Q&A with Chris Harvey on Better Back-Office Management

Chris Harvey, Country Leader of XpertiseNow Hong Kong, speaks to us about the back-office challenges that specialist consultancies commonly face and how XpertiseNow can help them.

Q: What are the problems that have been faced by consultancies you have spoken to?

A: What I think most of us forget, or don’t really realize is the big consulting firm throws a very warm blanket around you when you’re in a big organization. There are lots of back-office staff. There are lots of back-office systems. There is lots of support for you, when you are going out into the market, developing business, delivering business, developing the market, etc. When you move to the exciting world of the start-up, the boutique, or the specialist consulting firm, you suddenly realize that all of that no longer exists, and you must create that. Theoretically, it’s not that difficult to create. In practice, what it means is that senior founders, the people who have the real content, which is what you’re selling as a specialist consulting firm, are diverted into back-office activities.  

That effectively takes them out of the market, or they spend nights and weekends doing it, which is not ideal. A lot of the firms I’ve spoken to say that if you really cost it, between 10% to 25% of the overall cost of running one of these businesses can be in the back office. So, it’s costly and it takes away the time of the senior people who should be out in the market, developing business or delivering business. 

Normally, these back-office tasks tend to be inefficient because it tends to be a bit cobbled together. Therefore, the issue is making this more efficient, and how to manage the cost of running the back office that is the engine that drives the rest of the business.

Q: What are the pieces of the back office that specialist consultancies are looking to do more cost-efficiently? 

A: I would classify them in three areas. Number one I would call strategic business management, which is: how do I as the founder or the leadership team of a small firm establish what our strategy should be? Using data rather than gut feel? How do I set in place a planning processes to take us forward as a business? And how do I measure financial and other performance against that strategy?  

Then there’s what I would call engagement management, you might call it “from proposal to accounting.” This would be taking in the construction of a proposal, the pricing of that proposal, the contracting with the end clients, all the compliance that is needed around ESG and diversity, as well as all the requirements of a master services agreement all the requirements that these large firms have through their procurement channels. There is invoicing, billing, payments, and then that all needs to filter through to the accounting engine that helps you to run the business. Broad end-to-end engagement management, which has got nothing to do with the content of what you’re delivering, but is vitally important in terms of ensuring that your business makes money and that you deliver properly to the client.  

The final piece I would call broadly practice management, which is things like accounting tax, financial performance, audit compliance issues, people, management, people deployments, down the IT infrastructure that you that you want to put in place to your business.