Notes

Business Growth - AFAB Is really a Four-Letter Word, So Say Focus Instead
AFAB (A-fab) noun:

1) a sale of "anything for a buck" in order to generate revenue and keep billable employees busy

2) a small business situation which can impede company growth, differentiation and/or profits

3) in more mature firms, a symptom of lack of focus on specific service or product offerings

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However you define it, AFAB (anything for a buck) is really a condition, which typically impacts a business at some point or points in its life cycle. It is vital to recognize when your firm is experiencing AFAB so that you can take corrective actions. Failure to do so will impact your firm through lower gross margins, increased opportunity costs, and insufficient brand and services differentiation. Better still, learn the indicators (e.g., flat revenue growth or always needing different skills to staff projects) in order to avoid the condition whenever you can.

The remainder of the article addresses business growth and where AFAB may appear, AFAB's causes, symptoms and treatment, and the huge benefits from minimizing AFAB in your firm.

Business Growth and Maturity

The growth cycle of an IT professional services firm encompasses four phases. Many firms never experience the full cycle, which does not say they are not successful. It just means they probably did not reach their full potential. Also, it is possible a firm can jump in to the marketplace with a distinctive offering and rocket through the growth cycle. This example would clearly be an exception.

The four phases of growth generally occur in the next sequence:

1) Business Initiation

In this phase the business is just starting out either from scratch with some type of business plan or seeded by one or two initial accounts you have already presold. Attention is given to marketing and sales activities and quality of project delivery. Scope of services is founded on what your team knows best, but to continue to drive revenue you sell what you rationalize it is possible to deliver, even when you have to use third party contractors.

This is the most typical scenario for AFAB. You can easily justify, and it can help you generate revenue to fund the business. On the upside, you might begin to develop some long-term client relationships. On the downside, you have trouble differentiating yourself, since it is hard to define everything you do in terms other than the breadth of technologies you utilize. To prospective clients, you appear to be everyone else. Furthermore, you typically undervalue your services using the price you can command.

2) Practice Development

At this point you recognize that there are a few patterns to your technology work. You have specific focus on certain vendors and their products, which means you decide to increase the firm's depth of experience in these few key technologies. Practice managers are assigned to lead the development of solutions, the management of people within their practices, development of partnerships (e.g., product vendors and training companies), and ultimately the profitability of the practices themselves.

It is during this phase that the firm starts to become known for its technical expertise. Most, or even all, of the business's work is done in the neighborhood market. Your technical expertise begins to narrow down your competition some, but differentiating the firm is still quite difficult.

3) Business Expansion

This phase is characterized by growth into business solutions and/or geographic expansion. Just as check here recognized technical specialization in the last phase, your firm now has a pattern of performance in industries (i.e., verticals) and business functions (e.g., sales, recruiting, etc.). The intersection of a technology and something or both these other areas enables you to focus in on specific business solutions. For each one you assign a practice manager as you did for the technology practices.

These business solutions commence to supply the firm real differentiation. You narrow the field of competition down significantly and will commence to command higher fees for the task you deliver. Furthermore, as you master these more unique offerings in the neighborhood market and so are recognized for the expertise, you are afforded the opportunity to take them to regional and national markets, especially those you view to be underserved.

4) Continuous Improvement

Your business is growing, profitable, differentiated and known in the marketplace. The competition is aiming for you. It is advisable to constantly re-evaluate all aspects of your business from service offerings to marketing and sales to delivery to operations. Typically, both biggest areas requiring focus are adjusting your offerings to meet market needs and improving efficiency in delivery and support services.

It is a time when you're able to more confidently introduce new methods to provide offerings to your existing and target clients such as for example managed services (e.g., application support or network infrastructure) and SaaS (i.e., software as something).

AFAB is prevalent in the initial phase, Business Initiation. It can also occur in another phases co-existing with specific practices or business solutions. In some circumstances, AFAB can be justified on a temporary basis. For instance, if your firm is exclusively projects-based and you are experiencing the problem of the "roller-coaster" sales effect, you then might need to take action to boost utilization by accepting work beyond your normal scope. In cases like this, keeping a constant eye on resource allocation is essential as a way to minimize enough time AFAB is prevalent.

Causes of AFAB

There are lots of reasons AFAB can surface in your organization.

