Episode 33 Transcript

Understand and Improve Your Resource Forecasting Performance w/ Marc Lacroix

    Banoo Behboodi: Welcome to the Professional Services Pursuit, a podcast featuring expert advice and insights on the professional services industry. I'm Banoo, and today I'm joined by Marc Lacroix. Marc is a partner at RTM Consulting and is on the board at the RMI. Marc is both a practitioner and a researcher and helps consulting in professional services organizations optimize their operations through effective resource management, jus- in-time resourcing and utilization of management dashboards. Marc, very welcome to the show.

    Marc Lacroix: Thanks for having me. I'm glad to be here.

    Banoo Behboodi: Yeah, very excited about our conversation. We've had Randy Mysliviec from RMI on the podcast a few times now to talk about the top trends in resource utilization and most recently resource management automation. So our audience is very familiar with the great research that you are doing at the RMI, but let's dive in into the latest survey. What made you decide to release a survey solely on forecasting? Since I believe this is the first of its kind.

    Marc Lacroix: Yes, and it's a big functional area for RMOs and resource managers out there as we've learned, and you're gonna highlight too from the survey. It continues to be one of the largest inhibitors to really achieving a successful and strategic resource management office and function.

    Banoo Behboodi: Makes sense. And I know that according to the forecasting survey, 50% of organizations can forecast out more than two months. At least 78% of the organizations aren't up to the RMI best practice level of six months. What do you think are some of the biggest issues holding companies back from doing a better job forecasting?

    Marc Lacroix: Yeah, I think this is something we tried to explore with this research, but I also have for several years now, worked with a lot of clients trying to solve this problem. And I will make everybody feel good out front to say this is probably one of the hardest problems to solve in terms of getting good resource management processes in place. I think it boils down to data quality and quality of data being the biggest inhibitor. Now that can result from systems, people, process, but in some of my recent experiences in working with customers, I kind of had a revelation or went a bit lower. In this client situation, data quality was a problem. In this case, it was the backlog of sold work. And so as delivery teams, that's the data we can control. So we can't blame anybody else for the quality of the data that we have within our own purview, it's our backlog, it's our project plans.

    Well, the backlog data for this particular client was not good, it was highly problematic. So what we did was we went a cut deeper and did root cause analysis because at the top level what people were telling me is oh, our PMs just aren't doing their job. They're just not keeping the schedules up to date. And those leads need to be doing better at putting the data in the system. Okay, sounds good on the surface and I hear that a lot that if somebody would just do their job better or do it to better adoption. Well when we really got down underneath it, there were really some interesting root causes, Banoo, that we discovered. One is, what is the workload of the PM to begin with? You have an unrealistic expectation. We're seeing now more and more PM's getting assigned 10, 15, 20 projects at a time. And if you think of how challenging it is to try to maintain project information in a complex system, that's a little bit of overload. The other thing we found too is sometimes organizations are getting a little too complex in the way they're creating their plans and so it creates a lot of complexity to actually maintain. And then I guess last, we also discovered that people say the business is pretty fluid, things do change a lot. And so these are all things that contributed to a backlog that was challenging to maintain and this customer was faced with all three of them. So the net result was poor data quality. But if you really go back and look at what some of the root causes are that are prohibiting or inhibiting that data from being good, you have to address that. For instance, reduce the workload or offload some of that work from your PMs so that those schedules can be timely and maintained and some other ways to solve those underlying causes.

    Banoo Behboodi: So that's very interesting, the fact that most definitely, whenever we talk about resource forecasting, everyone's talking about maintaining resourcing, et cetera, but there's so much that actually feeds up to that. And your team and you guys basically dive in and ensure that you're getting to the root cause. A lot of times from what you're explaining is data quality when it comes to forecasting. That's great. And then we've discussed skills forecasting as a very important component. We know it's a particular problem area with only 31% of organizations saying they have this capability. We know that client demands are changing faster than ever and we're required to be responsive to the needs of our clients. And being able to understand the skills needed to service the clients and being able to position those skills at the right time for the right project is critical to ensuring both client and our colleague’s satisfaction. So why do you think it's so challenging for a lot of companies to be able to properly forecast skills and obviously that inhibits their ability to make sure that every single time they're positioning the right skillset for the right activity?

