Working with Time Management in IT Consulting. - Developing a Time Management Strategy by Using Performance Management EMMA ANGERMUND EMMA LINDQVIST

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1 Working with Time Management in IT Consulting - Developing a Time Management Strategy by Using Performance Management EMMA ANGERMUND EMMA LINDQVIST Master of Science Thesis Stockholm, Sweden 2013

2 Working with Time Management in IT Consulting - Developing a Time Management Strategy by Using Performance Management Emma Angermund Emma Lindqvist Master of Science Thesis INDEK 2013:120 KTH Industrial Engineering and Management Industrial Management SE STOCKHOLM

3 Master of Science Thesis INDEK 2013:x Working with Time Management in IT Consulting - Developing a Time Management Strategy by Using Performance Management Emma Angermund Emma Lindqvist Approved Examiner Mats Engwall Commissioner Open Mind Supervisor Maria Hammarström Contact person André Strindby Abstract Time is in control of our everyday life and work life. Time is a valuable resource of which everyone possesses the same amount. In work life, time is important; it rules the workday and the tasks that are being performed. Time is even more significant within the consultancy industry, where worked time and competence is what is being delivered to the customers. Since time is of great importance for consulting firms, time management systems and time reporting become a crucial part of a consultant s day. IT consulting firms spend lots of time and money on business systems, despite this the area of how time management and performance management are connected is relatively unexplored. This report aims to contribute to an enhanced understanding regarding why consultancy firms work with time management, and how data from time management systems could be used. The study will also investigate how the employees could be motivated to use the time management system in the extent that the managers wish, as well as important requirements on data from the time management system. These questions can together give answer to how time management can be aligned with performance management within an IT consultancy firm. The report is based on 14 interviews performed at five different IT consulting firms in the Stockholm area, a participant observation conducted at one of the participating companies, as well as a literature review. The study was performed during the spring of The study found that the main reason for IT consultant firms to report time is to gain decision support for invoices and salary payments. Being able to see overtime and flextime is something that is appreciated by the employees. Other identified areas of usage are forecasts and estimates, evaluations and follow-ups, utilization rate calculations, and employee care. Regular follow-ups, preferable weekly, are necessary for motivating the employees to work with time management. It is also important that the time management system is easy to use in order for it to generate relevant decision support. The study shows that to implement a successful time management strategy, the following aspects should be considered: (i)!"#$"!#%&'()*&#!""#%)+,-#.//0!"#,'1&#+2&'*#+"%%)$/+'!/"$#'$3#4&&526#3&'32/$&(-#.///0!"# %'5&# /!# (/%72&-#./10!"# +*&'!&# '4'*&$&((# '%"$8#!,&# &%72"6&&(-# '$3#.10!"#,'1&# '#!/%&# %'$'8&%&$!#(6(!&%#!,'!#%)!)'226#9&$&:/!(#!,&#%'$'8&*(#'$3#!,&#&%72"6&&(; Key-words: Time Management, IT Consultancy, Performance Management.

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5 Acknowledgements We would like to start with sending a big thank you to our supervisors. Maria Hammarström at the Department of Industrial Economics and Management, School of Industrial Engineering and Management at the Royal Institute of Technology, for great guidance and support during the whole process. Linda Kann at the Department of Theoretical Computer Science, School of Computer Science and Communication at the Royal Institute of Technology, for pointing us in the right direction and helping us with the finishing touches. André Strindby at Open Mind for always and instantly answering all our questions and providing us with necessary information. During the research process, we have been located at the headquarters of the IT consultancy firm Open Mind and would also like to thank all the people working there for providing support and information during the work with this thesis. Finally, we would like to thank everyone who has proof read, questioned, and given feedback on our report. This master thesis is better because of you. This master thesis has been written in collaboration between Emma Angermund from the School of Industrial Engineering and Management at the Royal Institute of Technology and Emma Lindqvist from the School of Computer Science and Communication at the Royal Institute of Technology. Both of us have contributed equally to all parts of the research process regarding literature search and review, interviews, and writing. Our slightly different academic backgrounds have complemented each other in a good way during the work with the thesis, making it easier to look at the questions from different perspectives and improving the final result. Stockholm June 5, 2013 Emma Angermund and Emma Lindqvist

