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Management Information |
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Three Professional Services Resolutions for 2005
With client expectations higher than ever before, and the gradual industry recovery ahead, consulting firms will need to focus more than ever on carefully identifying and serving the right clients. Based on a recent interview with Brad Smith, VP of Research at Kennedy Information Inc., industry growth data prove that this is a great time to "niche thyself" and capitalize on targeted industry opportunities. Consulting industry growth has been declining for three years, and more consolidation is ahead. According to Smith, "Systems integration and consulting industry growth is expected to grow only 1% in 2004, 3% in 2005, and 4% in 2006." For now, the double-digit growth of the late 1990's is a distant memory. Thankfully, three industry sectors are looking quite attractive for IT leaders and consultants to pursue. Healthcare is projected to grow between 8%-9% between 2005-2006. Public Sector is estimated to grow between 4%-5%, and Financial Services between 3%-4%. Another strategic trend to seriously consider is that the services behemoths are getting bigger--and are willing to take on more risk. The new CEO of Accenture, William Green, is boldly going where few have gone before-value-based pricing. According to a recent interview with Green in BusinessWeek, "Accenture will build services so exceptional that they will be required to compete in any industry, from financial services to manufacturing. "Green expects their new "high performance business" model and business expertise will help clients become top performers in their industries. For any firm that chooses to deliver on value-based pricing, the pressure to deliver measurable value will be stronger than ever. Alan Weiss, the godfather of value-based pricing, provides several guidelines in his book, "Million Dollar Consulting: The Professionals Guide to Growing a Practice. " Client environments and priorities are changing, and this will also affect the level of consulting relationships clients expect. During my ten months of research of IT services CEOs, I often heard respondents mention offshore outsourcing and cost containment as a method for creating a stronger profit picture. Now, those strategies have reached a plateau; they have done all of the cost cutting they possibly can. Consultants who are committed to capitalizing on these trends should seriously consider these strategies: 1. Be highly selective of your clients by following a vigilant client qualification process. How aligned is their leadership team with the idea? What is their track record of maintaining high-integrity relationships with outside consultants? How willing are they to track and monitor their progress-and thank you when you have contributed to those results? As my coach says: "Say 'no' to the good, and 'yes' to the great. " 2. Identify your target market, and focus most of your efforts in that market. Who is your perfect client? How do they behave? How much do you enjoy their industry/culture? What are their most common frustrations? Do they truly recognize they have a problem? Are they willing to spend money now to fix it? If your target market is IT services, software, internet or security related services, or hardware, do not assume a high willingness to spend money today. These industries are notorious for developing solutions in-house, or delaying decisions until the last moment when they hit a crisis. 3. Ask trusted colleagues to assess your credentials and behaviors. Ask for brutally honest feedback that is supportive, not critical or judgmental. If they were considering you to help them solve a problem, would they hire you? What makes you stand apart from the market behemoths? Establishing credentials is more important than ever. Adaptive, focused consulting leaders have the most to gain in the next two years and will garner the most market traction. The rest should accelerate their exit or restructuring plan. Lisa is President of Nirell & Associates in Del Mar, CA. Her "Profitable Growth Series" workshops and advisory services help leaders gain clarity on their purpose, and retain their best people. In addition to having 23 years' experience in publishing, consulting, and sales, Lisa has served on 3 Boards of Directors. For a free copy of Nirell's Special Report and a free subscription to NirellNews ezine, call 858-481-8787, visit http://www.nirell.com or email marketing@nirell.com.
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