, conducted by Forrester Consulting, resource forecasting was the top business challenge identified by professional services decision-makers, with 59% of respondents saying they found it very challenging to predict resource needs in advance.
Understanding how challenging companies around the world find resource forecasting to be, Kantata has sponsored new research from the Resource Management Institute looking specifically at forecasting practices. “RMI Survey Series: Forecasting” identifies the struggles and root causes experienced by professional services organizations surrounding forecasting today. A total of 41 different companies around the world were surveyed and professional/consulting services and enterprise/IT services made up 85% of the respondents.
What challenges have been found in RMI’s in-depth research? The following five statistics are just a glimpse into what companies like yours are dealing with on the forecasting front.
Today’s Biggest Resource Forecasting Issues
RMI’s research found that forecasting, while seen as strategically important across professional services organizations, still has a long way to go before best practices are commonly adopted, with resource forecasts delivering on their full potential.
1. 95% of organizations recognize the importance of forecasting to support resource needs, but only 47% say they have a formalized and documented process, and 97% believe their current capabilities are adequate at best, with room for improvement. There is clear recognition of the need for effective forecasting, but consistent shortcomings are keeping organizations from being able to rely on accurate forecasts to consistently and reliably drive staffing decisions..
2. 50% of organizations can’t accurately forecast out more than two months in advance, which is less than the amount of time RMI says that it takes to hire or retrain a team member. In addition, at least 78% of organizations aren’t up to the RMI’s best practice level being able to accurately forecast resource needs at least 6 months out. This inability to trust resource forecasts beyond the immediate horizon leaves organizations unable to respond to resource demands at the right speed.
3. RMI’s research illustrates that skills forecasting is a particular problem area, with only 31% of organizations saying they can forecast resource needs at the skill level. This means that the majority of today’s businesses can’t fully understand the specific skills that they need on their team to deliver on client demand, or when those will be needed.
4. Nearly two thirds of organizations (65%) say they do not have a formalized “organizational interlock” process in place. According to RMI, “Interlock meetings are an essential part of the forecasting process, and should be happening at a regular cadence to help ensure the integrity of forecast inputs.” Reliability of forecast inputs is a consistent issue, with 85% of organizations admitting that there is some improvement needed when it comes to sources of demand input for resource forecasts.
5. 71% of organizations say they are using spreadsheets to support their forecasting needs., a risk factor to forecasting success. According to the report, “The RMI has found that the right combination of process and technology (PSA/PPM) can minimize or eliminate the need for supporting spreadsheets representing an opportunity for digital transformation.”
Even with a ways to go, a reliable and accurate forecasting tool is essential for today’s businesses to move past outdated spreadsheets, making guesses about future demand, and making resource adjustments based on instinct. Take Logicalis as an example: this global IT solutions provider was attempting to forecast resource needs across a set of spreadsheets prior to adopting the Kantata Professional Services Cloud.
Resourcing Director Mike Downes recalls that before adopting a purpose-built resource management solution, “It would have taken me a month to do my demand forecast, so we just didn’t do it, it was based on gut feel.” With the Kantata Cloud in place, Logicalis is now able to forecast at an RMI best practice level. “We now have a complete and accurate view of all engagements happening over the next six months,” says Mike. “That means instead of relying on a combination of gut feel and spreadsheets, I can confidently put together the best teams for each engagement and press the button on the recruitment process much sooner.”
With the right forecasting solution and the adoption of best practices for how to use and respond to resource forecasts, professional services organizations can make critical adjustments to their workforce that ensure teams are well-utilized, informed, and prepared for any change on the horizon.
Understand and Conquer Your Resource Management Challenges With RMI Insights
Learn more in the Kantata-sponsored research report “RMI Survey Series: Forecasting” and uncover the data-driven insights that will help you overcome your resource management challenges.