The traits of a successful service based company – Part 1
Posted by Graham Kimberley
Perhaps the best starting point is to define what I mean by service based company. Quite simply a company that provides a range of services to other companies. So, for example, a traditional professional services organisation (PSO) undertaking management consultancy, accountancy, audit, architectural and design services or offering engineering or electrical consulting or facilities management expertise.
The common thread is that they are all people-centric at their core and work on a project, job or engagement basis across some if not all, of their operation; capturing time, expenses and purchases to enable many and varied billing rules and procedures. In addition, we find that they often have complex and evolving business and operational structures, processes and units and have to manage significant and frequent change. They operate in a crowded and competitive market place and are continuously looking to gain a competitive edge.
As a result these companies have to become the best of the best and adhere to best practice if they are to create and retain a successful, growing and sustainable business model.
In this series, I will be outlining my thoughts on what it takes to be a successful service based company. To get us started I have drawn together a list of the characteristics of a modern and dynamic service based company taken from my experience of working with some of the best in their respective sectors.
- Focussed on client satisfaction – putting the customer at the heart of everything they do as a business is fundamental. And this means getting to know the customer, their employees, culture and vision, understanding their needs and expectations as well as defining what they can deliver to each and every customer. It really is all about the customer.
- A desire to do their best for their own people and to:
- bring the best out of all employees by listening and through ongoing investment in personal and career development.
- enable employees to focus on the job they enjoy and are passionate about by equipping them with the skills and resources required and removing unnecessary, time consuming tasks from their to do list.
- retain and attract talent.
- To ensure the best utilisation of their people – making sure that people and skills are matched to the right projects and are not left sitting on the bench.
- They utilise the finance function to add value to the business, ensuring the skills and capabilities are used to analyse data and advise and guide non-finance managers in the business more effectively.
- Have robust practices and supporting systems that can be adapted as the needs of the business and its customers change.
- They measure through a range of key performance indicators metrics such as cash flow, utilisation and profitability as they look for areas of repeatable excellence and addressable concerns. This enables them to focus on what is important to them to understand, what is working well so they can replicate it and to address and/or eliminate areas of poor performance.
- Comprehensive oversight and governance - managing the business and its processes to ensure adherence to company, ethical and imposed rules and regulations.
- Ensuring speed and accuracy of billing – cash flow is king for a service based company and tight management of finance processes is critical to long term success and growth.
- They are innovative and constantly look for ways to improve - it is too easy to sit back when you think things are going well. The best organisations are always reviewing processes and new technology or practices that could help them improve further seeking out best practice and review its applicability to them.
- They constantly look for ways to grow, organically, acquisitively, or through diversification. A successful business will always be looking for new routes to market, ways to open up new opportunities and channels to broaden and extend market reach.
- They seek out and eliminate duplication, manual practices and multiple spreadsheets and ensure they have a single source for information. Duplication and reliance on multiple data sources commonly results in low productivity, an increase in errors as rekeying data tends to lead to frequent and troublesome errors, poor decision making and conflict. Manual practices are also slow and demand a decision by the user, which may be wrong. A single source of data means better, more reliable, informed and comprehensive information, which drives better, faster, proactive decisions and prompt identification and resolution of issues.
- They manage by exception - you can show people everything and let them decide what they need to focus on, or only give them items that need work. For example, instead of approving all invoices, supply only purchase invoices that do not match PO’s and therefore require a decision.
- They utilise the latest, cutting edge technologies such as automated workflow, mobile technology, digital assistants, bots and machine learning to give them an edge in what is an ever more competitive landscape.
Those companies that suffer from inertia, a reluctance to change and a willingness to accept the status quo will over time be overtaken by more agile and forward thinking competitors.