How ERP helps consulting firms

How ERP helps consulting firms

Introduction

The demand for ERP solutions is expected to increase at a steady rate. In 2020, the ERP industry is worth more than $40 billion. Both supply and demand for ERP solutions are increasing, and ERPs are turning into more business focused solutions

For consulting firms, agility, control, and visibility are the three main factors that drive performance. To manage project delivery and to stay ahead of competition, consulting firms are transitioning to well-designed cloud ERP. Consulting firms rely on their employees to complete a project and deliver on time within a budget. With globalization, customer behaviour changes and technology transformation, project complexity keeps increasing. An ERP for consulting forms provides the technology to enhance the firm's performance, track projects and Resource planning, and identify levers of improvement.

What are the benefits of an ERP for consulting firms:

An ERP provides the visibility and the information that is required to make the right decisions that drive performance. Most consulting firms start working with excel spreadsheets, but spreadsheets are unable to anticipate and forecast. They provide a rear-view mirror that impede consulting firms management build a competitive advantage as they increase projects margins and consultants utilization.

When choosing an ERP for consulting, there are three main benefits to look for :

  • 1) Project management and on-time delivery: The adoption of an ERP will help you reduce delays, and budget overruns. An ERP for consultants will increase the turnover of successful projects and will help increase the on-time delivery performance. Not only does and ERP bring better performance and profitability, but it also contributes to client’s satisfaction.

  • 2) Process automation: Consultants typically have many administrative and repetitive task to perform: time tracking, expense reporting, Resource planning, client billing… These tasks are non-value added and impede them from spending more time to search for new projects or increase clients’ satisfaction. An ERP provides the technology to automate all the processes and generate significant productivity gains. When it comes to calculating the ROI of an ERP, the time saved at all levels of the firm has a significant impact on the result.

  • 3) Resource planning and flexibility: Now more than ever, professional services businesses need to add flexibility to their resources. Not only does the economy become more and more volatile (the regular crisis are just examples) but the entire workforce yearns for more flexibility (50% of the US active population will be independent in 2027). An ERP helps firms work in a collaborative way. Workflows and tasks management are designed to safely transfer information and keep track of it, information is shared in real-time to the right people, work can be done on smartphones wherever the consultants are.

How can ERP helps consulting firms become more competitive?

An ERP for a consulting firm is a crucial asset to get a better understanding of the business and to improve its performance. Some of the competitive advantages are:

  • 1) Instant visibility: Most of the services offered by consulting firms are intangible. Clients and consultants must have real-time access to their project data and share the right level of information. It also helps improving Resource planning, for a better overall employee utilization.

  • 2) Employee mobility: During a project, managers may have to work from abroad or expand the project overseas. It’s important for him to know who is available and ready accessible from anywhere to better run the project. It avoids delays and hiring costs.

  • 3) An integrated cloud system: One database shared by everyone. All the updates are happening in real-time, and consulting firms can use this to control the performance of their projects and anticipate their ROI.

  • 4) Talent acquisition: The industry is experiencing a talent shortage. The unemployment in tech talent is below 1.5%, making it challenging to hire talents. But using modern ERPs will help deploy the best hiring strategies. An ERP for a consulting firm can let you know what will be the skills that you will lack at different horizons and what are the trends in term of skills required by clients. With this information in hand, hiring managers can better anticipate and build a competitive advantage, as they provide the best resources to answer their clients problems.

Why should consulting firms choose to switch to a cloud-based ERP solution?

At this stage it is important to chose between the right ERP: cloud-based or not? Here are the main benefits from a cloud-based solution:

  • 1) Easy implementation: A cloud ERP can be installed and deployed at your company within a few days when on-premise ERPs take months to install. Why is that? The server architecture is entirely hosted outside local servers which avoids spending any time on this matter. Cloud-based ERPs are also designed with limited specific designs which limit the deployment work to choosing between different set up options.

  • 2) Scalability: Another benefit is the possibility to increase the infrastructure requirements as your business grows. It limits the financial risks as you can adjust the number of licences to the number of users at your firm and never risk lacking licences or have too many. When a crisis materializes and the number of employees decreases, reducing the number of licences is also a great way to mitigate risk.

  • 3) Cost-saving: Since the ERP is hosted on cloud servers that belong to the ERP company, there is no need for internal servers purchases, or rolling out an IT team to manage the ERP. Consulting firms pay for the usage and benefit from a dedicated service.

  • 4) Security: During the early stages of cloud ERP, firms were reluctant to use this method as they considered it as insecure. It is now clear that cloud-based architecture is among the safest way to protect data. Service providers such as AWS or Azure have the highest standards in terms of safety and cybersecurity. Data are tripled and saved on a regular basis limiting any risk of loss or theft.

Conclusion:

Cloud ERP is the solution for firms that aim to expand their services rapidly around the world and to use necessary KPIs to achieve them.

A consulting firm using an ERP will save time and effort to understand their processes and receive better information to run the business and improve its performance. With proper implementation, an ERP can be a strategic partner for a consulting firms in achieving long terms goals.

References

Why equip an ERP for consulting firm?
The Specifics of Software for Consulting Firms
How To Accelerate The Growth Of Your Consulting Firm [2020]?
Staffing Issues in Consulting Firms
How ERP in the cloud can benefit management consulting firms

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