Managing a Software House/Consulting Practice

Purpose

This check list is provided as a mechanism to:

1. Assist in prioritising the areas within the Enterprise which need the most attention.
   
   
2. Provide a check list for performing Due Diligence.
   
   
3. Provide a check list for a first day kick-off.

Values, Ideals, Culture, Vision and Philosophies

1. Make versus Buy
   
   
2. Package versus Bespoke Only versus Package Plus Modifications
   
   
3. Package versus Development, Maintenance and Support Tools
   
   
4. Percentage to be spent on R & D for package
   
   
5. Number of training days per employee per year
   
   
6. Annual Training Budget
   
   
7. Project size
   
   
8. Project duration
   
   
9. Multiple Releases versus Big Bang
   
   
10. Size of Enterprise
    
    
11. Internal Enterprise Politics
    
    
12. Hardware sales versus software sales versus services sales
    
    
13. Representation in physical locations
    
    
14. Loose and/or tight affiliations with other Enterprises (hardware and/or system software subcontractors, vendors and suppliers, distributors, joint ventures, synergy, what's in it for us, etc)
    
    
15. Profit share with employees
    
    
16. Bonus payments to promote Enterprise objectives (Customer Satisfaction, add-on business, on time, within budget, to specification, no/low inventory, sales no/low receivables, commissions, etc)
    
    
17. Inventory holdings
    
    
18. Hiring only the very best people versus a mixture of employee quality
    
    
19. Use of permanent's versus contractors for peak periods (eg, special projects)
    
    
20. Use of Recruitment agencies versus advertising/recruiting direct
    
    
21. Use of contracting agencies versus contracting direct
    
    
22. Hire juniors and grow them
    
    
23. Hardware platforms
    
    
24. System software platforms
    
    
25. Single (large) Client versus diversified portfolio of Clients
    
    
26. Ownership position (outsiders, foreigners)
    
    
27. Enjoying ourselves
    
    
28. Apply for government grants versus going it alone
    
    
29. Reward and recognise employees fairly
    
    
30. Pay scales (1st, 2nd, 3rd or 4th quartile)
    
    
31. A component of Remuneration at risk for all people earning over $80,000
    
    
32. Promote from within
    
    
33. Force employees to take their annual vacations versus letting it accrue
    
    
34. General employee presentation expectations (dress, code of conduct, timeliness, ethics, etc)
    
    
35. Telephone
    
    
36. What are "sacred cows" in the Enterprise?
    
    
37. No software pirating, squeaky clean
    
    
38. Usage of non-approved software on computers
    
    
39. Usage of game software
    
    
40. Generally holding employees accountable
    
    
41. Employees to "own the problem"
    
    
42. Beer bust/jeans day
    
    
43. Internal meetings held out of hours
    
    
44. Travelling performed out of hours
    
    
45. Overtime versus time off in lieu versus expected to work extra hours
    
    
46. Training of contractors
    
    
47. How closeted in back rooms are the technical people
    
    
48. How much interruptions do the development people get
    
    
49. Empowerment
    
    
50. Team approach
    
    
51. Perform a SWOT Analysis

Critical Success Factors (CSF's)

See "Management Consulting - Critical Success Factors (CSF's)" for details.

Key Performance Indicators (KPI's)

See "Key Performance Indicators (KPI's)" for details.

Mission

1. What business are we in
   
   
2. What business are we in... but shouldn't be
   
   
3. What locations are we in
   
   
4. Enterprise Strategy

Goals and Objectives

1. Annual Enterprise Strategy
   
   
2. Clearly defined
   
   
3. Measurable
   
   
4. Growth Rate - Number of Clients
   
   
5. Growth Rate - Revenue
   
   
6. Growth Rate - Ability to handle a number of concurrent projects
   
   
7. Growth Rate - Number of employees
   
   
8. Growth Rate - Market share
   
   
9. Zero Bench

New Business Getting

Also see "New Business Getting".

