top of page
Search

HOW TO REDUCE COSTS OF PROFESSIONAL SERVICES DELIVERY

Updated: Oct 3, 2023

All professional services businesses will have various cost requirements that ultimately deduct from their bottom line. As a company experiences growth, it often becomes harder to attempt cost reduction while improving organizational efficiency. Any business, however, can always limit or curb unnecessary costs and reduce wastage.


By enhancing processes and encouraging creative thinking, services delivery leaders can reduce costs significantly and relieve pressures surrounding cash flow. This exercise sounds daunting, but it doesn’t necessarily have to be a painful process, but it will require smart thinking. Let’s look at how to reduce costs for your professional services organization.


STRATEGY 1. ASSESS AND MANAGE YOUR EXPENSES


It’s a given that there are a multitude of professional services organizations out there that are spending money on things they don’t actually need. Naturally over time, businesses grow and evolve, which in turn means cost reduction also has to evolve to keep up with the accelerating pace of the business. The moment a business begins growing, owners should be looking into low-cost spending strategies with the goal of increasing the bottom line.

It’s extremely important to keep close to project spending over time, and there are three key items to keep in mind:

  • Any customer requests that go beyond the initial project scope need to be documented and billed for, no matter the length of the additional time.

  • Real-time metric tracking is crucial if you want to ensure projects are kept in line with the statement of work (SoW) and there’s no risk of exceeding the budgeted costs.

  • Standardized processes need to be created to help your teams save time, and there needs to be clear direction on what needs to be done and how they can achieve it.

If there are any unused products or outdated services you’ve identified in your organization, you should eliminate them immediately so you can redirect these spare resources to serve other purposes throughout the business. Some key areas to focus on are training staff, optimizing workflows, and growing your services. If you have higher cash flow, allocating it for business growth can help to maximize organizational efficiency.


There is one caveat to this, and that’s that it can be misleading if overdone. Unneeded expenses are all extremely worthwhile to eliminate, but a significant number of growing businesses become transfixed on this method of cost reduction. They are often heavily constricted and spend miniscule amounts from expense budgets rather than looking into other reliable methods of cost reduction.


STRATEGY 2. INVEST IN TECHNOLOGY


No matter what area of a business you’re trying to improve, there will always be a new software solution on the market that can help. This is no different when looking to reduce costs. Whether it’s social media or an array of different integrations, any organization aiming to reduce costs will need to automate and integrate their systems, or cut archaic legacy systems, so they can provide the best possible service to their customers.


With Precursive, we provide a convenient, easy-to-use solution which helps to reduce costs as well as inefficiencies. Precursive’s project management solution gives you more visibility over the status of each and every project and allows you to make real-time, data-driven decisions. You can preview the project progress, the leading team, the status, and budget allocated to the project. This enables you to calculate the profitability based on your projected and current figures.


Precursive’s customizable project templates also allow you to automate task creation, saving a great deal of time each week. This means you can standardize your operation and recover billable hours that are otherwise wasted on manual tasks.


STRATEGY 3. HIRE CONTRACTORS


Due to the events in the last few years, more people are now working remotely than ever before. The best business owners try to see the opportunity in every situation, and taking advantage of this remote working environment can be a very important strategy in terms of cost reduction.


Not only can an organization save money by not having to rent out as much office space or purchase more supplies, but the list of benefits is drastically reduced for freelancers because they are self-employed. Furthermore, unlike professionals working in-house, studies suggest that remote workers are actually happier with their style of work, thereby boosting productivity.


For many professional services firms, hiring consultants can be a costly exercise, but their expertise often far exceeds their initial costs in terms of value. They can establish best practices and bring cross-industry knowledge into your business strategy to give you a competitive edge.


Contractors and freelancers are independent and work only part-time compared to their in-house compatriots. One of the big benefits of contractors is that they work to their schedule and often produce the desired results to businesses at discounted pricing.


Bench management remains a constant struggle for professional services firms. In short, bench time is the term any hours that are spent on non-revenue-generating tasks, such as an employee having a call with a client about a project. The biggest worry for many organizations is having too many employees on the bench, especially the expensive ones.


