PT MSCBA 2019-2021 - D RAFT PROPOSAL THESIS

Name Roland Rütten

Measuring and monitoring the (financial) performance of a consultancy organization.

Provisional
Title Thesis

An abstract is a short summary of your thesis. It allows potential readers to quickly identify
Abstract what your thesis is about and decide if it is worth reading. All abstracts should include:

 A statement of your main topic, purpose and objectives

 A brief description of the methodology
 An overview of the most significant findings or arguments
 A summary of your conclusions and recommendations

This thesis is about a specific type of organization, the (not listed) consultancy organization.
Much has been written about management of and monitoring and measuring the
performance of a typical product organization. But a consultancy organization is different.
Different regarding management, but also different with regard to how to monitor and
measure the financial performance. This research tries to get make clear what those
differences are and does a suggestion on how measuring and monitoring the performance
of a consultancy company could look like.

Background Most literature and research about different aspects of an organization, is related to the
most common type of organization, which is an organization which manufactures and /or
delivers products. This is true for example for marketing, supply chain management,
accounting and finance.
But an service organization like a consultancy company is a different type of organization,
with a different structure, organizational as well as financial, which has a different
approach of the market, which has a different approach with regard to creating value to a
customer, which also has a different marketing approach .

I myself am employed at a consultancy company, which has expressed the intention to

grow substantially (double the amount of fte’s) in the coming 10 to 15 years. That made
me think about how we could monitor this process and more in general, how could we
monitor the performance of the company overall. I realized that most of the literature
about organizations, regarding structure, processes, functions, finance, is related to the
typical product organization.

I realized that a consultancy firm most probably also needs different financial ratios to
monitor the performance of a company. A consultancy firm for does not have something
like one price per product, but an hourly rate, which can be different per project, per
customer, even per employee. A consultancy firm does not have inventory, but something

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 like available hours, which are not preservable like most inventory. The cost of the ‘goods
sold’ depends on the consultant who is delivering the service.

What do you hope to achieve with your research and how are you going to achieve that?
Aims and
Objectives

The first aim of this thesis is to compare a typical product organization with a typical
consultancy organization.

A second aim is to create for a typical consultancy organization a financial management

accounting model, with which the financial performance of the organization can be
monitored.

Fist I will be looking at the business processes, functions and organization of a typical
consultancy organization and a typical product organization

Then I will investigate the financial flows of a typical consultancy organizations and a
typical product organization which are related to the processes, functions and organization
as described above.

Third I will determine which financial information is crucial for a typical consultancy
organization for measuring and monitoring the performance of the organization.

1. What are the major differences between a typical product organization and a
consultancy organization?
Research 2. How does this translate into the financial management (for example in the
Question (s) cost calculations, assets, margin calculations) of the organization?
3. How can one measure and monitor the financial performance of a typical
consultancy organization, compared to a typical consultancy organization?

How and why is your research relevant – in both an academic (theoretical) and practical
Theoretical way?
Relevance

Services as a type of industry accounts for the biggest part of the employment in the OECD
countries, when compared to other types of industry.

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 The worldwide added value (as a % of GDP) of services is according to the World Bank, was
over 60% in 2016, which is substantially. More and more companies make use of consulting
organizations and more and more people find employment at a consultancy company.

Research The overall strategy to effectively address and answer the research question (s), how you
Design, are going to execute your research and which (type of) data you are going to use.
Methodology
and Data
Sources I will use the literary research method to gather the qualitative data. Regarding the
financial management of the Consultancy company, also new ideas may be written down.

Next to that I will also perform survey research, to collect data from a small numbers of
consultancy firms, to check whether my findings and suggestions regarding the consultancy
firm are correct and confirmed, complete and realistic. I will do the data collection via
interviews.

A selection of relevant academic articles/books/other literature with identification of their core concepts that support the research.

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Preliminary Title Document type Core concept

literature A.C., G. B., Mirthe, van de B., & P.M., Journal Performance Management System in
W. C. (2012). Enabling performance small professional Service firms
Review measurement in a small professional
service firm. International Journal of
Productivity and Performance
Management, 61(8), 839–862.
https://doi.org/10.1108/174104012112
77110

Starreveld, P. R. W. R., Mare, de P. D. Book General concepts information provision

H. B. R., & Joëls, P. E. J. R. (Eds.). within companies
(1997). Bestuurlijke
informatieverzorging deel 1, Algemene
grondslagen (4th edition). Samsom.

Starreveld, P. R. W. R., Mare, de P. D. Book About the value cycle within a

H. B. R., & Joëls, P. E. J. R. (Eds.). company
(2004). Bestuurlijke
informatieverzorging 2A Toepassingen
(5th ed.). Noordhof.

Maister, D. H. (1982). BALANCING Book Examination of management of

THE PROFESSIONAL SERVICE professional service firms
FIRM. Sloan Management Review,
24(1), 15–29.