    Marc Lacroix: Well, I've definitely seen over the say three to four years, more attention has gone into skills databases and design and implementation than ever before. In fact, I've helped clients with exclusive skills inventory projects only because it's that big and that important. So they're not simple to simply deploy, but once they do, they're pretty straightforward and intuitive in terms of their value. Now why is this continuing to be a challenge? The first thing is that I think that the step that folks are taking now is to get the skills database in place and try to at least understand what we have and what are the dimensions of what we have. But now how are you using that in a use case? We like to think we want to use it to make smart staffing decisions, but you bring up forecasting and looking out into the future. And if you have a good skills database, then you could do what I'll call more ad hoc forecasting to say what-if analysis and scenarios to say hey, if I was to sell five more of these projects, do I have enough of the right skills to do it? That would be an example of ad hoc. The real goal is to tie it to more of the sales process as well so you can get that future forecast look in to say, if this opportunity or these sets of opportunities are in our pipeline, what will that mean in terms of my skills and ability to staff them in the future?

    So that's a more complex thing and what people have to realize is that skills and capabilities are a many-to-many and a one-to-many. I have many skills so that's one-to-many. And Banoo, we might share some of the same skills, right, and an overlap. And so in that case, it's hard to say how many people do I have with this one skill to do this job? Sometimes we have to actually abstract some skills into some major disciplines and things like that to really filter out for capacity planning purposes. But nonetheless, we need that good skills data in there so we can do some of the ad hoc planning. The other thing is to be successful sometimes in translating what's being sold, typically, we're not defining a bunch of skills and data in the sales and CRM platform, right? We don't expect salespeople to do that. So you have to look at your overall process and say who are the, what I call the data intermediaries? Who is translating that new implementation project or that new project into what really are the resource requirements? And people avoid that translation and sometimes they wait until the project's sold and ready to start being staffed when they could have started doing that a lot earlier in the process. And so one of the things I think to address this again, is yes, build your skills database, but again, use data intermediaries or technology to really develop what are those skills needed upfront while it's still in the sales cycle. So you can effectively forecast and plan ahead for being able to meet the needs of what's in the pipeline.

    Banoo Behboodi: Because I think that leads to the ATS and identifying any skill gaps you have. And if you do it early enough, it actually positions to you to be able to recruit potentially appropriately for the project and be ready to start as soon as you need to for the project. Whereas now, tell the client it's gonna be another couple of months because I've got some gaps in providing the right skill to the project, so it seems critical. Now going back to the skills, I know you talked about the work that you do on the skills database. What are some of the typical opportunities that you see when people are setting up things that people don't get right, that you advise them to direct? I heard you just say about categorization, right? I mean it's not a flat list of skills, but how you categorize that allows you to understand and forecast better and understand your gaps better and all of that. Can you just share with the audience what do you think are some of the dos and don'ts in maintaining an effective skills database?

    Marc Lacroix: Yeah, and I like the dos and don'ts, so I can think of a couple dos and a couple don'ts. So a do would be, it does require a broad collaboration with the delivery leaders who know the business. So I'll call them a practice leader or delivery manager or people that represent some of the different tools, technologies or delivery areas that you're in. They all need to be engaged to contribute to what goes in there. And the other do or do not, I guess it could be that simplicity is better certainly and start smaller and grow. I think people overcook their skills taxonomies a bit and try to get down to the version level of the product technology, and it's like you have to come back up and apply use cases to say how am I gonna use this data and how much is enough to make an informed decision or to contribute to my analysis that I'm doing? So there is a size and it's kind of correlated not to how many people you have. It's correlated to how broad of an offering, how many different services and technologies you work with.

