Exhibit 13.10 Resource Pool Ranking Chart

professional services organization is affected by a number of factors, making it difficult to estimate precisely at what size automation will become an appropriate option. Therefore, the firm must judge for itself whether the current administration justifies an investment of capital for labor. Here are just three of the many factors that can create complexity:11

1. Number of skill types needed and provided. (A technology company with 50 people that offers help desk, desk-side support, network support, application development, and acquisition management is more complex than a technology company of 75 people that offers only one of the preceding services.)

2. Variety of project contract length.

3. Variety of client types (e.g., financial services, pharmaceuticals, telecommunications).

To get an idea of how these factors might impact an organization, consider the example of a small IT consulting company specializing in help desk support for small financial services companies has a one-year renewable contract relationship. Now the firm adds two more client verticals, two more types of contract terms, and two more service offerings. They have progressed from offering one type of service to one client for a specific period of time to a model where they are selling more than nine possible offering combinations. Add to this a little growth in staff, and the situation can quickly spiral out of manageable control.

Not staying on top of all resource management and business activities can spell doom for the professional services firm. In one instance, a money-losing consulting division was further wrecked by increasing complexity. The firm found that 50 percent of the billable consultants were engaged in nonbillable and under-the-radar back office projects.

An inventory of activities in which underutilized, otherwise billable resources generally engage when they are off a billable project and below any radar follows:

Monitoring processes that could be cheaply automated, thus removing

the need for monitoring Doing research for other team members who are not fully utilized

themselves

Running reports of questionable value that few, if any, ever read (this one is a favorite)

Conducting internally focused surveys and queries that do not lead anywhere

Working on low-return/questionable return in-house projects

In many cases, these resources feel vulnerable and will not come to managers asking for more billable work. In other cases, they lack only one or two vital skills that would make them suitable for any of the current billable projects. Again, however, feeling vulnerable, they are unlikely to bring this to the attention of their manager voluntarily. The solution to this situation is for managers to maintain and manage according to a global view of the various activities within their organizations.

To help managers address this challenge, many organizations turn to software solutions, which substitute systems and capital for labor and are appropriate for mid-to-large sized firms. Enterprise service automation (ESA) solutions, as this family of application software is called, brings to service organizations benefits similar to those that enterprise resource planning (ERP) tools give to the manufacturing and distribution industries. Software tools can help professional services organizations to better manage things such as planning, scheduling, managing billable resource utilization across multiple projects, salesforce coordination, customer relationship management, performance management, and communications. In addition, some software tools can automate the processes of collecting professional staff billing information and carry it all the way through the generation of billing and invoicing clients.

ESA Options

Because the professional service firm market is so large, it is not surprising that more than 30 software vendors, including major players such as Icarian, PeopleSoft, and SAP, as well as a number of newcomers, including Augeo Software, ChangePoint Corp., Opus360 Corp., and PlanView, now offer software tools to the professional services industry. These tools vary in their capabilities. Some are able to handle end-to-end operations, while others focus on specific segments such as resource management across projects.

A number of professional services organizations will, from time to time, opt to build their own software tools. A number of these custom application are used by firms to automate timecard information collection, billing and utilization, and other important processes. While these tools tend to have a good fit to the business because they have been specifically built for the firm, they can often have a less than stellar performance over the long-haul because they are expensive to maintain, and lack the scalability to effectively evolve with the needs of a growing business. The bottom line is that companies that opt to build tools for themselves often end up paying many hidden and unforeseen costs in the form of operational expenses, maintenance expenses, and, ultimately, the expense of rebuilding to keep up with the growth and evolving requirements of their business.

Averbook is quick to point out that, on the other hand, companies that buy from vendors such as his firm, PeopleSoft, are avoiding these hassles and getting more than just task automation. In addition to automation, buyers are