Being in the Business Initiation phase of one's firm's life cycle (where AFAB is really a normal occurrence)
Not defining your scope of services and just let's assume that over time it will define itself
Lack of attention to business planning and analysis of results - you're busy working in the business and unable to dedicate the time essential to work on the business
Unassigned billable consultants on the bench
Relatively lean sales pipeline
Having a good management team, but lacking someone with the knowledge to proactively manage your services portfolio
Symptoms

The warning signs of AFAB are numerous. The issue is having controls set up to recognize them as quickly as possible. On the list of symptoms are:

Revenues are flat or are growing at a decreasing rate over time
Each project you sell is a one-off (i.e., unique where you have not done the task before) or is another variation of prior work - there's little repeatability in delivery
You never seem to have the right staff to fill the available project roles
Gross margins are flat or decreasing due to increasing cost of delivery - you are using more third party consultants at a higher than budgeted cost
Sales cycles remain relatively long and key opportunities are bunched together under the same sales stage or two
Qualified lead generation is inconsistent (e.g., limited marketing activity) signaling another roller coaster wave in the sales cycle
Treatment

Eliminating AFAB and avoiding future business plateaus require diagnosis of the problem, treatment and preventative measures designed along three concepts:

1. Focus

Review historical information on projects (i.e., numbers and revenue) to recognize patterns of technologies used, industries served, and business functions and issues addressed
Review historical client information (i.e., numbers, revenue, industries, company size, buyers, issues, length of time as a client, etc.) to identify an ideal target account profile
Factor in current sales pipeline activity and understanding of other areas (e.g., pending changes in technology, potential marketplace changes, etc.)
Refine your services portfolio to include the offerings that best support the direction you set for the business
Identify and assign practice managers to lead each area in further development of solutions, management of these consulting teams, development of partnerships, sales support, service delivery, client relationship management, and producing favorable financial results
As elementary since it sounds, it is surprising how many IT services firms usually do not perform an analysis of these projects and clients to ascertain this important information.

2. Alignment

Assure that the company management team is in sync on the direction of the business enterprise and decisions made around your services portfolio
Provide clear definition of goals and objectives to the business enterprise areas that may support the practices, especially marketing and recruiting
Communicate the newly refined business strategy internally, then to industry when ready
3. Metrics

Improve your monthly performance dashboard to add indicators of a potential AFAB situation (e.g., growing usage of third party contractors)
Manage the sales pipeline to note the ebb and flow in new leads, delays to summarize opportunities, etc.
Develop performance reporting for every practice to improve the manager's capability to run his/her business
Each of these three areas (i.e., focus, alignment and metrics) requires ongoing attention within leadership's responsibility within the business.

Great things about Minimizing AFAB

While AFAB includes a place in the Business Initiation phase of a company's life cycle and may be justified at other times on a temporary basis, you need to develop the discipline to control AFAB to the very least, which means understanding how to say "no", a distressing move to make. The potential benefits of preventing or limiting AFAB by developing solutions addressing specific industries, business functions and technologies in your firm include:

Enhanced differentiation of your service offerings
Greater opportunity to work with client executives once you sell business-oriented solutions
Increased repeatability of projects and work components
More efficient projects, thus lower costs of delivery
Reduced risk on projects
Better pricing opportunities based on differentiation
Increased revenues
Improved gross margins
Better on-boarding of new consultants
These benefits are real , nor require significant incremental investment in your organization.

Do you have problems with AFAB?

Jay has over 30 years of management, business, & information technology consulting experience. He has enabled successful change in a lot more than 140 clients taking advantage of growth opportunities in service offerings, sales & marketing, operations, and mergers & acquisitions. As a former partner at Accenture, Jay has worked in both large & small IT services environments. His experience crosses several industries with a special concentrate on services companies & healthcare.

From a leadership and management perspective, Jay has:

* Built and led national, regional & local IT consulting practices of $5M-$95M in revenue.
* Led the stabilization & turn-around of two local IT consulting practices.
* Planned & built strategic vendor alliances & major account programs.
* Formulated & implemented growth approaches for over 20 companies.
* Served as interim CIO, interim CFO & interim CAO for three clients.

Currently, Jay is CEO and Consultant at Crescent Solutions LLC, a management consultancy concentrating on growth strategy initiatives. He computes of Houston, TX. [email protected]
My Website: https://espaipriorat.org/ig-markets-review/