How To Keep Your Bench Going Strong

"It helps proliferate demand for our consultants," says Scott McKinney, vice president of business development for the $25 million company, based in Morristown, N.J. "We invest in our engineers to fortify our niche. Clients can take care of mundane stuff, but not many know how to do quality-of-service network design and traffic management."

Like Alliant, many midsize VARs are taking steps to boost employee-utilization rates, realizing that proactive measures ensure productivity. Whether your company is shifting away from a product-only business or has always been built around services and consulting, the results are similar: Salaries of higher-priced employees will quickly drain your profits if all they're doing is warming their seats.

The math is simple: With 2,080 hours per man-year, VAR ownership must make certain the majority of its professional services people are billable at least 70 percent of the time. The rule of thumb is that your pro team needs to bill three times its total cost. Otherwise, they're a liability.

Fortunately, forward-looking solution providers are employing business-planning tactics that can strengthen the odds in their favor. There's no doubt that building staff based on market demand, then migrating to in-demand services, if necessary, is a critical step to keeping your bench utilized.

"The [customers] really need storage assessment, Java programming, clustering architecture. These are the huge sciences that are in demand," says Mike Shook, president and CEO of Cary, N.C.-based Strategic Technologies, a privately held VAR with sales of $100 million. "Do your market due diligence. Find out what your customers need and ask them if they'll buy it from you."

So what's required? After you create the services portfolio you know your customers need, take time to design a comp plan that motivates your sales team to drive their customers to those services. Experts recommend embedding accelerators into their plans that, after they pass minimum hurdles, allow the sales staff to take home a very substantial portion of gross dollars. Don't make the mistake that most solution providers make of holding an aggressive sales staff to a static amount.

You also want to be sure your sales staff knows how to market your deliverables. A salesperson should be able to walk into a room and tell the client, for example, "This task will take two people one month to complete. It will cost you $80,000, and here's what the deliverable is." In other words, it's about enabling your salespeople to tell a coherent story.

Next, and most important, is the quality of professionals you hire to represent your company. You must hire employees wisely, train them thoroughly, and keep them motivated. It's an old saw, but true: A happy worker is a productive worker. And productivity equals profits. Start with cross-training your consultants/professional services staff to make certain they can shift quickly from engagement to engagement without downtime.

Dan Duffy, CEO of Irving, Texas-based ePartners, one of the largest .Net developer organizations in the United States with "north of $60 million in annual sales," believes in training his workers across applications, then making them accountable for their results.

"If a consultant is trained, for example, in Microsoft's Solomon, we cross-train him in Microsoft Great Plains," Duffy says. "The macro wrapper around this is personal accountability for development; we provide the tools and the environment, then [the employee] is responsible for maximizing the training during his work. They tell us how they can use these tools. We instill individual responsibility."

Duffy has also come up with an innovative program called "Development for Dollars" that rewards his app-dev team for keeping themselves busy 120 percent of the time.

"We built a portal that holds and prioritizes intellectual-property work that needs to be done. Our developers can check out a project, like, say, one that calls for making functionality enhancements. It's a separate incentive, [and] it allows us to bring a product to market much, much faster," he explains. "They can bring it home; most would rather bang out code and drink Mountain Dew, then watch TV. And they can make a few extra bucks."

Sanjay Prasad, president and CEO of Global Business, a Mahwah, N.J.-based solution provider with $61 million in annual sales, believes successful employee-utilization rates begin with hiring the right people and then keeping them motivated and productive.

"You have to hire the right person, he says. "Make sure [the applicant] matches the company culture and knows what's expected of him."

Prasad also believes that if an employee doesn't live up to your expectations, you should give him or her a chance at another position. "If they can't excel at one job, it's my job to see what they're good at," he continues, referring to a consultant not making his numbers who, after transferred to a newly formed digital projects division, performed above expectations.

As a last-ditch resort, when there's no outside work to do, create internal projects for consultants that benefit your customer base--perhaps something that could be sold to them at a later date, recommends Dr. Mathias Kirchmer, CEO of IT consulting firm IDS Scheer.

"I try to use our consultants to move the company forward," he says. For example, he has them create "business-process reference models" about specific practices, like the pharmaceutical industry, which can later be sold to the company's clients.

In short, when there's no game for your bench to play, create your own game.