effectively. Chapters 4 and 5 address the issues surrounding business development in more detail and are dedicated to the sales process.

Business Pipeline. A business pipeline is the collection of future opportunities that are in various stages of the sales process. In many cases, these can be tracked with nothing more sophisticated than a simple spreadsheet that lists:

Prospective client name

Opportunity type (e.g., network security implementation) Expected revenue

Probability of closing, based on current status of the sales process

(more on this follows) Estimated engagement start date

The name of the person leading the pursuit team (may be the sales rep or partner, depending on how the sales area is organized within the firm).

In assigning a probability of closing, set up a standard set of metrics that is clearly defined. For example, you may wish to use the following:

By closely monitoring the progress of business through this pipeline on a regular basis, you can anticipate the need to ramp up or hold your position on resources (Exhibit 13.7).

If the firm is in a business where the flow through the pipeline is relatively slow and predictable, it is easier to schedule the ramping up of resources to coincide with when they are needed. Such a pattern allows the firm to achieve very high utilization rates and to manage toward a just-in-time

Exhibit 13.7 Pipeline Management Chart

ramp-up process. Some business models, however, do not allow for this. There are instances where businesses may operate in an environment where opportunities may suddenly appear with a short potential shelf life requiring rapid sales and delivery execution. If this is the case, the firm may need to finance the cost of maintaining a bench of resources. Here the best course of action is to analyze the cost/benefit of running a reserve resources model by estimating the probability of these opportunities presenting themselves (note whether there are any seasonal or other key influencing factors) and the cost of maintaining the reserve resources bench.

Work Backlog. The firms work backlog is composed of those projects where the client has signed the contract but the assignment has not begun due

to the clients preference (theyve picked a future start date) or your inability to start (e.g., the firm does not have the appropriate resources available). Having a well-managed backlog for the right reasons can be a good thing. On the other hand, having a backlog for the wrong reasons and one that is poorly managed can be detrimental to a professional services organization.

To effectively manage the backlog, regularly review delivery progress relative to commitments to clients. An effective way to do this is another simple spreadsheet that lists:

Client name

Assignment type Expected revenue

Assignment start date Status/action

The name of the person leading the engagement

Make sure that your actions and status are where they should be as you progress through the engagement from the signed contract to the start of execution. This analysis, coupled with your pipeline data, will help you decide how to manage your resource pool. Exhibit 13.8 is an example of a work backlog management tool.

Current Business Portfolio of Contracts. You need to anticipate growth as well as potential erosion in your current book of business so that you can effectively manage your resource pool. By maintaining and documenting valuable communication with your existing clients and reviewing this information periodically, you can minimize, if not altogether avoid, devastating surprises.

Again, an effective way to do this is a simple spreadsheet that lists:

Client name

Assignment type Annual revenue

Assignment end date (more on this follows)

Status/action firm is taking to obtain work extension, more business, or

prepare to disengage The name of the person handling the client relationship

(Note: Some professional services firms may have engagements that are per diem and therefore do not have a stated end of contract date. While these projects do not have a specific end-date, clearly they should be carefully managed as well.)

Exhibit 13.9 is an example of a current business portfolio management tool.

Exhibit 13.8 Work Backlog Management Chart