The ROI on Skill and Expertise Management: Part 1 Win More Work
Steven Forth is a co-founder of TeamFit. See his TeamFit skill map
Investing in skill and expertise management requires a commitment. Many companies are shy to make this commitment because they are not sure about what is involved. There is fear of the change required and questions about the return on investment. We will have more to say on the nature of the commitment and the change management required. Here the focus is on what drives the ROI on skill management for professional services firms.
Professional services firms rely on the skills and expertise of their people to deliver projects for clients
There are many professional services, from management consulting firms like A.T. Kearny, BCG, Bain and McKinsey, to design consultancies like IDEO or Frog, and engineering firms like Urban Solutions or AKKA Technologies. Lawyers and accountants are also professional services, and some even consider the provision of healthcare a kind of professional service. At the largest scale, the big four Accenture, Cap Gemini, Deloitte and EY have grown far beyond accounting and integrate virtually all types of knowledge-based work.
Skill and expertise management is mission critical for all of these companies as it is what allows them to win more work and deliver work efficiently once they have the contract. It is the most powerful tool they have to grow capabilities.
Before reading on, please take this little one question survey.How much would skill insights help grow your business?
In a recent conversation with the former manager for knowledge management at a global consulting firm, I was told that the partner consensus was that deeper insight into skills and knowledge across the firm would add 10% to revenues. As this firm has more than $1 billion in revenues that would be a lift of $100 million. Skill management is a compelling investment for this firm.
Skill and expertise management delivers its ROI in three ways:
Winning more work
In this post the focus is on how skill and expertise management helps companies win more work, we will look at utilization and engagement in future posts.
Skill management helps win more work
Ibbaka helps professional services firms win more work in two ways.
Demonstrate relevant capability - show that you have the experience needed - It is not enough to show a collection of projects on a website. One needs to go deeper and show the skills used to deliver those projects. Skill differentiation is critical. How does one firm bring a unique set of skills to a project to deliver an exceptional outcome for a client? Being able to answer questions about skills and differentiation is critical to the sales process. To close the deal, firms need to provide evidence for their claims.
Build the pursuit team - get the right people on the pursuit (sales) team - Large opportunities often require a team to win the sale. These teams are often referred to as pursuit teams. Putting together a pursuit team with the right combination of skills can be critical to winning the project. In most cases, time is of the essence. Ibbaka Talent is uniquely suited to building the right pursuit team and doing so quickly.
A the sales level, Ibbaka Talent drives ROI in three ways.
Winning more projects
Increasing the revenue per project
Decreasing the cost of sales by accelerating the sales cycle
A case study (with data redacted and simplified)
A small consulting firm doing relatively large projects gave us the above model (identifying data redacted and simplified). This gives an increase in revenues of 26%. The impact on gross profit is greater at 33%, because of the impact Ibbaka can have on sales efficiency and project economics.
Professional services firms that adopt skill and expertise management will have a competitive edge over their competitors in the sales process. This translates into a large business impact.