    I helped a customer that was very acquisitive, had 50 different software technologies that made her a little bit bigger sales data. But if you're a single product implementer, you should have a skills database that's under 200 quite simply because there's not enough. And again, keep in mind, don't let HR creep in here, this is a skills-to-do-work database. This isn't about career development, this isn't about behavioral type things. This is about do you have the skills to do the role that we're gonna assign you to do? And so that's another way to kind of bound your skills database to keep that as its scope. And again, as I mentioned, if there are disciplines or major practice areas, you may have to tease those out into a binary of I either know the supply chain or I don't kind of thing. And so if you want to go in capacity plan based on a broad skillset, then I know how many supply chain people that I have and can better segment them to do my forecasting and planning.

    Banoo Behboodi: So Marc, can you also walk us through, because again I think this skills area is a very important one and one of interest. What are some of the best practices? So we talked about the database and some of the dos and don’ts with respect to the database, but what about the actual process itself for making sure that it's maintained? Because I know I've walked into projects and I'm sure you have where there was all the intention to have all the skills database going and there was a database set up, but very quickly it fell out of date. So it wasn't useful and people stopped using it because they will stop using it if it's not relevant and it's not accurate. So what are some of the best practices in maintaining your skills database?

    Marc Lacroix: Yeah, you're right, you make all that effort and investment and then you let it go stale and that's one of the most common things we see. First I'd say the anchor, the governance of that and responsibility in the resource management office, if you have one, I think that they are the ones that can best govern it. And I'll say the word police but I don't want to use that connotation, but really facilitate the process of keeping the data up to date and healthy. So from a staff side, certainly a leading practice we propose is no more than annually, twice annually, typically coinciding with a performance management process, but of course ad hoc as well. If you finish a training or a project or something like that, they'd be encouraged to go in there. Again, I go back to even the early days of doing big five consulting, we were capturing skills and impressing upon the staff that hey, this is your brand, this is who you are and this is how you're gonna grow. That skill profile for us was a definition of who we are and who we want to be. That's a little extra thing to try to get some adoption out of them.

    And then we can't forget too that we have to keep the taxonomy itself healthy as well. And that probably is at least once a year, maybe a little more frequently getting some of the experts back together to say they're serving their purpose. Sometimes you can run a report and say how many people have rated themselves. I helped a customer that had like 2000 skills, we ran a report 500 hadn't been rated by anybody. So you just take those off, add others and keeping that healthy also makes it relevant to both the business as well as the individuals that are using it. So those are some kind of common leading practices for good maintenance, but definitely needs that ownership in your resource management office. If you don't have one, probably needs to be anchored in your project management office or some operational home.

    Banoo Behboodi: All great points. Again, just to recap, you stressed the importance of starting early enough in the sales cycle because that gives you a much bigger and more complete view into the skills that are required and a much more timely view into what's required. Sort of that accuracy of backlog and making sure that your backlog is accurate, but also all of this is gonna be critical to be able to get an effective forecast. So what are some of the macro trends that you're seeing in resource management generally outside of the survey?

    Marc Lacroix: I actually think, and again I've been looking at this area for a while, I think resource management's getting a little harder. That's one trend I'm seeing. And the reason I say that is because projects and delivery are getting harder. If you notice as we've moved a lot of solutions to the Cloud, a lot of our work is against technology that's in the Cloud. Well what does that mean? Well it means that, I call it the flattening of projects because no longer do we have an army of people that go on site to put a premise-based solution in place and implement, or we're getting more into relationships with clients that are, I’ll call it flatter. So maybe we again, stretch out a project and we thin slice people. Well from a resource management standpoint, that can be very challenging. Or we're selling more buckets of hours, we're selling more credits, we're selling more retainers. Those are very difficult to do resource management against. And don't blame the resource managers, it's a challenging type of delivery for a delivery organization period. So you're not gonna be as efficient, but it puts a lot of pressure on resource management to make sense of that.

