Updated: 1 day ago
In this podcast episode, guest Adam Maze - Head of Operations at MMT Digital, speaks with Jonathan about the changing landscape in the world of Consulting, and how efficient or inefficient operations can spell make or break for consulting firms and their clients.
MMT Digital is a digital optimization company that builds platforms and partnerships that empower companies to realize digital value, faster. Its services include strategic consultancy, digital product delivery, and engineering and technology.
Some key learnings include:
Adam’s three main consulting frameworks to use with current and prospective clients
How revenue recognition impacts the world of Consulting
How customers' perceptions of consulting is changing
Metrics that matter
How to encourage efficient operations
You can listen to Adam's podcast here.
Jonathan: Alright. Cool. three, two, one. Off we go. Hi, everyone. Welcome back to Precursive Perspective with me, your disorganized host, Jonathan Corrie. It is Friday in London, and I'm delighted to be joined by the amazing Adam Maze. See what I did there mate?
Adam: Hey, Jonathan, very good. How are you?
Jonathan: I'm good, man. I'm good. That's as funny as I'm going to get. How are things, are you well?
Adam: Yeah, very good, Thank you. Just off the back of a busy week, but it was my birthday yesterday, so I got spoiled rotten, and I'm in a good mood going into the weekend.
Jonathan: Awesome, did you get anything nice for your birthday, apart from hugs and love from the family?
Adam: Yeah a few small things, the best of which was a heated blanket that I've got over my lap right now. In the current times with the weather and the cost of energy, it's definitely a winner.
Jonathan: Yeah, I just booted my wife out, this is the upstairs, the attic. She's like, 'it's cold in here'. Yeah, that's because the heatings not on! Go and get a heated blanket, that might be the prize. So thanks for coming on. Can you give us a little bit about the scope of your role because you're currently head of operations with MMT, so can you tell us a little bit about the scope of your role, a bit about the company you work for, you know, I'd call it everyone's chequered history.
Adam: Sure. Absolutely Jonathan. So In terms of MMT, so MMT is the digital transformation consultancy founded back in 99, if I'm not mistaken, by two chaps, Ben Rudman and James Cannings, who are both still in the business, despite going through two acquisitions since they founded it so that's really great to still have them in. Started in James's bedroom and without going through the full history they were burning CD-ROMs because James's dad, who is a business studies teacher, discovered the wonders of PowerPoint when he was used to using acetate overhead projector slides. So Ben then discovered that he could sell it to other schools, and MMT or multimedia textbooks was born. And obviously since then it's pivoted a little bit and is now a digital transformation consultancy delivering for large enterprise and mid-market clients. Really nice history to the organization. I joined just coming up for two years ago as head of operations. My role encompasses the real beating heart of any consulting business, which is getting the right people on the right projects at the right time. It's one of those interminable challenges, it's brilliant when it works and when it doesn't quite line up, you've got to get pretty creative and use your powers of persuasion and try and see things from a different perspective and see how you can get the right outcome for the business, the right outcome for the client and the right outcome for your people, because ultimately..
Adam: Yeah, exactly. So that's the core day to day, and I have a small but perfectly formed team who help me deliver that. I'm also responsible for our business systems that support that process. So making sure we've got the right data, we're driving that data driven decision making. That's a big focus for us. I've just actually been on the call with our MD, CEO and the rest of the exec team talking about our plans for the next financial year, which starts for us in March, and talking about the quarterly initiatives that we're going to run to really drive us forward as a business. Data information is just such a key part of that. Being in operations, everything that no one else wants to do falls at your door. Bit of GDPR, a bit of business continuity, quite a lot of interaction with the finance teams, the people teams. So keeping quite a few plates spinning, I'd say.
Jonathan: The thing is it's not fashionable, but it is fashionable, right? That's the thing. Everything you mentioned, you might not think it's fashionable or sexy, but believe me it is, I think, because it's like the lifeblood. It's the business model. I think the less people think of it as like the necessary evil, and more it's like the business model and the working cogs of the business, as you said, that drives the decision making in the data. I think it's a cool space because it's interesting because you are looking at things often through the lens of data, so that's why I was really interested to get you on, because as you know, our ecosystem is software companies and PS companies or consulting companies. So I was keen to look at things through that operational lens in the world of consulting. I think given, you and I have known each other for years and met when you were doing independent consulting. I know you've done some work in operations in tech previously, and some PS roles, and all sorts of things, so I'm always keen to hear people's observations on how have you seen the world of consulting and PS evolve over the last years because some things have stayed the same and a lot is changing as well.
