UK IT consultancies are losing money because they fail to automate critical areas of business processes, according to a survey of 75 senior directors at consultancies across the UK.
The survey shows that lack of automation amongst key business processes means that accurate views of billing, staff resources, and profitability are absent from day-to-day management processes. The results show IT consultancies need a dose of their own management medicine.
The ëProfit vs Processí survey, commissioned in early 2005 by PSA software specialist Maconomy, reveals that, despite providing efficiency and profit-enhancing projects to customers, IT consultancies are failing to improve profitability through their own internal practices.
Top line findings include:
ïEfficiency Icebergs ñ Despite 63% of IT consultancies recognising the role that operational efficiencies have in improving profitability, only 12% of IT consultancies have integrated management processes in place.
ïTime for Technology ñ Though 92% of IT consultancies believe that technology has a key role to play in delivering better project management, more than 65% of those surveyed do not use automated processes to support project management.
ïProcess Means Profit ñ 61% of IT consultancies agree that existing processes present a challenge in accurately pricing consultancy projects and 53% see reducing invoicing times as a means of improving cash flow.
ìConsultancy Britain is leaking profits,î said Steve Hoddinott, UK Country Manager, Maconomy. ìIn an industry with only intellectual capital to sell, that lives and breathes hour-based billing, issues such as staff utilisation, skills management, and capturing team hours should be operational priorities.î
The survey also reveals that the majority of IT consultancies claim ëclients moving the goalpostsí creates the biggest impact on project profitability. But with less than a quarter of consultancies using integrated management processes, consultancies should be asking if it is a case of unruly clients moving the goalposts or their own inability to move with them that creates profit loss pressures.
ìReal time changes demand real time information, and this component is lacking in the majority of UK IT consultancies,î said Hodinott. ìAn experienced consultancy will factor contingency plans into a project equation, but without the right management information at hand and without a clear picture of team skills, resource, and status, this becomes a dangerous guess at best!î
Efficiency Icebergs Cause IT Consultancies To Leak Profits
Research into ëConsultancy Britainí highlights missed savings and inefficient management