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7 Abbreviations BI - Business Intelligence COTS - Commercial Off-The-Shelf IT - Information Technology PM - Performance Management PMS - Performance Management System

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9 Contents I Background and Methodology 1 Introduction Background and Relevance of the Study Objective and Research Questions Delimitation Outline Research Process Research Approach Pre-Study Participant Observation Semi-Structured Interviews Sample Selection Interview Development and Technique Interview Analysis Literature Search and Review Credibility and Correctness of Data II Literature Review 13 3 Why Working with Time Management in Consulting Introduction to Consultancy The Consultancy Business Model Customerizing in Order to Grow The Value of Time Rating Time Time Management The Value of Information Manual Data Handling Automatic Data Handling Choosing a Business System Concluding Words How to Work with Time Management in Consulting Business Intelligence Benefits with Business Intelligence Business Intelligence and IT Performance Management How to Succeed with Performance Management Results, Processes and People

10 CONTENTS Importance of Performance Management Performance Measurement System Concluding Words III Findings 27 5 Empirical Results Why Time Management? Delivering Competence According to Customer Demand Building Trust What Can Time Management be Used for? Forecasts and Estimates Utilization Rate and Hiring Evaluation and Follow-ups Missing Features How Can Employees be Motivated to Report Time? Being Transparent and Creating a Company Culture that is Encouraging Create Awareness but Communicate Information Wisely Provide an Overview of the Company Situation What Characteristics are Important for Time Management Data? Focusing on Frequency and Time Spent Storing Details Investing in Time Management Systems and Mobile Apps IV Final Conclusions 37 6 Analysis and Discussion Why do IT Consulting Firms Work with Time Management? How Could Company Performance be Measured with Time Management Data? Forecasts, Estimates and Utilization Rate Personal Metrics and Staff Caring How Could Employees be Motivated to Use a Time Management System? Company Culture and Transparency Awareness and Overview Simplicity What Characteristics does Time Management Data Need for it to be Useful? Reduced Impact of the Human Effect Real-time Data is the Most Valuable Automatic Data Handling if Prefered over Manual Conclusions and Recommendations A Sustainable Time Management Strategy Recommendations Further Research List of References 49 A Interview Guides B Table of Interviewees I XI

11 List of Figures 1.1 The outline of the report The research process The literature review process

12 LIST OF FIGURES

13 List of Tables 2.1 The connection between the methods and the research questions Summary of the observations Company overview Summary of the interviews Summary of the analysis Summary of the literature review Parameters that can be measured with time management data Summary over time management systems used by the participating companies B.1 List of all interviewees with their work life experience and information about the interview. XI

14 LIST OF TABLES

15 Part I Background and Methodology

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17 Chapter 1 Introduction Time is precious, not replaceable, has no limits, but is at the same time very expensive (McManus, 2008; Serbanescu and Radulescu, 2012). We fill our days with different activities that are governed by the clock; work, school, family, friends etc. This is one reason for why almost all consultants use some kind of time reporting system, where the services are assigned a uniform value and the statement time is money is realized (Yakura, 2001, p. 1077). It might be done by hand on a piece of paper, in a spreadsheet or with the help of some system. Business systems, in which time management systems are included, have been a huge expense for companies in all industries worldwide (Conghua, 1999), and there is no shortage of different systems to choose from. In the consulting industry, time management systems are essential since services and knowledge sold are quantified and billed by the hour. Time reporting is one of the daily tasks of a consultant, but does the time spent on time reporting pay off? IT consultancy companies operate in a fast-moving and constantly changing environment where the competition has increased and the profit margins decreased (Hammarström et al., 2012; Haraldsson, 2013). To be successful as a consultant it is necessary to always be one step ahead of your customers, as customers within the IT sector are becoming more and more knowledgeable (Freedman, 2000). The IT consulting industry also differs from other consulting industries by being more dynamic and industry spanning (Vinnova, 2013). In addition to being the base of a consultancy s billing and salary payments, time reports are used for keeping track of overtime, sick days, vacations, and checking on employees. Are there more possible opportunities where data provided by a time management system could be used? Companies spend valuable time and money on building, maintaining, purchasing, licensing, and using time management systems. It is not unusual that the consultants have to enter the same information in multiple systems, e.g. when the customer is using its own time management system or when there is a project management system where time also has to be entered. Are companies really experiencing a return on investment when it comes to time management systems and time spent on using them? These are some of the questions this report aims to answer. 1.1 Background and Relevance of the Study The IT industry is one of the fastest growing industries in Sweden, with consultancy as the primary activity within the industry. During 2011 the IT consultancy industry occupied persons at companies with more than five employees, and the employment has increased with 40 % from The 1