    When you look at credits and retainers and things like that, I feel like those are on the rise. That's anecdotal on my part, but what does that do? What is credits? Well credits are sold works, everybody's happy, sales is happy. But we like to joke is this is something you have to resell over and over again because you have to actually schedule that work, that works unscheduled. And so it really becomes an elephant in the room as, yeah, we sold all this, we may not have to recognize the revenue yet, but we have all this backlog that is unscheduled and we have no idea. And lo and behold, all the customers might wait till November/ December to say hey, I'm ready to spend my money now or spend my credits. So that's an example to me of a trend I feel is increasing, which again makes it more difficult for delivery teams, makes it even more difficult for resource management to handle. And so I think that some of the remedies or some of the things to deal with that is you have to really look at what am I selling? What's the structure of the services I'm selling and how hard or easy is that to actually deliver on? And so the root cause might not be hey, resource manager just needs to get smarter and more creative on how to do this. Yeah, but it's gonna create more overhead to be able to manage some of these different models.

    So what I've encouraged people to do is look beyond resource management and say, do you really wanna sell it this way? Do you know the implications of selling it this way? And should you rethink the way you package and structure your services to again, find a nice balance between being highly flexible to your client versus also not lose points of margin on your operation because it's so heavy to try to manage. And we highlighted this in the survey a little bit as I still think accountability's still a little bit of an issue in terms of we talked about data quality early on and upfront. And I think that we got different roles, we have different organizations and different people have responsibility over some of that data and the accountability to that data. And I think that continues to also be something that is partly inhibiting forecasting but also something that, in terms of a broad trend, still I don't think has adequately been solved.

    Banoo Behboodi: So by accountability you mean clearly understanding within the life cycle of a project delivery roles and responsibilities. And if you don't have an RMO organization and not everyone does, clearly define whose responsibility that is.

    Marc Lacroix: Yes, to know the cause and effect of keeping data maintained, keeping things up to date, and knowing how we keep this data fresh and accurate and at the right points in time.

    Banoo Behboodi: We talked about buckets of hours and the challenge that poses. And so outside of these types of retainer, bucket of hours, credits, whatever we want to call it. Outside of not selling those because I think where you're seeing more of those happening is because clients are asking for it and we're just generally industries trying to be more responsive and flexible with delivering on clients’ needs. But I would like to think that there is other ways that we can package up and still fulfill the client, what the client is going after, which is that flexibility that comes to them with that bucket of hours. And if we must sell it, are there things that we should think about to reduce the chaos that basically a bucket-of-hours type engagement results in?

    Marc Lacroix: Yeah, and again, I think this is where we talk about the impacts on resource management, but the real opportunity here is to move less from custom services to more packaged and templated services. I think that's one remedy that pays dividends all across the organization. It's easier to sell so your sales costs are lower, it's easy to translate into delivery so we know what some of the resource requirements are against it. We generally know what impact it'll have on our backlog. So if you look at your organization and you see what your services are being sold, ask yourself how much of that is custom? Is every project being custom scoped or custom designed or do you have good templates and good packaging to say that generally 80-20, 80% of what we sell falls into one of these templates? And it's actually giving your customers some satisfaction actually because templatization and packaging shows you've done this a hundred times before and when you go forth and say we have a proven playbook process to do this and here it is Mr. Customer, that actually gives them confidence. So this idea, it's a good offset to the flexibility to say we've done this, we know it'll lead to a good result, we have a playbook, this is a package, sign up, let's go. And you can see how that will work its way through the operation, you know, the PMO will know what to do, the RMO knows what to do and everybody rallies around this templated model. So that's again, one key way to counter some of that more customized delivery approach.

