Five key considerations for consulting firms pursuing higher revenue and sustainable growth - and how Runn supports those strategic objectives.
To be efficient, profitable, and sustainable, consulting businesses need to strike the perfect balance between the cost and ROI of their human resources. Resources that aren’t earning are burning through your profit margin. But put resources under too much pressure and you risk burnout, reduced productivity, and costly staff turnover.
With finite working hours and energy available, you need to optimize your use of resources to deliver the highest return without undermining people’s professional acuity. It’s a challenge that many consulting firms are still grappling with - especially when juggling multiple clients and projects simultaneously - but something that can be resolved through the strategic use of resource management software.
Runn resource management platform has powerful but intuitive tools for improving how you monitor and manage both your resources and finances. These empower you to maximize billable hours whilst minimizing the risk of overutilizing your consultants. You’ll also find reporting tools that deliver actionable real-time insights across your entire consulting business, so you can confidently make quicker, better decisions.
Resource allocation is about distributing time and talent, so your resources deliver the best ROI for your business. It’s the old chestnut of putting the right people in the right place at the right time. Do it well and you’ll perfectly balance your resource overheads to the value they add to a project - so you can make a strong profit and meet exacting client demands. Win-win.
But allocate the wrong resources to the project and you’ll suffer higher costs and lower client satisfaction. [Learn more about how to allocate resources to projects]
Common issues in resource allocation include
In the shifting sands of client projects, resource allocation needs real-time attention. Scope change or slippage in a single project can have negative consequences for all projects that are contingent on it getting completed on time. Resources that were available for Project B are now stuck on Project A. Project B requests consultants from Project C… and so on.
Runn makes it easy to allocate the right resources to the right projects. And to reallocate them in the best way possible when projects inevitably evolve. After you’ve set up a project, you can set phases and milestones, and then begin to build your delivery dream team.
You can search for resources by role, skill, seniority, and more, and start assigning them to tasks. Being able to see a centralized pool of resources increases your chance of finding best-fit resources - the people who are going to add the most value without undermining profitability.
You can see in the screenshot below that you can also spot potential problems fast. For example, your project managers are well over capacity and assigned to almost 290 hours of work when they only have 80 hours to use. From here, it’s easy to drag and drop resources and tasks to design a project that’s realistic, achievable, and profitable for your consulting firm.
Learn more about resource scheduling and allocation in Runn.
Resource utilization is a key metric for consulting firms. It’s the amount of time your consultants spend at work and working on projects. You can calculate utilization as an overall utilization rate (time spent on any activity at work) or calculate your billable utilization rate (time spent on activities that generate revenue.
The optimum overall utilization rate is 80%. This leaves capacity for employees to absorb the myriad distractions and ad hoc tasks that crop up during the working day. Within that overall utilization rate, 80% of that should be filled with billable work, leaving the other 20% for indirect value-adding activities like training.
Measuring and monitoring overall utilization helps correct anomalies - protecting consultants from extreme peaks in workload and keeping them working at an optimum level. Whilst billable utilization provides a benchmark for optimizing the ROI you derive from your resources, by ensuring the balance of work favors activities that make money.
Monitoring utilization also provides invaluable insights into which roles are most sought-after in your consultancy, so you can recruit and develop talent according to demand (see Capacity planning below).
Obviously, manually performing these calculations for each consultant on your team isn’t going to deliver insights particularly quickly and that hampers your ability to improve utilization rates. This is where it helps to use a platform like Runn to do the legwork.
Within your People Planner, toggle on % Utilization and Group Utilization. You’ll see something like the screenshot below.
The navy and red bars indicate periods where your consultants are overutilized (over capacity). George is at 150% utilization for the month shown and Celine has some clashes that see her at 200% for a few weeks that month.
You can see this reflected in the group utilization chart at the top of the screen in pale blue and pink. Notice how the red peak (more like a table-top) in group utilization coincides with individual utilization issues below. Between George and Celine’s overutilization - plus Kenny’s time off - means there’s a definite issue to address. We’ll cover this in Workload management below.
You can also see a bird’s eye view of group utilization, letting you assess your current situation at a glance. Below you’ll see you have a good balance of non-billable to billable utilization. That means you’re maximizing your revenue creation. But total utilization is at 115%, much higher than the optimum for productivity, mental acuity, and business agility.
Consultants face unusually high workloads compared to other sectors. Research has found 100% of consultants in strategy consulting firms work overtime - averaging 20 hours per week. In medium to large management consultancy firms, and in tech consultancies, over three-quarters of consultants work beyond their contracted hours to meet the demands of their role.