18 CHAPTER 1. INTRODUCTION concentration of IT consultants is high in Stockholm, with 35 % of the IT consultants located within the Stockholm County. (Vinnova, 2013) This research has its starting-point at the headquarters of the Stockholm based IT consulting firm Open Mind which today employs 20 persons. In a conversation on March 5th, 2013 Johan Fredsberg, the CEO of Open Mind, stated that the goal is to double their number of employees within three years. As a company grows from a small to a medium sized company, as will be the case for Open Mind, the need for a relevant time management strategy therefore becomes an important decision. A suitable time management system can provide the management with information to steer the company performance in an efficient and effective manner (Bergman, 2011). As for the majority of the professional service firms, the personnel cost is by far the biggest expenditure (Bergman, 2011), where time reporting can be used for controlling the expenditures. However, time reporting is often an unpopular task among the employees that is considered complicated and boring (Bergman, 2011; Bergenheim, 2011; Qbis, 2012). 1.2 Objective and Research Questions Time reporting is considered as a tedious task, despite this, almost all IT consulting firms spend time and resources on time management (e.g. time reporting and planning). But does it bring any value to the company? A thing to consider is that time management data will be less useful if different consultants use the time management system differently. The data quality will then differ, making it difficult to draw reliable conclusions from it. The objective of this report is to investigate why IT consulting firms work with time management and if it is possible to use the time management data to measure company performance and in that way make the data useful. What characteristics the data needs to have and the question of how employees can be motivated to work with time management is also investigated. Previous research has mainly focused on these areas separately and within other industries than the IT consultancy. By investigating the listed areas, the aim is to fill the research gap regarding how time management and performance management could complement each other within the IT consultancy industry. The background to the phenomenon was studied through an observation at the IT consulting firm Open Mind where consultants daily spend time on time reporting. The observation was the starting point on which the continued research process was based upon. The main source of information was the interviews with consultants, sales employees, and management, at five small to medium sized IT consulting firms in Stockholm. The four research questions this study aims to answer are listed below. The first two questions aim to find the purpose of working with time management. The third and fourth questions aim to give information about how a time management strategy could look like, and what needs are preferable to take into consideration regarding data quality. The answers to these questions will exemplify how an IT consultancy firm can work with a time management strategy in combination with performance management. 1. Why do IT consulting firms work with time management? 2. How could company performance be measured with time management data? 3. How could employees be motivated to use a time management system? 4. What characteristics does time management data need for it to be useful? 2

19 CHAPTER 1. INTRODUCTION 1.3 Delimitation This study will focus on investigating why IT consulting firms are working with time management and what the time management data can be used for. This was partly done by an observation at one IT consulting firm. It would have been better if observations could have been conducted at more companies, but the authors thought it was better to do one observation than to not do any. The study will also focus on how employees can be motivated to work with time management and what characteristics the time management data should have. The focus will be of the internal time management systems and processes at the IT consultancy company, and not of other systems the consultants might have to report time in, e.g. a time management system at the customer s office. It will also include a description of time management, since there has been little written about time management within the context of the consulting industry. The study also came in contact with the areas of business intelligence and performance management, since the link between time management and these was of interest. Also the phenomenon of turning time into money is discussed. The study will not look in detail how a time management strategy should be implemented, what specific metrics an IT consulting firm should use or how a time management system is supposed to look like. This is left for further research. 1.4 Outline The report is divided into four parts with a total of seven chapters. See figure 1.1 below for the report structure. Figure 1.1: The outline of the report. Background and Methodology Chapter 1 provides an introduction to the problem and describes the objective of this study. Chapter 2 describes how the research process was designed in order to answer the research questions. Literature Review Chapter 3 provides the reader with information about why IT consultants work with time management. The chapter also gives a background covering the consultancy industry in order for the reader to understand the context of the study. Chapter 4 follows with the aim to explain how IT consulting firms can work with time management, describing the concepts of business intelligence and performance management. Findings Chapter 5 presents the findings from the interviews. This chapter is divided into four sections based 3