1. Percentage from referrals
   
   
2. Marketplace definition
   
   
3. Fertile ground
   
   
4. Unique approach
   
   
5. Product differentiation
   
   
6. Marketing versus sales
   
   
7. General marketing strategies
   
   
8. General marketplace perception
   
   
9. Distributors and resellers
   
   
10. Managing the "cowboys"
    
    
11. Independent Sales Proposal audit (Business Assurance)
    
    
12. Independent contract audit
    
    
13. Independent Project Review
    
    
14. Opportunity for competition reduction
    
    
15. Pre-Sales project lifecycle phase duration
    
    
16. Demonstration facilities
    
    
17. Demonstration software
    
    
18. Demonstration room
    
    
19. Demonstration hardware
    
    
20. Demonstration data base of data
    
    
21. When was the last time each Client was contacted?

Methodology

1. Formal Methodology
   
   
2. Project Management
   
   
3. Business Area Analysis
   
   
4. Design
   
   
5. Development
   
   
6. Unit Testing
   
   
7. String Testing
   
   
8. Integration Testing
   
   
9. Acceptance Testing
   
   
10. Rollout
    
    
11. Handover Management
    
    
12. Use of Development, Maintenance and Support Tools
    
    
13. Usage of upper CASE
    
    
14. Usage of lower CASE/4GL
    
    
15. Usage of Object-Oriented Analysis (OOA)
    
    
16. Usage of Object-Oriented Design (OOD)
    
    
17. Usage of Object-Oriented Programming (OOP)
    
    
18. Usage of Client/Server

Management

1. Business management skills
   
   
2. Leadership skills
   
   
3. Technical Skills
   
   
4. Project Management skills
   
   
5. Supervisory management skills
   
   
6. Ability to grow the business
   
   
7. Ability to grow with the business

Employees

1. Recruitment
   
   
2. Induction
   
   
3. Performance Reviews
   
   
4. Career path planning and counselling
   
   
5. Succession Planning
   
   
6. Termination
   
   
7. Effectiveness
   
   
8. Morale
   
   
9. Attitude
   
   
10. Team building
    
    
11. Esprit de corps
    
    
12. Competition between
    
    
13. Quality of product knowledge

Employee Training

1. Personal skills
   
   
2. General Management Skills
   
   
3. Supervision skills
   
   
4. Vocational skills
   
   
5. Product skills
   
   
6. Accounting Skills
   
   
7. People Management skills
   
   
8. Client Management/Service skills
   
   
9. Account Management skills
   
   
10. Technical Skills
    
    
11. Enterprise skills
    
    
12. Project Management skills

Organisation Structure

See Organisation Design

1. Organisation Chart:
   • Management
     
     
   • Administration
     
     
   • Accounts
     
     
   • Marketing
     
     
   • Sales
     
     
   • Client Services/Support/Help Desk
     
     
   • Training
     
     
   • Product Development/R & D
2. Formal and informal lines of communication
   
   
3. Size (number of employees)
   
   
4. Ownership, Stakeholders and interactions between:
   • Formal reporting
     
     
   • Informal reporting
     
     
   • Control
     
     
   • Autonomy
5. Directors
   
   
6. Profit Sharers
   
   
7. Skunk works
   
   
8. Number of hierarchy levels (how flat is the Enterprise)
   
   
9. Span of control of managers

Running The Business

1. Monthly reporting
   
   
2. Board meetings
   
   
3. Budget planning meetings
   
   
4. Enterprise Strategy meetings
   
   
5. New business strategy meetings
   
   
6. Sales Strategy meetings
   
   
7. Employee strategy meetings
   
   
8. Methodology strategy meetings
   
   
9. Project Inspection meetings
   
   
10. Employee meetings

Premises

1. Location
   
   
2. Size
   
   
3. Computer Room
   
   
4. Wiring
   
   
5. Desk space
   
   
6. General facilities
   
   
7. Training room
   
   
8. Meeting rooms

Facilities and Infrastructure Management

1. Capacity Planning
   
   
2. Performance Tuning
   
   
3. System Administration
   
   
4. Personal Computers
   
   
5. LAN
   
   
6. WAN
   
   
7. Internet
   
   
8. Standard Operating Environment (SOE)
   
   
9. Software
   
   
10. Snail Mail
    
    
11. Library
    
    
12. Hardware
    
    
13. Stationery
    
    