To overcome this, you need the right tools to forecast, plan, execute and analyze. To create such visibility, you need to link company-wide data across all departments through a real-time centralized system like Precursive. Our system allows you to monitor the collective hours so you can deploy your team efficiently and ensure your bench time is reduced.


STRATEGY 4. ENCOURAGE WORKPLACE TRANSPARENCY


Not enough businesses understand the huge risks associated with data silos. In short, they can ruin your company. You could lose important data while being exposed with no detailed strategy of growing your organization. The more silos a business has, the more blindspots there will likely be, encouraging theft, fraud, and selfish spenders to your business.


The shortfall of many companies is working with siloed systems. Things can easily get lost between systems and poor visibility runs rampant. The key to perfecting workplace transparency is to have one single source of truth, a centralized system like Salesforce, which can be accessed by all teams, whether they’re on-site or at home. Acting as a singular point for receiving and storing, and monitoring important business data around the business as well as to customers. If you’re looking for more than just words then you’re in luck. Companies that utilize Salesforce see a 35% increase in customer satisfaction and on the other side, customer service agents using the platform themselves experience a 34% boost in productivity.


When working with just one client, a variety of different departments will need to collaborate from the beginning of the customer journey to the end. From customer success to the project management team, having access to real-time data on one single system is crucial in eliminating any data silos and ensuring everything is communicated in the right way from top to bottom.


Incorporating cost reduction strategies into your business means it will become more difficult to hide waste, as they can give you a much clearer view of the growing business and pinpoints where the budget goes. Increased transparency leads to a better understanding of your business and how lower-cost strategies can work for you. Looking at the long-term, this can boost revenue and open up many exciting opportunities.


STRATEGY 5. SEEK RENEWABLE ALTERNATIVES


If you have a sizable office space to house all your staff, chances are it’s using up a lot of energy, and you could benefit by choosing some greener options to cut your electricity bill significantly. There are loads of energy-efficient appliances out there such as smart thermostats and LED lighting can help bring your bills down.


As well as energy-efficient equipment, it pays to educate staff on the ways of optimizing energy use. This not only helps to lower the carbon footprint of the company, but also inspires a positive workplace culture focused on utilizing cost reduction strategies. A company that sets objectives on caring for the bottom line will encourage employees to care more about their own work to grow the business, and as such will make them more motivated and productive in the office space.


This is not just an imperative for smaller companies, Salesforce have recently reached net zero residual emissions across its entire value chain and has achieved 100% renewable energy for all its operations. Salesforce achieved this impressive feat with the help of Sustainability Cloud 2.0 which helps companies get to Net Zero much quicker, enabling Salesforce to reduce its carbon accounting process from over six months to six weeks.


HOW PROFESSIONAL SERVICES COMPANIES CAN USE PRECURSIVE TO CUT COSTS


Accurate Time Tracking


Precursive allows you to keep track of the time you spend on each task and log it against them on your board. The logged time for each task can then be checked to see if it matches the estimated hours you planned for them.


Improves Resource Management


Precursive lets you see the availability of all your teams, allowing you to assign tasks and move deadlines if necessary. Work can be distributed efficiently, which will help to avoid saturation of talent.


Project Management


Precursive’s impressive project management solution gives you greater visibility of the status of each and every project, and empowers you to make decisions in real-time. We’ve mentioned this earlier in the guide, so take a look at what Precursive’s Project Management functionalities can do for you:


  • Break down a project and assign tasks to your team

  • Plan, schedule and track the project’s progress in real time

  • Share tasks, documents and project plans with your team and customer


Identify Non-Profitable Services


Precursive can also help professional services companies to reduce costs by identifying profitable projects. Our software can help to determine the cost of hours and aid businesses in improving their operations by increasing efficiency using our project and resource management solutions.


Precursive helps you assess which types of services are not profitable for your organization.


THE BENEFITS OF COST-CUTTING STRATEGIES


Improved profitability


Cost-cutting provides a foundation for more dividends to the shareholders and increased retention of profit for business expansion which in turn will create more opportunities for employment and further industrial prospects.