Flapper, S. D. P., Fortuin, L., & Stoop, Article Presents a concrete method for
P. P. M. (1996). Towards consistent constructing a consistent set of PIs
performance management systems. forming the basis of a consistent
International Journal of Operations performance management system
and Production Management, 16(7),
27–37.
https://doi.org/10.1108/014435796101
19144

Oeij, P. R. A., de Looze, M. P., Have, Article Design of Q4-model: a model of

K. Ten, van Rhijn, J. W., & Kuijt-Evers, productivity, covering quantity and
L. F. M. (2011). Developing the quality aspects and applicable to
organization’s productivity strategy in various sectors of industry, and a
various sectors of industry. dynamic control cycle.
International Journal of Productivity
and Performance Management, 61(1),
93–109.
https://doi.org/10.1108/174104012111
87525

Chakraborty, A., & Tan, K. C. (2012). Article Six Sigma in service organisations.
Case study analysis of Six Sigma
implementation in service
organisations. Business Process
Management Journal, 18(6), 992–
1019.
https://doi.org/10.1108/146371512112
83384

Performance, D. O. (n.d.). Article Performance measurement in

Measurement for Professional professional services.
Services Driving Operational
Performance Why Measure Anything ?
Are Financial Measures Enough ?

Sahay, B. S. (2005). Multi-factor Article Discuss concept of productivity in

productivity measurement model for service sector and present a
service organisation. International multifactor productivity measurement
Journal of Productivity and model.
Performance Management, 54(1), 7–
22.
https://doi.org/10.1108/174104005105
71419

Swart, J., Hansen, N. K., & Kinnie, N. Article Performance in professional service
(2015). Strategic Human Resource firms.
Management and Performance
Management in Professional Service
Firms. The Oxford Handbook of
Professional Service Firms, 1(March

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 2018), 1–31.
https://doi.org/10.1093/oxfordhb/97801
99682393.013.20

Lichiello, P. (2000). Guidebook for Article Fundamentals of performance

Performance Measurement (public measurement in public health.
health). Policy Analysis, December,
81.
http://www.uic.edu/sph/prepare/course
s/PHLearning/resources/pmguidebook.
pdf

Skjølsvik, T., Pemer, F., & Løwendahl, Article Strategic Management of professional
B. R. (2017). Strategic management of service firms
professional service firms: Reviewing
ABS journals and identifying key
research themes. Journal of
Professions and Organization, 4(2),
203–239.
https://doi.org/10.1093/jpo/jox005

De Man, A.-P., & Seipl, D. (2017). The Article Description of business models in
Three Emerging Business Models in consulting.
Consulting. 1–19.
http://www.sioo.nl/files_content/pdf
%27s/artikelen/The three emerging
business models in consulting Sioo.pdf

Atrill, P., & McLaney, E. (2011). Article Introduction to accounting

Introduction to Accounting and
Finance. Accounting and Finance for
Non-Specialists.

Nachum, L. (1999). Measuring the
productivity of professional services: A
case study of Swedish management
consulting firms. ESRC Centre of
Business Research.
https://www.researchgate.net/publicati
on/4924948_Measuring_the_Productiv
ity_of_Professional_Services_A_Case
_Study_of_Swedish_Management_Co
nsulting_Firms
Article This paper seeks to address the
difficulties associated with the
measurement of the productivity of
professional service firms and to
propose a more adequate measure of
productivity in these industries.

Goyena, R., & Fallis, A. . (2019). Article Strategic management choices

Strategy and Strategic Alignment of professional service firms.
Professional Service Firms. Journal of
Chemical Information and Modeling,
53(9), 1689–1699.
https://doi.org/10.1017/CBO97811074
15324.004

Sidorova, A., & Isik, O. (2010). Article a comprehensive overview of business

Business process research: A cross- processes (BPs) literature
disciplinary review. Business Process
Management Journal, 16(4), 566–597.
https://doi.org/10.1108/146371510110
65928

What are you hoping/thinking to conclude/(dis)approve?

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Outline I hope to create a clear understanding of the differences between a product organisation
expected and a consultancy organization and to create a clear picture of how the financial
outcomes performance of a consultancy organization could be measured and monitored.

Provisional 1. Introduction
Table of 2. Description of Product organization
Contents 3. Description of Consultancy organization
4. Comparison Product- and Consultancy organization
5. Description of financial organization Product Organization
6. Description of financial organization Consultancy organization
7. Comparison of financial organizations
8. Measuring and monitoring performance of a product organization
9. Measuring and monitoring performance of a consultancy organization
10. Conclusion

(note: perhaps 2., 5. And 8. Could be left out, because my focus is on the consultancy
organization)

References - https://data.oecd.org/emp/employment-by-activity.htm -
Used in the - https://data.worldbank.org/indicator/NV.SRV.TOTL.ZS
Proposal

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Project Planning
Date Start End

Activity

1. Introduction 1/9/2020 15/9/2020

2. Description of Product organization 16/9/2020 30/9/2020

3. Description of Consultancy organization 1/10/2020 15/10/2020

4. Comparison Product- and Consultancy organization 16/10/2020 31/10/2020

5. Description of financial structure Consultancy 1/11/2020

15/11/2020
organization

6. Comparison of financial structures 16/11/2021 31/11/2021

7. Measuring and monitoring performance of a product 1/12/2021 15/12/22021

organization

8. Measuring and monitoring performance of a consultancy 16/12/2021 3/12/2021

organization

9. Conclusion 1/1/2021 15/1/2021

Feedback Track Coordinator

General comments

Is it achievable?

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Specific issues that you should address

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