20 CHAPTER 1. INTRODUCTION on the research questions. Final Conclusions The authors present their analysis and discussion in chapter 6. The final chapter, chapter 7, presents this study s conclusions and recommendations. Depending on the readers previous knowledge, the authors would like to suggest different ways of reading this report. If you have no or little knowledge about the areas of this research, the suggestion is that you read all the parts in order. If you have knowledge about the IT consulting industry, the suggestion is to read all parts except chapter 3. 4

21 Chapter 2 Research Process This chapter will explain in detail all methods used in this research. The aim is to provide credibility to the study and to motivate why the chosen methods are a good tool for answering the previously stated research questions. 2.1 Research Approach An inductive research approach was chosen because of the limited literature findings during the pre-study. Because of this the study s starting point was the empirical studies. Qualitative data is appropriate when conducting an inductive study (Eriksson and Wiedersheim-Paul, 2008), which is why semi-structured interviews, participating observation and literature review were the chosen methods. The choice of methods was also based on the research questions, in order to make it possible to answer them in the best possible way, see table 2.1. Question Method Why do IT consulting firms work with time management? How could company performance be measured with time management data? How could employees be motivated to use a time management system? What characteristics does time management data need for it to be useful? Semi-structured Interviews X Literature Review Participant Observation X X X X X X X X X Table 2.1: The connection between the methods and the research questions. With an inductive study the researchers move from the specific to the general (Collis and Hussey, 2009). The semi-structured interviews and the observation provided detailed information about specific companies, employees and environments. This data has in combination with literature been generalized in order to be able to provide general recommendations. The whole research process is described in figure

22 CHAPTER 2. RESEARCH PROCESS Figure 2.1: The research process. 2.2 Pre-Study The research started with a brief pre-study that provided knowledge about time reporting systems and the consultancy industry, which is the context from which the first draft of the research questions were developed. The pre-study mainly consisted of meetings with employees at Open Mind and a very brief literature review. The brief literature review did however only result in few relevant findings. After the pre-study was done, the research questions and problem areas were identified and documented. Since the pre-study did not result in many specific findings within the research area, it spread across multiple topics. To narrow the scope of the research, the authors continued with a participant observation and interviews. 2.3 Participant Observation The authors have been located at the headquarters of Open Mind during the entire research and have participated in planning, daily routines and social activities. The observation was just partly documented by sporadic notes when something the authors thought of as important came up. The findings from the observation have worked as guidance in the preparation of the interviews and as a small complement to the findings during the interviews. The authors have chosen not to present these findings in the report, however, the findings are in a few cases referred to in chapter 6. The aim with the observation was to gain a deeper understanding of this particular IT consultant company and its employees, foremost regarding how they work with time management and performance management. The aim was also to give the authors an insight of the administrative tasks of a consultant, and how much time is spent on those tasks. This helps to answer the question of why IT consultants work with time management and how time management data can be used. How company performance can be measured with a time management system was also observed. Observation is a useful technique to gather information at the beginning of a project since it will help to understand the users context, and thereby provide information about why processes and activities are conducted the way they are (Preece et al., 2011). Collis and Hussey (2009, p. 154) state, The aim is to provide the means of obtaining a detailed understanding of values, motives and practices of those being observed. With an observation in the field, focus can be on how a process is performed, and not how the user thinks it is performed, which is often the answer given in a classic interview (Gottesdiener, 2005). A difficulty with the method is that the observer might get emotionally involved with the observed persons, making it hard to provide an unbiased description. 6