Adam: Yeah, absolutely. I put a post on this out on LinkedIn a few months ago when I was doing an intro session for some of our new joiners on 'what is operations?' And I used a little Excel calculator that showed the fundamentals of operations in a professional services business, which is, your three main levers are what's the cost of your people, what's the utilization of your people and how much you're able to charge your clients in terms of day rates. And fundamentally, those things haven't changed. We're still trying to deliver great value for our clients, make sure that's commercially viable for us as a business, recruit great people and make sure they feel engaged by working on really interesting, exciting work. I don't think that has changed very much in the consulting and PS landscape. What has changed is the business environment. So, in terms of the technologies out there, in terms of disrupting existing markets, in terms of digital transformation in general, the technologies that have come onto the market have really changed the game for a lot of clients. And some of those clients have been able to sort of adapt really well to that and be really agile and adopting new technologies. And some clients, dare I say, often larger, more enterprise style clients they're more of that kind of oil tanker that takes a long time to change direction. And so I think it's affected different sectors of the markets in different ways. But certainly, we particularly are seeing a real drive towards composability, which is one of our key offerings, actually, which is less about big, single vendor solutions that cover everything because those tend to be inflexible, and you have to shape your business to those products as opposed to the other way round. So the composable architecture where you can adopt best of breed, you're using microservices, APIs, all that good stuff. Getting beyond my technical knowhow pretty quickly here. But fundamentally, a business can be much more agile and can plug and play different best of breed products to meet their business needs, which may change in the next three, six months. So they need to be able to have that flexibility. And I think that's probably the main change we've seen in the technology landscape.
Jonathan: No, that resonates a lot because we operate in the Salesforce ecosystem, so our customers, like us as a business, we use it as a platform, and then we've got multiple applications running in it, which are managed packages on the platform that all come together to provide. I like that, the composable architecture. It's interesting, someone put out a post today talking this week, about how many of the core Salesforce offerings are just managed packages, ones that they've bought and integrated, so it makes a lot of sense. One thing I'd like to get into a bit later, spoiler alert people we do prepare, where we talk about the anatomy of a PS function. We're going to talk a little bit about metrics. I would like to explore, you mentioned cost, utilization, day rate, I'd like to explore this. I think utilization can be very one dimensional, so I'd love to explore the idea about profitable utilization, because you can be busy, but is it productive? Is it profitable? So that would be interesting. One of the things I think that's influencing the world of consulting is obviously technology. So technology and then, things like the terminology customer success. My wife, who I just mentioned, is looking for a head of customer success for her event company, for example. And so I'm curious to know, how have you seen a shift, given this more success-led lens, how have you seen how customers judge the success of consulting engagements? Have you seen that? Is that changing? Is it just more specificity, what's happening there?
Adam: Yeah, I think so. I think it's fair to say in the past that typically a consulting company would go in if they were pure consulting and not technical delivery, they would take a problem space articulated by the client, bring the expertise and value that they have in that particular problem space, give a load of recommendations, leave the client with a hundred-slide deck, or in the older days, a massive pile of paper on the desk, Bang. And the client would say, thank you very much, and it would just stay on the shelf, and things wouldn't change. I think the difference is now clients want to see real sustainable, impactful change from the value they invest in bringing in an outside firm, a consulting firm, and so landing the big deck, the big pile of paper on the desk, that just doesn't fly anymore. So it's much more about proving expertise. It's more about really understanding and getting under the skin of what your clients need because what they say they need isn't always what they actually need, and you have to be an intelligent supplier and be able to bring them on that journey with you and then provide effectively solutions that take your recommendations, but make them real in real life, in the real world and deliver real benefit back to the clients. I think that's probably where we are now as opposed to where consulting was maybe even ten or 15 years ago.
Jonathan: That resonates a lot. I love that booklet analogy. I remember those days, 'here you go, put that in the drawer.'
Adam: Yeah, exactly. Tick the box, no one got fired for hiring IBM, that kind of thing, right?
