Info & Data Quick Read For Execs in Services Industries

I wanted to do this News Flash as a short read, but highlighting some of the best parts of things I have read in the past month or so. Usual disclaimers apply.

The Big 4 are still the benchmark for Services revenue growth (even though its not a perfect benchmark)

Deloitte - from $41.25bn in 2017 to $46.2bn in 2019

KPMG - from 28.5bn in 2017 to $29.75 in 2019

EY - from $29.8bn in 2017 to $36.4bn in 2019

PwC - from 40.2bn in 2017 to $42.4bn in 2019

However the approx 12% growth over 2 years does match what many are saying, so maybe its a good model at a high level.

I am looking at the 2019 IT Services Market Spend and waiting on reports about that, which I will include in the next one of these.

By the time you read this, we will be in the New Normal, and you may be looking at the internal processes to plan for efficiency gains (or even a digital transformation).

Here is a link to a Q2C Process Map in PDF that you can download. Email me if you would like the Visio version (sorry the site will not hold it so have to email).

Following the exposure of the widespread sexual-abuse allegations against Harvey Weinstein in early October 2017, a number of surveys were done. The most interesting data points came out in mid 2018 (1) where 22% or men and 44% of Women believed that men would be now more likely to exclude women from social interactions (such as after work drinks) and (2) 33% of men said they would be less likely to have one to one meetings with female colleagues. More data from 2019 came out, such as (3) 19% of men said they would be reluctant to hire an attractive woman for a role and (4) 21% said they would be reluctant to hire a woman for a job that required close personal interactions with men (such as ones requiring co-travel).

I am 100% positive that anyone reading this is neither racist or sexist, the nature of the people I write for, and the industry we are in, is that we all judge people on their individual merits. I only raise these points as we should at least consider how others may act within the organisation. If these #MeToo stats are realised into actuality, and should the similar ones come as a result of #BLM, then #Diversity is at risk.

An interesting study on how Customer Choice showed up recently and showed a 19% greater acceptance when customers were told what the people they were buying from were paid, over what the turnover of the supply organisation was.

When sending a CV of a Solutions Architect to a client (or their LinkedIn profile) is useful, the salery exposure inspires more confidence than the history, especially when they are overlayed. I think its an interesting question, especially when differentiation is key in a sale.

In the past 20 years, the average earning of a CTO at a Global Organisation has gone up an average of 135%. That is striking when you see that the CFO in the same group has only had their package go up about 36%.

The other interesting point from a different survey was that 60% of corporates have a CTO succession plan, but only 29% say they have suitable internal candidates.

Data points from a bunch of different reports on Services that came out

• 29% being paid for all their Change Requests on Projects
• 42% where resources only work on one project at a time
• 41% spend over 200 man hours compiling reports per month
• 43% of Services Leaders have had to make decisions before reports are available that later had to change that decision
• 47% are able to support future hire planning with demand data as part of a recruitment business case

COO's : Just under 20% believe that they will have a fully integrated Quote to Cash digital backbone in place within 5 years

Back-casting is the process where the organisation works backwards in tie from a future point and position to determine what in the present caused that eventuality. The reasoning behind the classification as back-casting (instead of forecasting) is that the current business environment is more constrained, but also more predictable than what we had a year ago. As such, strategists (who know what better not to do than what to do) are better equipped to map a course, based on more attainable and reachable group knowledge. I have read a few bits that pointed to this, but it was a HBR article that summarised it best and made the most sense of the concept at play.

A few bits came out in the reading list, this one is just a summary of the points I read

• Commoditised Services management - doing low margin, high volume work
• Developing the correct skills and knowledge pool
• Managing the growing number of stakeholders who seek greater volumes of data on operations
• Managing highly bespoke services for key clients
• Greater complexity in managing and delivering projects - this one rated twice as high as any of the other 4 on this list

All of these are covered in this downloadable report

I read a report on this which concluded all the following

• 90%+ of CEO's believe risks arround regulatory reporting will impact them in some way in the next 5 years
• One third of CEO's say they have Compliance projects in flight
• Almost half of CFO's don't believe their HR Data is GDPR compliant
• The rule that a company has to publish that it has had a data breach within 72 hours is the largest of concerns
• Average cost of Compliance per employee is just €20 per year

In terms of Revenue

• Smaller firms only manage 3 types of RevRec variations
• Large firms have 10 on average
• Enterprise firms have 15 on average
• Almost 94% of the conversations between Services & Finance contain some consideration on Revenue Recognition

As highlighted in several statistics, the issue of getting paid for all your CR's and PM's giving away free hours is a cross industry issue. It not only hits the bottom line, but also hits the delivery professionals whose time and skill has been devalued.

An interesting bit of research I read stated an obvious fact, angry customers get less given away than merely disappointed ones. While its typical for a client to believe that the angrier they get, the more compensation/free hours they will receive, this does not hold true and they get the push back we would expect PM's to give. However, there is a vast set of differences when a client represents themselves as disappointed and a PM has to make a call on whether to give away the resolution.

This is again where the natural logic of the situation does not hold true

When the power between the parties is on the client side (customer may cancel) then the compensation hours is actually lower then when the power is equal (both can cancel) and the one where the biggest giveaways happen is when the power is all on the vendor side (customer can't/won't cancel).

I only ever see high level statistics about % of hours/CR's give away, but I guess it would be interesting for any service leader to have a look across the 3 power distance categories (client/equal/vendor) to see what the internal experience is. If the research is true, mindsets tend to be the easiest things to fix with coaching and mentoring. And if you have ever done such research internally, I would love to hear about it?

Based on some of the best and robust Digital Transformation initiation structures out there, this is what it looks like for a Services leader trying to drive process improvement across a complex organisation, where that Executive does not have full ownership of all parts of the process.

Why the Elephant theme: An item I read that is unrelated to Services is that about 60% of the forest elephants that were alive in 2002 have since been killed, even though the average lifespan is 60 years.

My diary is open here or you can email me as [email protected] if you are free for a chat, I would appreciate an opportunity to discuss any of the above with you.