23 CHAPTER 2. RESEARCH PROCESS The observation was a prerequisite for conducting interviews. The authors gained in-depth knowledge that was helpful for understanding the interviewees jargon and the environment IT consultants are working in. A disadvantage with observing only one company is that it is not possible to compare the result with an observation at another company. The conducted observation cannot be confirmed or questioned by additional observations. A summary of the purpose with a participant observation is presented in table 2.2. Participant Observation Purpose Data Collection Participants Gain insight of values, practices and activities. Preparation for the interviews and knowledge used during analysis. All employees at Open Mind located in Stockholm. Table 2.2: Summary of the observations. 2.4 Semi-Structured Interviews Semi-structured interviews were conducted at IT consulting firms in order to get information about why and how they work with time management systems and performance management and what kinds of systems they use. Also, information about what the time management data can be used for and how employees can be motivated to work with time management was gathered. Semi-structured interviews were chosen because they allow for follow-up questions and the possibility of going deeper into the mentioned subjects, resulting in qualitative data. Structured interviews are easier to analyze and require less time, but give data of more quantitative type. The downsides of semi-structured interviews are that they are time consuming, and demand that the answers are interpreted in the right way. It can also be hard to ensure that all topics have been covered, and the analysis of the data is hampered by the questions being asked slightly differently. (Collis and Hussey, 2009) Because the authors wanted a qualitative research, with depth and richness in the data, fewer companies were chosen, and focus was instead to meet with multiple roles at each company. This gave a greater insight into each company, but the possibility to get a wider range of companies within the industry was partly sacrificed. Five companies with three interviewees at each company were chosen. A summary of the purpose with the interviews is presented in table 2.4 that can be seen at the end of this section Sample Selection The authors have during their studies at KTH come in contact with a number of IT consulting firms, and the participating companies were therefore partly chosen based on existing contacts. The participating companies were also chosen based on the number of employees and the authors idea of their characteristics. The authors have before this study met with all companies, and have at those meetings gained basic information about them. In smaller companies, the distance between managers and employees are shorter, which might affect how the companies activities are managed and controlled. Because of this, small and medium sized companies were chosen. The chosen companies were also all limited to the Stockholm area, due to limited time and resources. Open Mind, Bontouch, XLENT Consulting Group, Findwise and Netlight were the participating companies, and their characteristics and number of employees can be seen in table 2.3. Since the authors wanted different perspectives of time management and performance management, it was important that people with different experiences and roles were interviewed. Therefore, a selection of (i) one consultant, (ii) one sales employee, and (iii) one manager, was chosen from each company to participate in the study. Consultants were chosen since they are the ones expected to use the time 7

24 CHAPTER 2. RESEARCH PROCESS Company Name Number of Employees Description Bontouch 20 Works as outsourced software developers. Findwise 100 IT-solution consultants specialized in search and findability. Netlight 450 Genuine consultants. Open Mind 20 Makes tailor made and comprehensive solutions. XLENT Consulting Group 160 Mainly works with business development and software development. Table 2.3: Company overview. management system on daily basis. Sales employees were chosen due to their close customer contact and their role as negotiators. Managers were chosen because of their responsibility for performing checks and planning. By including human resources and finance employees a more complete picture of how and why IT consulting firms work with time management could have been gained. They might have contributed with more knowledge about soft values and legal issues, but according to the authors participating observation it was noticed that they do not use the time management system in the same extent as the other roles that were chosen. The respondents were chosen with the help of the authors previous contacts at the chosen companies (convenience choice), but also by snowball sampling: that is asking the interviewees for suggestions on other people to interview (Collis and Hussey, 2009). Convenience choice is a good starting point when choosing interviewees, since there often already exists a relationship with them, but the advantage with snowball sampling is that people with the right experience and the ability to answer the questions are recommended (Collis and Hussey, 2009). The interviewees were offered to remain anonymous, which they all accepted. This might have encouraged them to answer more open-heartedly Interview Development and Technique The interview guides were developed based on material from the pre-study and the research questions. First, all questions, big and small, were written down. This resulted in a huge amount of questions, which then were grouped and sorted according to the bullet list further down in this section (for complete interview guides see appendix A). All interviews started with questions about the interviewee s background and ended with concluding questions. The areas covered in between the beginning and the end are listed in the bullet list below. Some questions appeared in more than one of the interview guides, and all guides contained several open questions where the interviewee had the opportunity to give examples and elaborate his/her answers. The observation indicated that sales employees and management do not time report in the same extent as the consultants, which is why questions about time reporting was excluded from those interviews. During the interview process, some questions were altered and deleted since it seemed like they were misunderstood by the interviewees, and some questions were added when new interesting aspects arose. Consultant: How to report time, The time management system Sales Employee: The sales process, Tools Management: How to manage a company, Analytical systems Both of the authors participated during the interviews, making it possible for two people to take notes. This makes it possible to thoroughly explore all issues (Collis and Hussey, 2009). The interviews were recorded, which presents the option of going back and listen to the interviews multiple times. It also reduces the stress of taking notes during the interview. However, recording might make the interviewee 8