This has a significant and undesirable impact on consultants’ work-life balance, job satisfaction, and professional acuity - as well as staff turnover - so it is something all consulting firms need to proactively manage.
It is partly the project-based nature of consultancy work that causes these peaks in workload. Short-term projects require intense sprints of activity to meet demanding deadlines. Whilst longer projects can be subject to scope creep and slippage. Juggling multiple clients and projects simultaneously also piles on the pressure - especially when project parameters change and result in conflicting priorities.
There are several ways managers can relieve some of these challenges using resource management software like Runn.
Monitoring workload, utilization, and capacity in real-time - Projects are dynamic and what was manageable yesterday may have become a major red flag today. At-a-glance capacity reports easily reveal where capacity is becoming a problem, allowing you to proactively manage the situation.
Resolving emerging capacity issues - Managing workload might look like reallocating tasks from an over-capacity consultant to someone with more available capacity. Or, if no one else is available, could involve resource optimization techniques - such as leveling and smoothing - to make that individual’s workload more manageable.
Within your People Planner module, you can see both a granular and bird’s eye view of workload - expressed as capacity, availability, and utilization - at both group and individual levels. You can easily see periods where your organization, specific teams, or job roles are overcapacity.
You can then dive into individual workloads to resolve capacity issues. Remember Celine, George, and Kenny from the utilization section? You can see that Celine is overcapacity but Kenny has room to take on more work. It takes just three clicks to reallocate that task so that Celine is now working at a manageable level and Kenny is delivering more billable hours for the business.
Capacity planning is a strategic process that involves matching resources to demand. It is about knowing how many resources you’ll need to deliver your future work plans. This might result in the recruitment of more of one particular type of resource whilst scaling back on others. Or might mean adjusting the type - or timing - of projects you take on.
The goal of capacity planning is to offset two common - and costly - problems
Actively monitoring and managing your capacity lets you maintain an optimum environment to deliver excellent client outcomes. Resources are available, deadlines are realistic, workload is manageable, and your consultants have the time and space to deliver their best work.
Runn has a range of tools to support capacity planning. We’ve already explored utilization charts in People Planner. These can help you spot trends in utilization that suggest certain consultants' skill sets are in high demand and you need to recruit more. Filter by job role or skill to test your hypothesis.
In the screenshot below, capacity has been filtered by a job role to understand the pattern of utilization and capacity in this skill set. You’ll see that the chart covers eight people and shows a trend of being 9 hours overcapacity each day. This suggests a recruitment need if you want to match your workforce to demand, and prevent burnout among your most in-demand employees.
You can also use reporting tools in Runn to support capacity planning. In the screenshot below, you’ll see a report on People Variance. This compares their scheduled hours to their actual hours (which can be tracked using our Chrome extension time tracker within the system).
You can quickly see if you’re utilizing resource availability effectively and profitably. You can also filter the report by team, skills, or other tags to assess different demographics within your business.
You can also use the People Utilization report to see a color-coded heatmap of utilization.
Learn more about capacity management in Runn.
Obviously, profit is one of the main objectives of consultancy - along with the satisfaction of delivering exceptional work and advancing knowledge in your specialist sector - but it can be one of the hardest things to predict and achieve. A matrix of contingent factors can undermine profit margins - from poor forecasting and project planning to overspending on resources due to allocation issues.
It’s important for consulting firms to record key metrics such as projected-vs-actual spend on projects as this data can be used to create more accurate forecasts for future projects, leading to more accurate quotes for clients.
It’s also key to monitor project budgets in real time so that you can take corrective action if the project starts to deviate from your expected expenditure.
The Project Planner module in Runn provides forecasts and real-time monitoring of your projects in both time (hours) and financials (revenue and costs). Project insights include
You can also track organizational financial trends using the Runn reporting center. For example, the monthly Project Period report below shows key metrics across all projects, so you can check you’re on track to achieve your financial objectives.
Learn more about reporting in Runn.
Performance and growth-focused consulting firms can’t afford to overlook the significance of effective resource management.
In a sector where profit is created by converting human ingenuity into high-value advice and strategies, your resources are your biggest asset. But they’re also your biggest cost. Using them in a way that is both operationally and cost-efficient unlocks capacity, protects profit margins, supports strong client outcomes, and surfaces opportunities for future growth.
However, this isn’t possible without the right tools to allocate, optimize, monitor and proactively manage resources in real-time.
Manual planning, tracking and reporting slow down decision-making. They reduce your ability to identify emerging cliff edges in capacity and budget - and hamper your agility to avert issues before they become big problems.
Investing in a resource management platform like Runn is a small price to pay for the productivity and profit gains it delivers. Start your free 14-day trial today to explore the system for yourself. Use our sample data or import your own.