Jonathan: The thing is, also consulting companies are looking at SaaS and going, 'I like those valuations' because they don't want to start from zero potentially. So there's been a shift in how tech has influenced the world of consulting in terms of business model, in terms of client expectations, in terms of focus on outcomes and all of these types of things. And so I think that there's this rise of the 'Saas-ification' if you will, of the consulting market. So how have you seen that influence the thinking of consulting businesses?
Adam: So I think it is the Holy Grail. The classic challenge of a consulting business is that you can't see your revenue stream for more than three months out, if you're lucky. Most consultancy is more like six weeks. So that promise of recurring revenue is a real game changer if you're sitting inside a professional services or consulting company and you're thinking about how do we plan further in advance than three months? And what that's led to is a productization of consulting services. So consulting and professional services organizations are getting smarter around saying, okay, what do we know? Where can we bring our value and how can we productize that to deliver value to our customers in a way that is repeatable, in a way that drives speed to value and in a way that is commercially viable both for the client and for us, and I think that's probably where we're seeing the shift. In my experience, consulting organizations that try to become product companies don't tend to be very successful in those endeavors and that's because of the nature of a consulting business. I think starting up a product company or evolving a product company from day one is very different to thinking, I'm a professional services company, I'd like a bit of that recurring revenue, so I'm going to create a product. I think that's quite a tough ask. But, productizing what you do well, I think is a much more visible and smarter route to driving. It's a simpler path for sure.
Jonathan: And I think often times that's the mistake that I observe or I hear about, and I'm not saying I'm a guru, in a lot of their cases, I'm just observing a lot of what's happening, and it's this jump from 'we're a services business and then we're going to develop a product', and so I've been talking to people, really thinking about how you choreograph that evolution, and you don't need to jump to being a product business. Get to being what I call SRR - services recurring revenue. So forget about ARR, put that out. But get to SRR, services recurring revenue, how do we get to that? What had started it, obviously we've got customers in that space. Some of them have got managed services, businesses, they're all looking to grow that. That's the big shift that I've seen over the last two years. That used to be less fashionable maybe, I don't know if that's the term. It was certainly like people looked at it as maybe being lower margin and therefore less fashionable and 'it's nice to have'. But everyone's actually looking at growing that because of the value of it and it's recurring, and I'd be interested to hear what you guys have been doing there. But it's just this idea of, I like what you said there about how do you package your value IP, your IP, what's your IP, how do you package that? What have you guys been doing when it comes to what have you built? And tell us a little bit about some of the offers and what you've been through there.
Adam: Sure. So we've built out what we call our three main consulting frameworks, and those are frameworks that we apply to prospective and existing clients depending on where they are in their digital transformation journey. So we have a framework called North Star, and that's very much for organizations who are early on in their digital transformation journey and don't really know where to start and just need that North Star to help guide them to the next stage of their journey. We also have Compass, and that's for organizations who are maybe on their way but aren't quite sure of their direction of travel and that's just trying to get them back on track and course correct. And then we have engine, which is very much around technical delivery and that's 'how can we come in?' You understand what you want to do, you've got the structures in place to do it, but you maybe need some support doing the actual delivery of these things, doing things in a more agile way, doing things in a more repeatable way and benefiting from best practice in some of these areas. So those are our key frameworks, and as I said, depending on where clients are in their digital transformation journey, we will look to take them on one of those journeys, if you like.
Jonathan: No, I like that. I don't know if you've been paying attention to this show, but I always bang on about language being so important, because it's emotive and it helps people get it. So yours, I like the fact that you call them frameworks. I think that a framework to me speaks to here's how we're going to get somewhere, right? And I like how you've got North Star, which is like your accelerator, right? And then I literally write down North Star, accelerator, compass directional, engine, enablement, enabler. Again you're choreographing the journey for them aren't you, in a way.
Adam: Yeah absolutely. And the way you've paraphrased those is very much in line with how we see them internally and how we want to bring value to our clients. I think that's a good insight.
Jonathan: Not my first rodeo. But talk me through, though, what's been some of your experience about rolling these out, selling them? As you're looking at this, what are some of the learnings? I know some of it may be early, by the way, I appreciate that, that doesn't matter, doesn't matter if you develop these things yesterday, bluntly. What are some of the things as you look at this, what are some of the things that you're learning about it?