14. Copier
    
    
15. Facsimile
    
    
16. Conference room booking system
    
    
17. PABX
    
    
18. Telephones
    
    
19. Mobile Telephones

Training

1. Our premises versus Client's
   
   
2. Training room
   
   
3. Hardware
   
   
4. System Software
   
   
5. Wiring
   
   
6. Product version
   
   
7. Trainers
   
   
8. Training Material (handouts)
   
   
9. Billing
   
   
10. Certificates

Accounting

1. Cash Flow
   
   
2. Profit and Loss
   
   
3. Balance Sheet
   
   
4. Funding
   
   
5. Budgets
   
   
6. Forecasts
   
   
7. Profit share reporting
   
   
8. Debtors Outstanding
   
   
9. Creditors
   
   
10. Payroll
    
    
11. Asset Register
    
    
12. Sales analysis
    
    
13. Invoicing/billing
    
    
14. Purchasing
    
    
15. Commission payments and reporting
    
    
16. Inventory
    
    
17. Internal audit
    
    
18. External audit
    
    
19. Statutory and legal requirements
    
    
20. Work in process

Record Keeping

1. Equipment Movement Orders
   
   
2. Software releases
   
   
3. About Clients
   
   
4. Timesheets
   
   
5. Overtime
   
   
6. Expenses
   
   
7. Travel and accommodation
   
   
8. Car usage
   
   
9. Computer usage
   
   
10. KPI's
    
    
11. Billable work
    
    
12. All Client calls
    
    
13. Services provided
    
    
14. Sales
    
    
15. Client approval sign-off
    
    
16. Defects
    
    
17. Change requests
    
    
18. Client-specific modifications
    
    
19. Client training performed
    
    
20. Employee training performed

Works Programme Management

See "Managing A Works Programme" for details.

Project Management

1. Tools
   
   
2. Formalisation
   
   
3. Planning
   
   
4. Estimating
   
   
5. Tracking
   
   
6. Standards
   
   
7. Budgets
   
   
8. Milestones
   
   
9. Schedules
   
   
10. Project Inspections and Project Reviews
    
    
11. Reports
    
    
12. Monthly Project Status Report content and format
    
    
13. Risk Management
    
    
14. Project Organisation Structure
    
    
15. Standard role definitions
    
    
16. Project Plan

Project Office

See "IT Project Office" for details.

Account and Client Management/Service

1. Account Management
   
   
2. Who owns the Client and when
   
   
3. Managing Expectations
   
   
4. Handling Difficult People
   
   
5. Commitment to User Group
   
   
6. Annual convention
   
   
7. Client-driven
   
   
8. Loyalty
   
   
9. Managing special package modifications for Clients
   
   
10. "Rogue" software issues
    
    
11. Managing work in process
    
    
12. Major outstanding Client commitments
    
    
13. Client Feedback sessions

Standard Material

1. Standard Rollout Phase Work Plan
   
   
2. Sales Proposal material
   
   
3. Demonstration material
   
   
4. Product brochures and sales material
   
   
5. Forms
   
   
6. Forms register
   
   
7. Staff résumés

Agreements and Contracts

See "Contracts" for details.

1. Client's versus ours
   
   
2. Ability to change

Policies, Procedures, Standards and Controls

1. Price book
   
   
2. Accounting
   
   
3. Project Management standards
   
   
4. Who can make commitments to Clients (and when)
   
   
5. Who can make new product announcements (and when)
   
   
6. Who can quote fees, costs and time estimates to Clients (and when)
   
   
7. Who can report project progress to Clients (and when)
   
   
8. Stationery style standards
   
   
9. Documentation Style Standards
   
   
10. Human Resources policies
    
    
11. Travel and accommodation policies
    
    
12. Payroll policies
    
    
13. Sales commission rules
    
    
14. Accounting policies
    
    
15. Check Lists and Templates
    
    
16. Standard for standards format
    
    
17. Who can talk to the press/media (and when)

Bureaucracy

1. Form filling
   
   
2. Approval layers
   
   
3. Preoccupation with process and form
   
   
4. Circuitous reporting systems
   
   
5. Rigid hierarchy
   
   
6. Multi-level hierarchy
   
   
7. Stifle creativity
   
   
8. Slow decision-making
   
   
9. Insulated management
   
   
10. Paralysis by analysis

Products

See "Product Development" for details.