    Banoo Behboodi: I love it because I agree with you, it's going to have positive impacts going with standard packages and templatization all the way through the organization as well as resource satisfaction. Because even the teams are going to much better understand what their role is, how it fits in within the overall delivery and where they need to continue to develop. It's not a guest game because every time there's a random SOW or a custom SOW where what they have to deliver is different, but it's very much a known entity. And as you said, from a client perspective, they can have much more confidence in our ability to deliver because we deliver that package repeatedly. So I love that, that's a great way to look at it. So Marc, we started out looking at the survey, it was a once in a time survey that you guys did, you had a hypothesis I'm assuming going into the survey and I'm just curious if that hypothesis proved accurate based on the results of the survey?

    Marc Lacroix: Yeah, and I'd love for this to be a success story but the hypothesis probably was that organizations are still struggling and I think the survey certainly highlighted that there's still a lot of room for improvement. There's still a lot of work to do. And then that reflects too in our day-to-day work working with customers as well, that some of these areas like forecasting, they're hard. They really require a lot of people process technology.

    I think that we are seeing a little bit of a shift in terms of the accountability. I think it's still a bit of an issue that people don't understand that in order to achieve good resource forecasting, it requires a lot of other people that help either with good data or good process to get there. It is pretty far reaching and so it's not just the domain of a resource management office or a specific operational team. It takes collaboration across different organizations. And so that to me is still a gap that we see and that I think the survey still highlighted. There's not enough interlocks happening, that's kind of one of our terms for getting different stakeholders together to ensure the data's right. You know, only 2% say their data is actually reliable. Now bearing degrees of less reliable but only 2% in the whole survey said we have good reliable data. So that's another clue to say there's a lot of work to be done. So yeah, I wish it was a success story and we could put a fork in it, but hopefully the survey highlighted where some of the challenges and pain points are to help guide people to maybe break the problem down a little better and go a little deeper in some areas to solve.

    Banoo Behboodi: Yeah, and another way of thinking about it is it's good to know there's opportunity because then all you can do is improve from there. So that's great, appreciate it. To wrap things up Marc, I always like to take it a level deeper into personal side and our audience get to know you a little bit better. So just maybe asking about your favorite reading, what you're reading now, any any recommendations for listeners?

    Marc Lacroix: So if it's a revelation of a little more about me, I like civil war history. I like history a lot. So when I read, I tend to not immerse myself in a lot of business books, I like to more escape into either history or something. So just last year I read Andersonville by MacKinlay Kantor, it's a kind of a bit of a thick read but that's a prison camp in the south and it's fictionalized history. The book kind of blew me away because I like the topic, I like just civil war history in general. I actually felt I was there. I mean he was so descriptive and so detailed. And then it also talked to me a lot about human beings and the human spirit. It kind of blew me away a little bit. I didn't expect that, I thought it was gonna be more of a historical non-fiction and it turned out to have a narrative that really made me feel like I was there and I was seeing and smelling what these men were going through. So I recommend it. I couldn't put it down but I'm a civil war buff too.

    Banoo Behboodi: No, that's amazing. Actually, my co-podcaster Brent he's totally into reading first of all, but also history, so I'm sure he'll especially appreciate that suggestion. Wanted to thank you Marc for taking the time and being on our podcast. It's been great having you. And just for purposes of future reference, if we have listeners that need more of your insights or want to connect with you, how would they do that and where would they find the survey so they can take a look?

    Marc Lacroix: The survey is successful at the Resource Management Institute, so that's resourcemanagementinstitute.com. And to access it, you really just have to register and that's free. So to be part of the RMI is free. You join a community that has information, events and things like that, so you'd be able to find it there. I welcome anybody to reach out to me. My email is mlacroix@belcan.com if you have any follow-up questions or want simply a shoulder to cry on or vent your frustration or validate an approach you wanna take, I'm happy to talk to you.

    Banoo Behboodi: Excellent, thanks Marc. Thank you for listening today, and as always, feel free to reach out to us at podcast@kantata.com with any follow-up questions. We would love to hear from you.