Adam: Yeah, and I think you're right to call it out Jonathan, because it is a learning experience for us as much as it is for our clients and I think what we're learning is it's sometimes difficult to create a one size fits all package or framework, as we've called them. Different clients, no matter how similar they are on the surface, have different internal drivers and whether that be their ownership structure, the stakeholder landscape, external business pressures, all those things that are fundamentally different. And how that affects what we do really very much depends on the individual clients. There are obviously commonalities between all organizations, particularly organizations in a particular sector that we can leverage and we can say 'our experience in this area is...', and we can bring that to bear on the work we're doing. But I think we probably started out this journey thinking it's brilliant, we'll just document everything we know about starting a digital transformation journey, and that will just apply equally to all our clients, they'll be really happy and we'll be able to do what took organizations traditionally six months to do, in six weeks. And I think the reality is that that's obviously the end goal for both us and our clients, but I think the reality is slightly different and we're just having to navigate that journey of knowing where to flex those frameworks in the right way to really support our clients on that journey. I think that's probably the learnings, and you're right to call it out, we are relatively young in our adoption of these frameworks, and so it is sort of a journey and it's iterative, to use the agile term. An iterative undertaking, if you like.
Jonathan: It doesn't matter a jot though. Frankly speaking, whether it's you roll them out two weeks ago or whatever, the fact that you're doing this is good news to your clients, because what you're bringing to that is again, your IP and your expertise and you're forcing yourself into curating this and providing a conduit to it for clients. So if you were to come to me and say, "Hey, you know what, guys, I'm going to sell you this thing that we do differently every time". I'm like, "alright". Or you say, "this is what we do day in, day out, over and over again, there are some nuances to it." That's much more attractive to me, that gives me confidence. I think the bit that people have to reconcile, I think, is that you have used the word flex. The Nirvana state of everything is always the same, is ********, right? There's an 80-20 rule, I think it's a reasonably good guide, which is to say we need to accept that there are thresholds. We want it to look like this, but in reality there's a threshold of scope change, there's a threshold of outcomes - different outcomes that we might need to deliver or drive, and there's a margin threshold. So we must acknowledge that that's going to happen, and when you acknowledge that and you know it's going to happen, then you stop getting into this philosophical debate about, "isn't this stuff all supposed to be standardized?" And you can say, yeah. If 80% of it is standardized or 70% or even if it starts at 50% of it standardized, and even if it's just the ways of working, the steps in the process, the workshops that you run are always the same. It's a lot easier to onboard new staff, train new staff because it's like, okay, the delivery method is cookie cutter, but what we're talking about in these sessions is different. So I think that's my rant on it. But does that make sense?
Adam: Yeah, absolutely. I mean I completely agree. You're right, it's not one size fits all. It is different for different clients. But if we really understand the framework ourselves and we enable our people to deliver that framework in a consistent way, as you say consultants are typically quite good at being fungible and being able to adapt to the requirements of different clients so we can have that structure but also bring that flexibility to it as well, and that will lead to a good outcome for our clients.
Jonathan: So one of the things that I was interested to ask you about was, when we're structuring these things, ideally we're going to work back from 'what are the outcomes we want to drive for our customer?' Like you said, are we North Star? Are we enabling you to get there better? Are we accelerating how you get there? Are we helping you plot a path? All of these types of things. And then there's what's in those offers? Now one of the things that I remember is you and I chatting about years ago is this gray area between what we sell, the governance and then the rev rec, which is always fun and games. So let's look at revenue recognition for a moment. It's an important piece and it's something that I think you can't really forget if you're going to roll out multiple offers. So I don't know, it's like an exam question - discuss.