Documentation

1. User Documentation
   
   
2. Technical Documentation
   
   
3. Training Material

Services

1. Product support
   
   
2. Hours of operation
   
   
3. Help Desk
   
   
4. Quality of support
   
   
5. Problem reporting process
   
   
6. Client training
   
   
7. Provision of warranty terms, conditions and Warranty Period
   
   
8. Site audits
   
   
9. System Administration
   
   
10. Facilities Management (FM)
    
    
11. Opportunities for add-on business
    
    
12. Management Consulting

Quality Assurance

1. Commitment to Total Quality Management (TQM)
   
   
2. AS 3563 certification/accreditation
   
   
3. AS 3901 certification/accreditation
   
   
4. ISO 9002 certification/accreditation
   
   
5. SEI Capability Maturity Model
   
   
6. Quantity of re-work
   
   
7. Do it right the first time ethic
   
   
8. Task switching unproductive time

Day One

1. Obtain a copy of the outstanding accounts receivables list
   
   
2. Obtain a copy of the organisation chart
   
   
3. Obtain a copy of the Price Book
   
   
4. Obtain a copy of the Client list
   
   
5. Obtain a copy of the Budget
   
   
6. Obtain a copy of the Enterprise Strategy
   
   
7. Obtain a copy of the Profit and Loss for the last month and year-todate
   
   
8. Obtain a copy of the Balance Sheet
   
   
9. Obtain a list of all contingent liabilities:
   • Major outstanding Client commitments
     
     
   • Caveats and special clauses in Client contracts
     
     
   • Product statements of direction, release dates
     
     
   • Product and Services Pricing
10. Inventory holding
    
    
11. What revenue leakage is there (eg, maintenance freebies)?
    
    
12. Interview direct reports
    
    
13. Interview my boss
    
    
14. Current works programme
    
    
15. Contracts
    
    
16. How happy are the Clients?
    
    
17. Which Clients are unhappy?
    
    
18. What revenue comes from maintenance (ie, contracted, good cash flow)?
    
    
19. What revenue comes from services?
    
    
20. What revenue comes from products?
    
    
21. How to reduce fixed costs?
    
    
22. How to reduce recurring costs?

Corporate Image

1. Stationery style standards
   
   
2. Mature/young
   
   
3. Formal/informal
   
   
4. Big 6 professional
   
   
5. Solid
   
   
6. Trustworthy
   
   
7. Dependable
   
   
8. Flashy
   
   
9. Expensive/inexpensive
   
   
10. Telephone book image

Conducive Work Environment

1. New projects
   
   
2. Interesting projects
   
   
3. Training
   
   
4. New technology
   
   
5. The very best infrastructure and facilities
   
   
6. Take away all of the excuses
   
   
7. Not lots of overtime
   
   
8. Right amount of pressure

Miscellaneous

1. How do we protect copyright and intellectual property?
   
   
2. What intellectual property do we have?

Practice Management

Organisation Structure = pyramid

Principals = Finders

Managers = Minders

Consultants = Grinders

Practice Economics

Practice Metrics:

1. Leverage
   
   
2. Percentage Billable

Try and use Value-Based Pricing (ie, higher than standard price book rates) for fixed price engagements

This requires careful analysis of what the benefits to the Client are, so you don't charge too much.

Include:

1. Contingency Time and Cost
   
   
2. Quality Assurance reviews time and costs
   
   
3. Senior Management reviews time and costs
   
   
4. Pre-sales activity time and costs (ie, re-coup)

Get a deposit on contract signing (Mobilisation Fee):

1. Assists in project being cash-flow positive
   
   
2. Allows all startup costs to be paid for directly by Client

Have as many people as possible directly billable to Client's (ie, revenue generating) projects

Monitor staff billability

Set billable % target for each staff member (plus bonus/incentive payment based on attaining this)

Projects to always be cashflow positive

Establish milestones for payment every month

Also See

Corporate Culture

Due Diligence

Management Consulting

Mobilisation Fee

SWOT Analysis