IS YOUR CLIENT SERVICE DELIVERY MODEL UP TO DATE?

You've heard about all those great new nontraditional services. Now, how do you make them a real part of your product mix?

By Ralph M. Jeswald, MBA, CPA, D'Alba & Donovan CPAs, P.C.

t seems there's so much written lately about our changing profession. From professional journals to general business magazines, from newly published books to internet web sites, it seems everyone is talking the same language. Nontraditional work such as management consulting services is in. Compliance is, at best, a commodity--so they say. Providing value-added service is the key to maintaining solid client relationships. And then there are the buzzwords, some old and some new--ABC, ABM, TQM, business process reengineering, alignment, knowledge sharing, the new finance, year 2000 issues (often referred to as Y2K).

We realized that our profession had been offering nontraditional, consulting services for years. If clients asked for help with budgeting or cash flow analysis, we did it. Strategic planning? Not a problem. Investment advice? We came through if we happened to be knowledgeable in finance.

But somehow, in this growing industry of professional services, the typical ad-hoc approach to providing nontraditional services that our profession historically practiced did not seem to be enough if we were to remain truly competitive. And our firm did not quite "buy" the bad press that compliance work was typically receiving, despite the fact that management consulting services was one of the fastest growing areas within the service sector of our economy.

We also had to deal with what some might refer to as "standards overload." For example, the AICPA's new Statement on Standards for Consulting Services (SSCS) addressed performance requirements and specific responsibilities that we were required to adhere to when performing consulting engagements.

So the question became, "How could we, as a growing mid-size CPA firm, leverage our collective skill-sets and past experiences? What was our unique advantage? How could we as a firm--without abandoning our profitable traditional services--stop talking about these exciting new opportunities and actually seize them for ourselves?"

Step One: What Business Are You Really In?

We started the process by asking "What business are we really in?" The railroad industry, for example, incorrectly assumed it was only in the business of transporting people, and subsequently lost the competitive advantage in the transportation of goods to the trucking industry.

The accounting profession, as we all know, was born and has historically grown out of the attest function. It has also been accused, at times unfairly, of being a profession of "bean counters" with no strategic vision. (We found we actually were spending a great deal of our time trying to convince the public we were more than CPAs; yet we are still proud of the designation.) Much like a musician, we recognized that we were seeking a perfect blend of science and art. We wanted to balance compliance with the nontraditional to effectively service our client base.

We observed that, in a world changing almost daily through technological advances, knowledge was quickly becoming the distinguishing factor for most businesses. Where once quality and then time were ways a company could gain a competitive edge, today, producing zero-defect, on time products and services are just a requirement to "get on the dance floor."

Converting data into information, information into knowledge, and, finally, knowledge into creative action is a core function of most knowledge-based businesses. This was also a process that we as a firm and as a profession were trained, skilled, and experienced in performing.

Our "new" business model therefore was simply assisting clients in creating knowledge, to be used for creative action in improving the performance of their organizations.

Step Two: Recognize Your Unique Advantage

Organizations progress through a life cycle with three major stages: start-up, growth, and maturation. As business advisors, our profession is generally intimately involved with clients in their most important strategic and tactical decisions as they advance through this business life cycle. We typically know everything about the client's business as well as its personal affairs; not because we are nosy, but because we are expected to be informed. Because of that intimacy, we have a unique advantage over other professional service providers--trust.

And because of that trust, we believed that we had a responsibility to serve as the "hub" or coordinator of most professional services our clients might need.

Step Three: Develop a New Service Delivery Model

It had been our experience, "that which you can't touch or feel is hard to sell." Consulting services, for example, have traditionally been a tough sell, whether it be actually marketing the services to clients or "marketing" project requirements to staff. How much will the service cost? What are the estimated total project hours? Defining the deliverable is often difficult, but it is imperative to do so. How much documentation is necessary? Is there a report required? Should there be supporting workpapers on a particular project?

The answers to these questions were fairly simple for traditional work. For nontraditional services, however, there was much larger gray area.

Organizational performance improvement (OPI) is the model we created to effectively guide, develop, market, and deliver management consulting and other nontraditional services, as well as to support the traditional accounting and tax work we provide for our clients. The framework actually has its origins in the spider-web concept introduced by James Quinn in his book Intelligent Enterprise that develops the virtual organization business structure. As indicated earlier, we assume and welcome the responsibility clients place upon us to serve as the hub of all professional service activity. The services we have outlined within our framework are designed to provide solutions for the many challenges clients face at every point in their life cycle. "Turning over every rock," so to speak, is necessary to ensure the client's every potential need is addressed. Understanding that we do not possess all the core competencies (a.k.a. "toolbox") within our four walls to provide all the solutions that a client may require, we recognize and utilize outsourcing as a key tool in fulfilling our clients' needs.

A toolbox is an associate's collective set of skills, experiences, and knowledge. It represents those tangible and intangible qualities that make the professional unique.

Matching the professional to specific client needs is imperative for successful execution, even if that person is not a member of our firm.

Fortunately, the relatively new AICPA SSCS standards provide general guidelines for providing management consulting services. Our conceptual framework of organizational performance improvement was created with these guidelines in mind so the delivery of nontraditional services would have the same accountability and structure as traditional engagements, without sacrificing creativity. The benefits are enormous: effective proposals, well defined deliverables, consistent and accountable service delivery from project to project, appropriate documentation, efficient work, successful projects, thrilled clients, and, ultimately, profits.

Step Four: Put the Model into Action

In practice, we have found that most organizations we work with are fairly competent at identifying "big picture" objectives and the strategies to support those objectives. Establishing defined action items to actually achieve their goals at the tactical level, however, often proves to be much more difficult. A model without execution would therefore not be sufficient.

Organizational performance improvement supports the niche services we have identified as our firm's "best in the world" capabilities. Where possible, we have attempted to put our own spin on service descriptions and, ultimately, service delivery to differentiate ourselves from other firms offering similar services.

Specifically, in addition to the traditional services of tax and accounting, OPI includes outsourced CFO services, activity based decision making and measurement, operational/strategic alignment, executive mentoring, and administrative process automation applications design and implementation. In addition, our growing web of outsourced consultants (qualified service providers) allows us to provide other services, such as organizational development, human resource management, marketing, and engineering consulting.

In practice, we have found our new client service model, in a way, mirrors the medical profession's. It's certainly relationship driven. A project may start out with a client's general request for outsourced CFO services. Once familiar with the client's day-to-day business activities, we may diagnose other more specialized needs, some of which we can solve with our own collective toolbox, others that we may call upon one or more of our qualified service providers to address. In either case, client need fulfillment is the end goal. The actual service provided is just the means to the end. But the execution of how we deliver our services becomes our competitive edge. Organizational performance improvement has given us that edge.

Clearly the profession is changing. I read recently that the business world has an "open checkbook" for the public accounting profession. As small and mid-size firms, we all can compete quite well. And with the impending mega-mergers, opportunity is abundant.

Identifying and learning about the growing list of new nontraditional services is the starting point in taking advantage of this opportunity. Incorporating those services in a contemporary model that helps guide your service delivery, and, more importantly, implementing that model, are two important keys in moving from concepts to profits. *