Adam: Yeah, you're absolutely right, Johnathan, and I'd layer something else on it, which is, how does the end customer perceive the financial build up of a commercial proposition versus how do you treat it internally, because those two things are not always the same thing. So, from a revenue recognition perspective, taking it in its simplest form, if you've got a framework that you are able to size and estimate for your client based on the effort you know it will take you, based on the agreed cadence and the structures and the tools and templates that you're using, what you should be able to do once that proposition is mature enough, is provide a client a fixed price. And actually what you then do, and particularly on the earlier stage of propositions is honor that fixed price and recognize that fixed price on percentage effort delivered. So let's say something, a North Star was 100 grand and you were working on that consistently over a six week time period. Once you're halfway through, you'd have recognized 50 grand effectively. That's quite simple. Obviously, how you structure the payments are separate to that cash flow and revenue being distinct entities. Some organizations might ask for 50% of the cash on delivery to fund the team. Some will only ask for the payment at the end for a particularly short piece of work. Some will stage it in between, which is more relevant to I guess longer pieces of work. In that sense, the client knows that their cost is fixed, but from an internal point of view, you're only recognizing that revenue in accordance with the value you're delivering, and the time you're spending on it. That would be a typical kind of fixed fee with non-technical deliverables. Obviously, if you've got technical deliverables, there's a lot more risk involved and therefore you have to be a lot tighter on understanding scope, setting dependencies, documenting your assumptions because any misunderstandings or misaligned expectations in those areas could result in a major kind of financial risk to you as a professional services company. But if you're doing a consulting framework with document deliverables, that risk is relatively low and therefore you should be pretty confident about pricing and recognizing that.
Jonathan: Which is more of a milestone-based approach, right?
Adam: Yeah, absolutely. It would be a milestone-based approach in terms of how you charge it, how you recognize it would be on time booked. We've got pure T&M. That is where you say "we think it'll be about 100K, we'll bill you on time booked, expenses incurred." Back in the days when people used to travel to see clients. Don't even talk to me about the expenses spreadsheets that I used to have to fill in, and attach my physical copies and send to the office. Sorry, I digress. You'd base that literally on time booked and expenses incurred, and that would be typically a monthly invoice at the end of each month. And that is one area where your billing and your revenue recognition really do tend to sort of line up in a very 'one way.'
Jonathan: I think that the fixed price one with effort is always the danger zone from what I hear. As you described it, you've charged the client 100k, got a six week engagement, and technically from a rev rec standpoint, if you're doing it on effort expended, you're 50% of the way through and you're recognizing half that revenue. But actually having half the value, you're halfway through the engagement, and that's where you can come unstuck pretty quickly if you don't have good alignment between, let's say the project timeline and deliverables, versus the effort and the revenue recognition.
Adam: Yeah, and that's a really good point, Jonathan, and a lot of organizations on smaller jobs will defer that revenue until the finer payment milestone to make sure that they're not over-recognizing and they're taking account of that risk, which is a very conservative view but some organizations do go down that road, but I take your point, it's a gray area because 50% of the time band may not equate to 50% of value delivered. So it's definitely a gray area.
Jonathan: It is, and part of the reason I know this because we sell a, spoiler alert, PSA solution is because the project plan is disconnected from the resource plan, and from the timesheet. I was talking to a company the other day, they do project management in MS projects, and then they've got a PSA solution, and literally the version that we just talked about, fixed price, I'm like that's where you get into the danger zone because someone's putting another line in MS projects, actually that's just added a month to your engagement, you're recognizing all this revenue in your PSA solution, and you actually haven't delivered any of this stuff, so you know, ideally the project plan should drive the resource plan which drives the revenue. But I think the point around this for me would be, a recommendation to others would be, if you are looking at structuring these types of offerings, these packages, depending on your level of tenure in this area, you want to be BFFs with your finance director and CFO, right? You've got to go into that in a very collaborative way. Just a point on this, if you are less experienced with this, I know you've got a lot of experience with this, but if you're newer into the role in this area, how would you recommend others getting the CFO on side? Would you go in and say, "hey, I want to structure this in the right way, help me understand how we're going to recognize revenue." How does this work? Do you need to get almost upscaled internally on it? What would you recommend folks do?
Adam: Yeah, I think so, because every professional services firm or professional services organization attached to a SaaS company will do it in a different way based on their risk appetite. So I worked in an organization where if you didn't have a signed statement of work that was red work at risk, we can't recognize any of that revenue until you've got the signed statement of work. If you've got a signed statement of work but no PO, that wasn't such an issue because that was more of a cash flow issue than a commercial cover issue. But that work at risk metric was really scrutinized. I worked for another company post that where it's like, "oh it's fine, we're working on it, we got an email from the client, it's all good." And they've recognized that recognize as booked on the basis that their experience was they had really good relationships with their clients. Yes, some of the clients, particularly the large ones, have onerous internal processes that mean the statement of work sometimes takes a while to come out the back end. But actually their experience in that area wasn't littered with burned fingers, so they were quite comfortable with kicking off work and ramping up a big team, even though they hadn't had a signed statement of work yet. So it really does depend on the organization, I think. But definitely talk to the CFO, the FD, your finance business partner, and just understand what is the attitude to risk within your organization and what are the internal processes that you need to follow? Don't fall foul of those for sure.
