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"The
SAP for Professional Services solution portfolio provides project-based services firms with solutions, applications, and services to support
talent supply chain management."
Source : SAP
Talent Supply Chain Management: An Alarming Look At The Mismatch Between Talent Strategies, Processes, and Corporate Objectives
Talent Supply Chain Management is also known as:
talent supply chain management,
talent supply chain,
talent management,
talent supply chain solutions,
strategic talent management,
supply chain issues,
supply chain talent management,
effective supply chains,
leveraging talent supply chain,
talent supply chain for a competitive advantage ,
stocking your supply chain management,
applying supply chain management to people,
applying supply chain management,
supply chain management software solutions,
supply chain management research and solutions,
talent supply,
talent inventory,
talent supply and talent inventory.
Talent Supply Chain Management
Executive Summary
CRITICAL TALENT STRATEGIES OF PROFESSIONAL SERVICE FIRMS PUT IN PERSPECTIVE
A recent independent survey of over 250 professional services firms has
uncovered the impact of these realities on the service-oriented firm. These
findings highlight significant disconnects between the ultimate desired
operational state of the services firm and their current ability to execute to
achieve that state. These findings clearly illustrate a trend in the services
industry that includes:
- The achievement of acceptable processes and automation of tactical
resource planning/management has resulted in a shift towards considering the
strategic impact of the manner in which the talent inventory is managed.
- Aggressive prioritization of service line profitability in order to
ensure the acquisition, development, retention, and integration of talent
pools drives firm success.
- Active search for areas of possible improvement over the management of
the talent inventory that will positively impact the firm's ability to
improve service-line profitability while decrease operational inefficiencies.
The nature of these trends seems to suggest that service firms are beginning
to identify a need to treat the talent inventory with
supply chain-like discipline, but are poorly prepared to optimize day-to-day
operations of the talent inventory that would permit a true talent supply chain.
The survey indicates that professional services firms must evaluate their
business processes, project outcomes, and internal systems to identify gaps that
preclude them from better integrating talent strategies with service line
objectives. By asserting greater control over internal resources and procedures,
while measuring and sustaining customer satisfaction levels and enhancing their
talent pool in order to anticipate and meet future demands, the typical service
firm can expect to:
- Enhance revenues by improving delivery performance and speeding client
response
- Improve talent productivity at lower costs
- Fine-tune forecasting precision and shorten planning cycles
- Optimally leverage suppliers for greater service and better pricing
- Improve service quality and produce more technologically advanced
service lines for better client value
- Enhance internal communications, collaboration, and processes for
greater employee satisfaction
- Produce more reliable financial information
- Better leverage traditional marketing tactics, in order to drive market
demand for most profitable service line offerings
These survey findings will identify the industry-reshaping challenges that
are compelling innovative professional services firms to improve the return on
their investments in talent with a holistic, end-to-end, optimized process. In
addition, this survey highlights the outdated, internal processes professional
services firms must modernize to make the most of their talent resources and
grow their profits.
Key Finding
RISK EXPOSURE FROM POOR TALENT INVENTORY MANAGEMENT
75% of respondents cite lost revenue and poor customer satisfaction ratings
as the greatest potential risk resulting from inefficient talent inventory
management.
Key Finding
Core to the business model of the service firm, talent strategies are
understood to provide the most inherent value to the firm's reputation and
growth.
Professional Services Firm Talent Prioritization
TOP TALENT PRIORITIES
50% of respondents identify recruiting, training, and retention as their most
important talent management priorities.
KEY FINDING:
The investment in the maturation of core resource management
tactics has led to a greater need and desire to improve upon every process
critical to developing and maintaining the talent inventory.
Performance Metric Prioritization
CURRENT TALENT INVENTORY STRATEGIES DEVELOPED IN THE REARVIEW MIRROR
60% of respondents underscore the importance of performance analysis and
trends across similar service lines. Surprisingly, only 20% of respondents are
utilizing service line profitability as a key input into current talent
management processes.
Most Important Performance Metric
Inputs Utilized in Talent Inventory Strategies
KEY FINDING:
Contributing factors to established talent strategies are
failing to consider the development and profitability of specific service lines.
This could lead to diminishing value of current service lines and failure to
identify and capitalize on new and differentiating service lines.
Business Process Ranking
MOST SIGNIFICANT PROCESS TO TALENT MANAGEMENT STRATEGY
51% of respondents identify recruitment, training, and retention as the most
critical processes in the development and deployment of talent management
strategies.
