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engagement Buy-in by client resources is especially important because they will inevitably have key pieces of information that will be needed by the project team Given the competing priorities most knowledge employees have, without their buy-in and active participation, the engagement team may get involved in unnecessary or counterproductive activities In addition to buy-in, this phase allows you an opportunity to build your credibility It is always easier to build credibility in the eyes of a client before problems are encountered on a project Many problems can be resolved with directed effort, but without credibility, the client may not even give you a chance to improve a situation Successful outside consultants provide leadership to clients during engagements Although the client is the final decision maker, they are often satisfied to trust your judgment and recommendations if you give clear explanations and information, and follow the correct processes Providing leadership in this phase establishes a precedent that will last for the remainder of the engagement
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inning the business or the engagement is an initial challenge for the consulting organization to overcome The next challenge is to successfully deliver the engagement and to grow the business The key to doing this is staying on top of the engagement and managing it proactively The moment this is lost and the consulting engagement team becomes reactive is the moment that lack of profitability sets in This is when a client begins to hedge bets and wonder if another vendor would not be able to perform a better job than your organization Reversing this spiral costs effort and money that comes from the bottom line of the consulting organization This chapter describes a set of controls and techniques that can be used to monitor an engagement and make appropriate adjustments before a problem becomes a crisis As shown in Figure 9-1, these controls are in effect until the engagement is completed and closed Managing an engagement by crisis is a losing proposition, and these controls will help you to avoid following this path
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Figure 9-2 shows the slim profit margin that must be protected on engagements It doesn t take much to reverse the two lines and begin to bleed money all over the place Furthermore, the relationships between expense growth, revenue, and profit are not straightforward For example, a dollar of expense does not necessarily yield a dollar + x of additional revenue or profit This is because of the way fully loaded expenses are structured
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Fully Loaded Expenses
Fully loaded expenses take into account all the costs associated with an employee Some of these are relatively fixed for a specific number of employees, some increase at a slower rate as the number of employees increases, while others are more or less incremental Figure 9-3 shows a typical relationship between the price paid for rent and the number of employees that can be serviced As the graph shows, spending a certain amount on rent can provide you with the capacity to support a range of employees For example, paying X for rent provides you with the capacity to support up to 40 consultants After these consultants are hired, more space is required and leased Assuming that we can now ask for a bit of economies of scale from the building owners, we lease an equivalent amount of space (original lease X + newly lease X = 2X) but ask for and get a discount, Y Furthermore, you also want to find a way to efficiently organize working areas and get more consultants to work on client premises, so you are able to support 10 percent more employees Therefore, for a price that is just less than twice the original rent, you are able to support just over twice the number of employees This approach allows you to squeeze a little more margin or potential profit out of the practice
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