Jonathan: Yeah. And don't believe what the PSA vendor is telling you, that it will solve all your problems because again, spoiler alert people, you'll have to configure it according to the rules that your business follows. So you're not going to follow the PSA rev rec rules are you, it's going to be your company's. So if they're saying to you "just put this in and it does everything." No, you've always got to configure or customize it or change it because if you're following certain - not even laws - but just your own principles. I like to think that we're honest about it, but it's the bit that I discovered when we were like 'let's build out that functionality' and I'm like, 'everyone's doing it in a ******* different way, it's a nightmare.'
Adam: Yeah and the different scenarios you come across, on the surface of it, you think, well, it's easy, it's fixed price, it's T&M or it's managed service, butt actually, you are only limited by the creative juices that your sales and and customer services people have in documenting contracts and you look at it and you go, I've got no idea how we're going to systemize that. So we're T&M, but we hold back a percentage of what we build because the client wants a risk part, and you're like, 'I've got no idea how to systemize that', but that's an actual scenario, by the way. The other classic one is use it or lose it. So you buy a bucket of days and you've got to use those within six months or something like that and when people are booking time, that's fine, it's T&M. But when the client's used 80% of the days and you get to the end of the period, how do you then recognize the other 20%? No one's booking the time so how do you systemize that? So yeah, there are various scenarios.
Jonathan: We had to build that custom for someone, and they've got a use it or lose it service credits bit, and it had to be custom. So you talked a little bit about the importance of the role of operations in running a PS org. Talk to me though then, let's move onto something that's well-run, talk to me a little bit about the key components of it. So what are the building blocks? Could you build on it from earlier, the costs, util, day rates?
Adam: Sure. So I think the first thing is, and this is something that I'm very hot on as people in MMT will know, is understanding the value streams in your business. So where does value start? What is the value you're delivering to your end customers? How can we make that process more efficient and more effective? Because that's where we really generate value. And the great thing about operations is out of all the functions, operations is the one function that probably interacts with the other functions more than any other two functions interact with each other, because we're talking to client services, we're talking to new business, we're talking to people in HR, we're talking to finance, we're talking to the project managers and understanding what their resource needs are. And actually, we've got the clearest picture of what's going on in the business day to day. And we tend to be, as a function, the first people who see blockages in those value streams and those business processes. And being action oriented, we jump in and try and fix those blockages. But if you're not maintaining an overview of how the business hangs together, either through process maps or the right documentation, documents on SharePoint, however you do it. I'm a very visual person. I love to see things visually. I don't like processes written out in bullet points. I want to see what's the flow and all that kind of stuff. I think that's for me where we add a lot of value. Yes, there's the classic, traditional view of the ops person is the Rottweiler who's trying to keep utilization up because that's the driving metric in a professional services business, and yes, to an extent we're there, we're making sure that, what some businesses call casting, some businesses call resourcing we call matching, matching the people to projects, that process is working efficiently and we're really acting as the catalyst, the broker to make sure account teams are making the right decisions not just for clients but for the business as well. But I think it's too easy to overlook the helicopter view that we have and the ability that we have to really fix bottlenecks. And for me, if I were to say, what's the one thing that your operations function should do? It's get that really clear view of the business and fix those bottlenecks or enable the fixing of those bottlenecks.
