Revolutionizing Professional Services: The Rise of the Quantified Consultant
Using data-informed metrics to optimize consulting operations
In recent years, the “quantified self” concept has gained widespread popularity, as individuals use their smartphones and connected wearable devices to track and measure various aspects of their daily lives to improve their health and well-being.
Using data and metrics to optimize personal performance has proven highly effective, and applying this concept to the professional world is now possible. Specifically, in the professional services industry, the “quantified consultant” refers to using data and metrics to help organizations make knowledgeable choices about their operations, and aid employees and independent contractors in enhancing their productivity and advancing towards fulfilling their professional growth targets.
Professional service organizations (PSOs), such as consulting firms, rely on the performance of their employees and independent contractors to provide value to their clients. Therefore, measuring their performance is crucial for identifying areas for improvement, setting performance goals, and accurately tracking project success. This is where purpose-built technology solutions for PS organizations come into play.
These applications offer a range of features to help business leaders effectively measure the performance of their consultants. They allow organizations to track billable hours, allocate resources, monitor project progress, and measure cross-team collaboration. They also provide real-time data and insights into key performance metrics, such as project delivery times and resource utilization, allowing organizations to make informed decisions about their operations.
The 2023 edition of Service Performance Insight’s (SPI) annual Professional Services Maturity™ Benchmark report, which analyzes the performance of over 700 professional services businesses, highlights the correlation between the adoption of purpose-built technology solutions and higher performance. For organizations with over 50 employees, the difference between businesses using a solution in SPI’s PSA category and those that are not is significant. Adopters of PS-specific solutions, for example, enjoy a 5% improvement in average billable utilization and a 16% improvement in average project margins.
The benefits of implementing purpose-built technology extend across the entire organization, including project management. These applications allow organizations to monitor project progress and identify and overcome any potential roadblocks to ensure successful completion — all critical components of a consultant’s performance.
Accurately allocating resources is critical to completing projects on time and within budget. Purpose-built technology allows organizations to view real-time data on resource utilization to ensure efficient and effective resource allocation while also facilitating better collaboration across internal teams and with customers.
Billable utilization is another critical performance metric for consultants, as it directly impacts the organization’s financial success. Gaining the ability to track billable hours accurately ensures that employees and independent consultants are optimizing their billable time to avoid burnout and contribute to the organization’s success.
Finally, project delivery is the ultimate measure of a consultant’s performance. Purpose-built technologies allow organizations to monitor project delivery times, track individual projects’ success, and identify opportunities for employee growth.
It is important to note that the goal of implementing these technologies is not to create a “Big Brother” environment where employees feel constantly monitored and mistrusted. Instead, the objective is to help organizations make informed decisions about their operations while helping employees and contractors optimize their output and make progress toward achieving their career development goals.
The “quantified consultant” concept can provide businesses with meaningful performance and financial clarity in times of economic and business uncertainty. And “uncertainty” describes the state of the professional services industry today. The 2023 SPI Benchmark cited above reveals that while profitability increased from 2021 to 2022, professional services organizations continue struggling to come to grips with lingering impacts from the pandemic, changing work norms that create productivity risks, and an ongoing talent war. The result is a degradation of certain Key Performance Indicators, with average employee billable utilization and project margins below five-year averages, the number of projects delivered on time dipping by 5%, and project overruns increasing by 21%.
The “quantified consultant” concept can revolutionize how professional service organizations measure the performance of their employees and independent contractors. Organizations that utilize purpose-built applications to effectively measure key performance metrics and analyze data to evaluate individual consultant performance will optimize resource allocation, improve project visibility and ensure that projects are delivered on time and within budget. It is crucial, however, to implement these technologies in a way that prioritizes employee trust and empowerment rather than creating an environment of constant monitoring and mistrust.