25 CHAPTER 2. RESEARCH PROCESS uncomfortable and inhibit candid answers (Ejvegård, 2009). Recording makes it possible to put more focus on the interviewee and to ask relevant follow-up questions. The interviews were limited to minutes, which was enough in almost all cases. In a few cases time ran out, and a few questions were skipped, but since the questions were categorized by topic, all subjects were at least touched upon. Afterwards, each interview was transcribed in Swedish. Since all interviewees as well as the authors spoke Swedish as their first language, the interviews were conducted in Swedish. This enabled a more open dialogue between the interviewers and the interviewee. The disadvantage of this choice is that some of the meaning of the interviews might have been lost in translation during the transcription, but the open dialogue weighs up for the translation difficulties. Semistructured Interviews Purpose Data Collection Respondents Gain an understanding 14 semi-structured Consultants, sales about how IT consulting interviews. employees, and firms work with time managers at 5 different management and IT-consulting firms. performance management. Table 2.4: Summary of the interviews. 2.5 Interview Analysis When the interviews were transcribed, interesting parts were highlighted. After all interviews had been transcribed, the transcripts were read through and highlighted once again, this time with the highlights categorized into different areas, based on the research questions. The purpose was to synthesize the data gathered from the interviews and to let different themes and concepts form new patterns. A first outline of the empirical chapter was thereafter written. After that, all interviews were read through once more, and relevant information was included in the text. The purpose with the analysis is also described in table 2.5. The opinions of the interviewees with more work life experience were regarded as more reliable and therefore valued higher in the analysis. For more information about the interviewees and duration of the interviews, see appendix B. The great challenge when analyzing a large volume of collected qualitative data is to reduce and restructure it in order to define the relevant parts, and present them in a way that is easy to understand for the reader (Collis and Hussey, 2009). The method chosen will reduce, restructure, reorganize, and focus the amount of data being presented in a way that makes it possible to draw final conclusions from it (Collis and Hussey, 2009). Since it was not possible to sort relevant data from irrelevant data until the authors were familiar with the complete sample, some of the collected data was finally ignored because it was not in the scope of this research. Two of the companies were atypical in their sample of interviewees. One company had two persons participating in one of the interviews. Since they had the same role and the same experience, their answers were regarded as coming from the same person. Another interview had one person representing two roles; a sales role and a managerial role. In this case, the authors chose to divide the interviewee s answers and encode them as both a sales employee and a manager depending on the question asked. This makes it impossible to differentiate the atypical companies from the ones that followed the template. The total number of interviews were thereby 14, with 15 different participating interviewees. 9

26 CHAPTER 2. RESEARCH PROCESS Interview Analysis Purpose Structure and reduce the data from the interviews, to be able to generalize and draw conclusions. Data Collection Transcripts from 14 semi-structured interviews. Table 2.5: Summary of the analysis. 2.6 Literature Search and Review The literature review was conducted in three steps, illustrated as a lying Christmas tree, see figure 2.2, meaning that every step starts wider than the previous step has ended. By doing this, new areas were included in each step and combined with a deepening of the remaining topics from the previous step (Engwall, 2013). This allowed the authors to expand and deepen the literature search at the same time. Figure 2.2: The literature review process. Step 1 A very wide literature search started during the pre-study, which spanned over many areas regarding consulting and time reporting. This enabled the authors to gain knowledge from surrounding areas. The risk of not covering enough was thereby decreased. Step 2 Refinement of the literature search based on the conducted interviews was done. But despite this, step 2 started out wider than step 1 had ended. New areas had been identified during the interviews that now needed to be covered, as well as performing a more thorough review of already relevant areas. Step 3 After the analysis of the empirical data, all relevant subjects were identified, meaning that all areas of the literature review could be revised and complemented with additional sources of information. The relevant subjects presented in this report are; Introduction to Consultancy, The Value of Time, The Value of Information, Business Intelligence, and Performance Management. The literature found was then critically analyzed and presented in the report. The aim of the literature study was to get a view of the already existing knowledge within the research area and identify a gap that this research can fill. This purpose is described in table 2.6 below. The prestudy resulted in a starting-point where the research could begin, the literature study on the other hand identified areas where this study complements existing knowledge. Because of the inductive approach of this study, the literature review was mainly done after the empirical study. This means that most literature is of the type that confirms the empirical findings (Collis and Hussey, 2009). 10