Jonathan: No, I couldn't agree more. I mean, going back to your data driven point, right? I was talking to our head of operations and we were looking at annual planning, and I remember, I'm one for as you know, a dog walk, so walking my dogs and talking at the same time. And I remember I was talking to the head of Ops, who's also the head of Ops and finance. We were talking about forecast demand and delivery capacity for later in the year, and I remember saying, "Oh, I think." And I was like, "I don't want to be saying I think" I was like, "let's plug in." So we plugged in more of our forecast into Precursive to look at where we were over or under, and actually it was the opposite of what we thought it was. So I like the idea, though, I think the data piece is so important, but I like the fact that you work back from value. Because if you don't do that, where do we drive value? What is the value vision, if you will? The rest of it should take care of itself if you're really clear on that. Because again, the other bit that I think is maybe underappreciated sometimes is about operations, is it's not just how can we improve utilization. Part of the way that you improve utilization is by pulling people off projects because they're towards the end and you need to pull the team out and cycle them onto something new. But the client doesn't want to let go, but we've actually delivered the outcomes, we need to take this away now. And that's why I think, for example, in SaaS, the real shift, what people are really tuning into is this idea of time to value, which isn't necessarily what you always want in consulting because you want the engagement to go on for a certain amount of time. But fast time to value, one of the things about that or delivering outcomes is if you've delivered, you can then pull people into something else, cross-sell, upsell, whatever it may be, and so you sort of have this cycle. I want to ask you, though, we talked a little bit about the metrics and some of the metrics that matter and you talked about managing cost and util and day rate, right? Can I ask you though, so those I would imagine are the key metrics that matter really, but let me just ask that question then. So utilization can be misleading, right?
Jonathan: If there's not more nuance to it, it's a little bit more three-dimensional, e.g. is it either productive, is it billable, or is it billable within the realm of billability that we want for that period? E.g. we build all this stuff, but we can't actually build anything later on. So when it comes to that, do you need to have a more three dimensional view of it?
Adam: Yeah, you absolutely do. And to those three metrics I mentioned at the start of the call, those are very much the baseline metrics or if you like, the kind of general metrics under which a number of different metrics fall. So you're absolutely right with utilization, you're not just looking at billable utilization, you're also looking at productive utilization. So, if my people aren't billable what are they doing to help drive us forward as a business? Are they getting involved in pitches or bids? Are they developing capabilities or propositions that we can then take to the market to drive more growth? Are they working on upskilling themselves to make themselves more fungible and more T-shaped so that the next client opportunity that comes along, we're not necessarily boxing people into capability silos. So there's absolutely that kind of view of productive utilization. There's also work that we're doing on clients that may not be directly billable, but we use them to drive value, like doing a spike on a potential proof of concept and trying to prove value to a customer. Maybe you timebox that and deliver that potentially if you've got some spare capacity in the business, that's a really good use of it, typically. You could also build internal capability. So one of the things that we did, our HR system and our PSA, when I came into the business was not linked and someone was literally hand-entering every day. "Oh, this person's booked this holiday, I better hand-enter that into the PSA", and I just put my head in my hands and said that's just such an inefficient use of someone's time. So one of the things we did was get one of our developers who happened to be between projects, who built an injector, so that you pull a report from our system and we inject it straight into our PSA, and that takes away all of the manual effort. We want to get it to a fully integrated solution where it's completely systemized, and completely integrated, but that's a little while off, but at least we're taking steps together.
Jonathan: You know where we are when you want to come to the Promised Land, mate don't worry. Look, really appreciate it. Really good show. I think there's a few things. There's a value thread, which is actually not intentional, but I think it's definitely come through because you've talked about the importance of understanding your value and your IP and structuring that and articulating that in a way that customers understand and that makes sense to you internally from a sales and a delivery standpoint, which I think is insightful. You haven't overcomplicated it as well, it sounds like as a business, right? I love the rule of threes. Barack Obama's speeches, rule of threes always, and it's easy to consume and it's digestible. I think the the point that we talked about and you used the word flex is just understanding that this promised land of 'everything is cookie cutter' is not really reality, and so forget about that and start thinking about that 80% of what can we do that is very repeatable that we do really well that means it gives us that time to do the stuff where we need to be creative with the client or creative in the delivery and these types of things. It gives us that time to do that. And then I like the fact that, when you talked about what is a great PS organization, where do you start from? You start from value, right? What's the value that we drive. So no, really appreciate it. Did you enjoy it?
Adam: Yeah, it was great. It's always good to catch up with you, Jonathan, and our conversations are always interesting and engaging. So great to be here.
Jonathan: Appreciate it, mate. All right. Have a good one. Enjoy your Friday.
Adam: You too, have a great weekend.
To access our other interesting and engaging podcasts, click here.Check back regularly to listen to our latest podcasts.
If you would like to find out more about how Precursive can help you increase your business's operational efficiency, get in touch today.