We at NetSuite have the privilege of working with many global professional services clients. Some came to us with global presence, and some have grown from smaller one-country operations into multinational enterprises. There are many complications to running a global business—language, currency, time zone, culture, etc.—but within services businesses, resource management presents unique challenges that other businesses don’t face.
Services companies are based on people, and people in a global company come from diverse cultures. So the people doing the work are not identical, and this goes beyond just language and skills. Your team will likely have various work schedules depending on local holidays, and this can impact the timing of deliverables. If you have global teams on the same project, these calendar variations can be a big problem. Further complicating global services companies are the reporting requirements that arise when consultants cross borders.
Let me walk through a simple example. You have an office in London and an office in Paris. Nigel from London is on the bench, but he has the skills that match a resource need you have in Paris for a local French client. So you can staff Nigel in Paris, which gives him billable work and saves you from hiring a subcontractor in Paris.
From a staffing perspective, you will have to accommodate the fact that Nigel has bank holidays in the UK that won’t always correspond to the holidays in Paris. So even though you can staff Nigel on the project and avoid hiring a local French subcontractor, you will need to manage through issues with employee and client satisfaction that may arise from holidays. A resource management tool can help you plan and track these different calendars.
The financial issues that arise can be even more complicated. Nigel is paid out of the London office, but he is billing by the hour in Euros in Paris. How much revenue credit should the London office receive for the work done by Nigel? There is no right answer—we have some customers that give London credit for Nigel’s costs, others that give London credit for all of Nigel’s revenue on the French project, and others that split the revenue on various percentages.
Regardless of the revenue split, a resource management tool can give you the correct project profitability reporting and the data you need to do the correct profit & loss reporting for each office. On top of these managerial reporting needs, you need to ensure that you are following the proper accounting requirements for each country. No easy task, but a task made easier with the right tool.
Almost all of our customers face these cross-border issues. Even North American companies run into US/Canada issues quite regularly, and staffing projects with exclusively in-country resources is unlikely to be sustainable.
The best practice is to tackle these cultural and financial challenges head-on, and to learn from other services organizations that regularly deal with cross-border staffing. And of course NetSuite enables you to run your global services organization on a system that embraces these challenges.
-Ed Marshall, General Manager, Professional Vertical
Posted on Mon, November 26, 2012
by NetSuite filed under