27 CHAPTER 2. RESEARCH PROCESS Literature Search and Review Purpose Find the research gap and take part of the already existing knowledge. Data Collection Books, articles and websites. Table 2.6: Summary of the literature review. 2.7 Credibility and Correctness of Data This study is mainly based on semi-structured interviews, which has allowed for more detailed explanations, helping to gain high validity to this study. The authors previous knowledge, assumptions and prejudices may have colored the perceptions and interpretations of the interviewees answers and how the questions were asked. This might have had an effect on the reliability of this research. In research where the results are interpreted it is hard to gain high reliability (Eriksson and Wiedersheim-Paul, 2008). Collis and Hussey (2009) state that reliability is not as important in a qualitative and interpretive study as it is in a positivist study. The primary sources of information were the interviewees (see appendix B) and the observation participants. The interviewees came from different companies and had different roles to provide multiple perspectives, and the observation was done at one IT consulting firm. Since all participants had different experiences the authors had to take this into consideration and evaluate the answers differently depending on whom the participant was. Other things that might have affected the interviewees answers are; anonymity, the obligation to make the company look good, and the time and place of the interview. The anonymity can make the interviewee give more open answers, while the obligation to make the company look good can have the opposite effect. The time and place of the interviews affect how comfortable the authors as well as the interviewers feel. The literature review was mainly based on books, peer-reviewed articles and web pages. In order to have relevant information the aim was to find newer publications, resulting in most of the literature not being older than ten years. Information on web-pages was more carefully considered than information in books and peer-reviewed articles. 11

28 CHAPTER 2. RESEARCH PROCESS 12

29 Part II Literature Review 13

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31 Chapter 3 Why Working with Time Management in Consulting In order to facilitate understanding of the environment in which this research has been performed, this chapter will start by providing a background covering the consultancy industry. The section about consulting will be followed by two sections covering the value of time and the value of information, which are two relevant aspects within the consultancy industry and two important subjects within the scope of the research. The two last sections will also provide information of why IT consultants work with time management. 3.1 Introduction to Consultancy Many researchers have tried to define what consultants do. Consulting is a service which helps organizations in re-engineering and rethinking their business through technology, strategy, people, and business processes. (Basil et al., 1997, p. 304) Consulting services are characterized as intangible, time consuming, tailor-made and often provided on the location of the client. (Plantenga and Remery, 2002, p. 472) Consultants use their knowledge to deliver results and growth to their customers, something that can be done within a number of different areas and professions, e.g. construction, management, human resources, public relations, and IT. Freedman (2000) states that consultants sell billable hours, and for a consulting firm to be profitable it is sufficient to sell enough of them. Consulting firms most valuable asset is the employees knowledge and time (Pellicer, 2005; Kreitl et al., 2002). A risk of having employees spending most of their time at the customer s site, which is the case in most IT consulting projects, is that they might identify more with the customer s culture and organization than their own employer s (Plantenga and Remery, 2002). This could have a negative effect on the level of commitment towards the own company (Plantenga and Remery, 2002). Consulting firms are characterized as being knowledge intensive, having close client interaction, and signing unique contracts (Kreitl et al., 2002; Pellicer, 2005; Vinnova, 2013). The uniqueness of each contract makes it difficult to plan in advance; the required number of hours in a project cannot be certain (Plantenga and Remery, 2002). As previously mentioned, there are several different areas in which consultants operate, this study focuses on IT consultants. Most of the descriptions in this section are valid for all consultants, unless otherwise is stated. The two following sections will describe how consultants get paid, what business is the most profitable and how consultants need to adapt to customer needs in order to grow. 15