Increased cash flow


As well as increasing profits, improved cash flow can be a beneficial by-product of cost reduction. Spending less on supplies leaves more cash readily available to reinvest in the business or repay debts. Improving cash flow can be a source of great success for an organization, especially during times of economic turbulence.


Enhanced competitive position


If an organization can minimize expenses, they can keep prices low and attract more customers. If a company can be more cost-effective than its competitors without compromising quality, then it makes it that little bit easier to retain customers and limit churn.


Improved efficiency


Cost-cutting can also help to improve efficiency by identifying and eliminating waste. This can lead to faster turnaround times, lower costs, and happier customers.


Increased employee morale


Cost-cutting can also lead to increased employee morale by showing employees that the firm is committed to their success. This can lead to increased productivity and loyalty. Increased profitability often means employee bonuses are more viable. Monetary incentive, as well as clear business goals is the perfect formula for happy and productive employees who are committed to the organization and its vision.


START COST-CUTTING WITH PRECURSIVE TODAY


No matter your awareness and knowledge of cost reduction going into this guide, it’s very likely that you know a little bit more coming out of it. As you can see, there’s a wide range of cost reduction strategies business owners can choose from to help increase profits. It’s worth mentioning that not every strategy will work for every business, so you should consider your company and specific goals. Then, it’s about looking into cost-cutting measures so that you don’t have to take out sizable loans to get by. Instead, you can put your business on the path of growth and profitability.


Are you looking for help on cutting costs within your professional services delivery? Precursive can help. Our software can help you identify where you have any services that aren’t profitable. With real-time data on budgets, PS profit and client billings, we can help you maximize your profitability and get more control over your delivery. Take a look at our professional services automation today.


341 views0 comments

Comentarios


Find out more about the people and company. You can learn more about what makes us tick. 

 

We are passionate about changing the game for the world’s best services teams. 

 

Our mission is to help you improve time-to-value and make every customer a success story.

Asset 27.png

WHY PRECURSIVE.

About Us

Find out more about us including our mission, values and get to know the team

Salesforce Native

Give sales, services, support and customer success teams a single, shared view of the customer

Customers

Hear from customers on why they prefer Precursive to help them scale and grow their business

Professional Services Delivery

Our services team provides expertise in how the best companies improve services delivery

Support & Success Hub

Find the answer you need at our success-hub where you will find a mix of documentation, video assets and training materials

The Precursive Platform is 100% native to the Salesforce platform. Our solutions can be tailored to your needs and support a range of use cases.

 

Learn how we take the pain out of complex service delivery activities. 

 

Do the work, not the admin! 

Asset 22.png

Professional Services Automation

Increase operational efficiency with predictable services delivery and insights on performance

Project Management

Powerful project management capability designed to support high-velocity services delivery

Resource Management

Quickly mobilize your project teams, manage demand and avoid capacity crunches

Customer Workspace

An interactive community portal to collaborate, share dependencies and updates in real-time

Services Billing

Easily manage accurate professional services billing, raise invoices and track payments

Revenue Management

Recognize and forecast revenue with ease and accuracy

Precursive AI ✨

Leverage AI capabilities for better project management and boosting customer success. 

Asset 18.png

Get actionable tips and insight on customer onboarding, resource management and professional services automation via podcasts, blogs, whitepapers, product guide videos and our on-demand webinars.

Blog

A vault of knowledge from in-house & guest writers

Playbooks

Repeatable & scalable insight on a platter

Product Guides

Video guides for the Precursive Platform

Research

Industry trends and benchmarking

Podcast

Listen to all episodes of ‘Precursive Perspective’ with host Jonathan Corrie

Toolkits, templates, tips and more 

Events

Stay in the loop of what Precursive is up to

Webinars

Watch anytime, anywhere, on-demand

BY SOLUTION.

Asset 17.png
PROFESSIONAL SERVICES AUTOMATION

Manage people, projects and revenues in one place

Asset 20.png
RESOURCE MANAGEMENT

Staff projects faster with resource planning

Asset 21.png

PROJECT MANAGEMENT

Improve your implementation experience