Boost Profitability: Workforce-Driven Revenue Modeling in Professional Services
Integrated workforce planning and agile revenue modeling are essential to success in the professional services industry. For FP&A professionals working in this sector, having a comprehensive and flexible planning solution is critical. Workday Adaptive Planning offers an impressive range of capabilities to streamline workforce planning and revenue modeling, enabling organizations to meet demand for their services while maximizing profitability. Here’s an overview of how Kainos and Workday Adaptive Planning can help FP&A teams take this interconnected planning process to the next level.
The Relationship between Workforce Planning and Revenue Modeling
In professional services organizations, the ability to generate revenue is directly tied to the capacity and productivity of the workforce. Revenue modeling involves forecasting future revenue based on variables like billable hours, project scope, pricing, and client demand. Workforce planning ensures that the organization has the right number of people with the right skills at the right time to meet that projected demand.
The Challenge of Workforce Planning and Revenue Modeling
Workforce Planning and Revenue Modeling is necessarily a dynamic and continuous process; yet many organizations are using siloed tools, such as spreadsheets, which make updating models a time-consuming chore. This static and error-prone process often results in inaccurate plans that can’t keep pace with evolving demand for projects and services.
Customizable Dashboards for Instant Insights
The dashboard in Workday Adaptive Planning serves as the starting point for most users. It provides a fully configurable view where key charts, graphs, and metrics are displayed. It also serves as an active workspace, where changes and updates can be made. Whether your focus is on workforce planning, revenue modeling, or any other planning activity, the dashboard can be tailored to meet the needs of each user. In professional services, where tracking project performance and financial health is crucial, these dashboards offer real-time insights at a glance.
Workforce Planning with Direct Labor Models
One of the most valuable features for professional services organizations is the ability to model the workforce in detail. Using a Direct Labor Sheet, users can break down workforce costs by employee, project, and task. For each project, detailed information such as start dates, salaries, billable hours, and rates can be entered, allowing you to calculate the projected workforce costs for each engagement.
Understanding projected workforce costs compared to actual costs can be used for continuously fine-tuning upcoming (future) projects when in the proposal stage. This is an area where FP&A can function as a partner to sales by helping them craft more accurately scoped, resourced and priced projects.
The ability to incorporate personnel assumptions (such as tax rates, benefits, and even new hire capital expenses) means that FP&A teams can plan for future workforce needs with a high degree of accuracy. The labor assumptions are pre-configured, saving your team time, and can be customized to reflect specific requirements for your organization.
Revenue Modeling: Projecting and Adjusting in Real Time
Revenue modeling for professional services organizations often requires flexibility due to changing project scopes, billing rates, and timelines. Workday Adaptive Planning enables you to create revenue models that are fully interconnected with the balance sheet, P&L, and cash flow statement. This means that any approved changes to revenue models are instantly reflected across the entire financial plan, ensuring alignment between revenue forecasts and operational realities.
Additionally, new scenarios can easily be spun off for "what-if" analysis. This feature is particularly useful when considering the financial impact of new projects or changes in existing contracts. Once a new scenario is created, it can be compared side-by-side with your current budget, enabling you to make more informed decisions.
Versioning and Flexibility
Workday Adaptive Planning allows FP&A teams to create as many versions of a financial plan as needed, each with unique time settings, security configurations, and specific scenarios. This is a significant benefit for professional services companies that require frequent adjustments to forecasts based on evolving client needs and project timelines.
For example, rolling forecasts and long-term planning are easily supported, allowing organizations to extend their financial outlook as far as necessary. Once a specific budget or forecast version is finalized, it can be locked down, preventing further changes. Conversely, users can model out their own "what-if" scenarios without impacting the primary plan.
Organizational Hierarchy and Levels
In Workday Adaptive Planning, the concept of “levels” represents your organizational hierarchy. For FP&A teams, this provides a clear structure to track financial performance by business unit, department, or even individual projects. This is particularly helpful in multi-entity organizations or those with complex project portfolios.
For instance, you can plan at a project level and have that data automatically roll up to higher levels such as departments, regions, or the entire organization. This enables bottoms-up budgeting, ensuring that data from across the organization is consolidated in real time without the need for endless spreadsheets.
Seamless Integration with Data Sources
Workday Adaptive Planning integrates easily with other enterprise systems, such as general ledgers (GLs), human capital management (HCM), time-tracking software, and payroll systems. For professional services organizations, integration is crucial for accurate financial planning and forecasting.
Data can be imported into Workday Adaptive Planning through direct integrations or manual imports. The choice between these two methods often depends on the frequency of data updates. For recurring data such as time-tracking and payroll, direct integration ensures that data is automatically refreshed without manual intervention, saving time and reducing errors.
Automating Reporting with OfficeConnect
Another key feature that saves time and effort is OfficeConnect, which integrates Workday Adaptive Planning with Excel, Word, and PowerPoint. This allows you to automate the creation of board reports, management decks, and other standardized reporting packages. The dynamic connection between Workday Adaptive Planning and OfficeConnect means that any updates to your financial models are automatically reflected in your reporting documents.
For example, when new actuals are imported into Workday Adaptive Planning, a simple refresh in OfficeConnect will update all related tables, charts, and text in your reports. This automation eliminates the tedious process of manually updating reports, freeing up time for more strategic analysis.
Workday Adaptive Planning and Kainos: The Ideal Solution and Deployment Partner for Professional Services
Workday Adaptive Planning empowers FP&A teams in professional services organizations to enhance both workforce planning and revenue modeling with its flexible, integrated, and automation-driven platform. This agile solution enables firms to streamline reporting, gain deeper financial insights, and drive efficiency across their operations.
However, unlocking the full potential of Workday Adaptive Planning requires the right deployment partner—and that’s where Kainos comes in. As a trusted Workday partner and 6-time Global Partner of the Year, Kainos guides your team through every step of the deployment. With Kainos and Workday Adaptive Planning, you’ll be equipped to achieve better business outcomes and thrive in a fast-paced professional services market.
If you would like to explore how integrated workforce planning and revenue modeling can boost profitability in your organization, request a meeting with the experts at Kainos.