At the recent IT@Cork event on “Managing a Service Business for Growth” we heard from two successful Cork based IT@Cork member companies on how they built their businesses.

In a previous post I raised the question on whether service business revenue growth was directly related to employee numbers.

The two speakers at the event, Paul Hourican from PFH Computers and Pat Ryan from Abtran, clearly outlined service business revenue growth on a non-linear scale to employee numbers.

The two businesses have defined their services on the basis that they have:

As they are human, the two speakers outlined where they also learned valuable lessons in:

Tom Raftery posted photos of the event Paul Hourican and Pat Ryan

Do check out the next IT@Cork event on “Business used of RSS”

The insights by both speakers provided lessons for all businesses even if you a custom development services businesses.

A typical belief of a Service Business is that:

Selling Services means Selling Time of relevant Expert Personnel

So, by this belief, to grow a service business’ revenue you need to employ and/or contract more people…

IS THIS WHAT YOU THINK?

Firstly, an event you must attend. I am acting as host at an IT@Cork‘s Sales and Management Forum event “Managing a Service Business for Growth” on Wednesday March 22nd at the NSC. Another high value IT@Cork event where valuable business insights, networking and refreshments are certain.

Paul Hourican, founder and MD of PFH Computers is one the speakers on the night. Paul is one of the early entrepreneurs of the Cork IT Sector and has built a tremendous national IT services business in PFH. Well worth hearing his views….

SO, back to topic.

following the train of though, “to grow a services business’ revenue, we need to hire more people”. As in bespoke software development houses, more staff means greater ability to sell more ‘Units of Time’. For each Unit of time there is a clear margin. Then different level of expertise have different charge rates. For example, within the same project a Senior Business Analyst may charge out at E200 per hour, while a junior developer may be E60 per hour…

Is your business is focussed on solving particular business needs and selling expert time as a solution?

DO YOU use high-level expertise every time?

How Many times, in the past, has your company solved the same business needs in the past?

You know all about re-usable code in software development, whereby when developing a system component/module that is likely to be used in other systems in the future then you’ll develop it in a general manner, parameterised, configurable etc. Then it is reducing future project effort and reducing risk.

NOW, a thought (to be further expanded at a later date)…
If you were asked to provide a service to solve the same problem in 20 different client businesses, would you approach it differently than solving it in 1?

YES, you would. You would stand-back, define an approach, a process of gathering information with review points, decision points and actions. You can then decide on the level of expertise required at each point and whether your high-level expertise need to be at every stage…. This is the basis of Productising a Service.

Copyright ©1996-2008 Donagh Kiernan