The Failure to Analyze Service Line Profitability ' Compounded
KEY FINDING:
The risk of failing to properly consider service line
profitability in the development of talent inventory strategies is compounded
when considering the key processes that are used the most during talent strategy
execution. Utilizing only historical performance to recruit, train, and retain
key personnel could result in a talent pool that is unable to deliver new
service offerings
Defined and Integrated Processes
RESPONDENTS RANK THEIR CURRENT TALENT MANAGEMENT PROCESSES
78% of respondents report rudimentary or standard defined processes in place
to manage critical talent. 80% of respondents report little or no integration of
human capital management, business development, and resource management.
How Advanced Are Current Talent Management Processes?
Level of Business Development, HR, and Resource Management Integration
KEY FINDING:
Current standard processes and related integration lags
behind most firms' goal of improving the efficiency with which the talent
inventory is managed (percentage chart) and leveraged to support fundamental
business strategies (pie chart). Firms that are successful in calculating both
historical performance together with desired direction do not have processes nor
systems in place to grow
On-Board Periods Examined
FRONT-END TALENT SUPPLY CHAIN INVESTMENTS SHOULD YIELD IMMEDIATE RESULTS
68% of respondents report open headcount fulfillment completed in 4 to 12
weeks ' the industry standard. This does not account for a typical on-boarding
period of up to 16 weeks
Average Time to Fill Open Headcount
KEY FINDING:
An investment in the efficiency of the front end of the
talent inventory process will provide the firm with the ability to quickly
develop key billable resources, while serving to establish a foundation for
further improvement and development of the talent supply chain. The industry can
expect to witness a drive for firms to improve their acquisition rates
Conclusions
PROPER TALENT MANAGEMENT DRIVES PERFORMANCE
- While manufacturing companies have invested millions in more efficient
processes and technologies to optimize their supply chain, the professional
services industry has been slow to apply a fully optimized supply chain
management process. 80% of respondents from the survey indicated that the
processes they use now for business development, resource management, and HR
management were only somewhat or not at all integrated.
- There is sorely limited advanced planning in the professional services
industry overall. Inefficient staffing decisions prevail, prompting the
unnecessary use of third-party contractors. More than half of the survey
respondents identified squandered revenue opportunities and a decrease in
client satisfaction as the key problems associated with improperly
forecasting client demand based on available skill sets.
- Most firms realize that optimizing talent management is crucial. 68% of
surveyed firms acknowledged that, when taken together, core talent
management ' including retention, recruitment, training, and knowledge
management ' outshine performance and compensation when it comes to staff
development. These results crystallize the importance of these tasks to a
firm's success. However, in a surprising disconnect, 85% rated their talent
management and staff development programs as standard, rudimentary, or, even
worse, nonexistent. In short, services firms are not satisfied with the
current processes critical to their success. There is a significant
opportunity for services firms to improve these talent management areas '
and reap the benefits of doing so.
- Professional services firms must address a wide range of operational,
organizational, and planning challenges if they are going to optimize their
talent and improve profit enhancing performance. These vary from offer
development and supplier management to retaining the best and brightest,
planning resources effectively, and increasing visibility in the sales
pipeline.
- To improve operations that impact profits, professional services firms
must also hack through three thorny market thickets: globalization, the
focus on individuals over the brand, and client sophistication. To do so
requires that professional services firms think in terms of a holistic,
talent supply chain management environment. To extend market reach and
improve the bottom line, these firms need to look at the whole talent supply
chain, ensuring that they are retaining the talent needed ' and optimizing
their own talent reserves ' to meet ever-increasing client demands for
quality, delivery, and speed.
Study Methodology
SURVEY METHODOLOGY
At the end of 2006, SAP directed an independent research organization to
conduct a trend survey, and received responses from over 250 professional
service organizations.
- C-Level and senior officers made up about 3/4 of all responses (72%),
followed by VP and directors seniority groups, (20% and 6%, respectively).
- Information technology firms accounted for the majority of respondents
(44%), which implies this audience was highly engaged in the topic of the
survey '
Consulting had the second highest number of responses (38%).
- Respondents were asked 15 questions regarding the challenges they face
in the Talent Management industry.
Breakdown of Professional Services Trend Survey Responders
Respondents by Talent Management Sector
Respondents by Title
Table of Contents
- EXECUTIVE SUMMARY
- KEY FINDINGS
- CONCLUSIONS
- STUDY METHODOLOGY