32 CHAPTER 3. WHY WORKING WITH TIME MANAGEMENT IN CONSULTING The Consultancy Business Model Consultants can be paid on an hourly basis (Vinnova, 2013), called billable hours. The customer hires the consultant for specific tasks and pays according to the rates stated in the contract. The advantage of hourly payments is that the price reflects the real cost of the service; it provides some flexibility in the number of hours, letting the customer add and subtract services at known prices (Harrington, 2004). The disadvantage is that the customer cannot predict the total cost in advance (Harrington, 2004). Consultants can also be paid a fixed price for an agreed service (Vinnova, 2013), the advantage with fixed price contracts is that it provides cost predictability for both customer and supplier (Harrington, 2004). The disadvantage is that the supplier takes on all risk in the project, but a good execution can be very profitable for the consultancy firm (Plantenga and Remery, 2002). Since the technology continuously changes, IT consultants have to keep developing their skill sets. Because the customers get more and more sophisticated and pay high fees, they expect the consultant to always be one step ahead of them (Freedman, 2000). The consultants knowledge has to match the customers demand (Freedman, 2000; Plantenga and Remery, 2002) Customerizing in Order to Grow It is desirable for consultancy firms to have repeat business because it requires less work and investment and is therefore more profitable (Kirkham, 2006). According to Kirkham (2006) over half of a consultancy s business is repeat business. Basil et al. (1997) state that a consulting firm can only survive if it maintain its existing customers. One way to be successful in the consulting industry is to customerize - meaning that the consulting firm should be more responsive to its customers and adapt to the customers business (Basil et al., 1997). Successful consulting is when the customer is satisfied and the consultant is trusted and hired again. Trust is also what enables the essential team-work between customer and supplier (Bloch, 1999). As (Grisham, 2010, p. 279) states; Trust is a fragile commodity; it takes time to build, but it can be lost in an instant. Repeat business might thereby lead to company growth. Company growth causes many challenges that need to be tackled, Penrose (1995) states that one of them is the administration (cited in Kreitl et al. 2002). When the organization s structure become more complex, communication and reporting become more important to keep the organization under control (Kreitl et al., 2002). Growth can be measured in many ways, e.g. by company size, turnover or profit. But the most appropriate measure for consulting firms is the number of employees because, as stated earlier, that is the company s most important asset (Kreitl et al., 2002). These administrative tasks often include time management. The next section will talk about how consultants turn time into money, the value of time in the consultancy industry and how time can be rated differently. 3.2 The Value of Time IT consultants are, together with e.g. lawyers and other professional service providers who bill hourly, in the business of turning time into money (Freedman, 2000). As Yakura (2001) states, the work of IT consultants is hard to put a value on, which results in it being measured in hourly units. Within the consultancy industry, the valorization of time is the process where time is turned into billable hours, which in turn is transformed into money. Time is also the basis of management and what all predictions and estimations are based on (Serbanescu and Radulescu, 2012). In Yakura s (2001) study it was observed that billable hours are used as a performance measure and a way of controlling each consultant s workload. The company s overall performance 16

33 CHAPTER 3. WHY WORKING WITH TIME MANAGEMENT IN CONSULTING can also be measured by the amount of billable hours since the company s profitability is closely related to the number of hours billed (Yakura, 2001). Time is measured with comparison to what it is used for, meaning that it is not time that is being managed, but rather the activities that are performed during that period (Serbanescu and Radulescu, 2012) Rating Time Despite the fact that time is turned into money, the amount the customer is billed might change because of other reasons than the number of worked hours (Yakura, 2001). It is not uncommon that hours are cut from projects in order for the projects to stay within budget (Yakura, 2001). To avoid great losses and shift the risk, consulting firms try to avoid fixed price contracts (Plantenga and Remery, 2002). With fixed price contracts the risk of working more hours than planned is greater, and when that happens time is no longer equal to money (Yakura, 2001; Harrington, 2004). In Yakura s (2001) study it also became clear that a time management system enables the ranking of different types of time. The most valuable time is billable hours - time that creates revenue. Second came time spent on looking for business, but it was only valuable if it later resulted in new business. The lowest ranked time was time spent on administrative tasks, sick-leaves and vacations. (Yakura, 2001) Yakura (2001) also states that there is a substantial problem that it takes a lot of effort to assign an economic value to time. One hour of work for one consultant is rarely equivalent to one hour of work for another consultant. This ambiguity is caused by different contexts and events, which affects the amount of the invoice sent to the customer (Yakura, 2001). To keep track of how time should be rated there is a need for time management Time Management Management of time is a central problem in today s society (Clink and Newman, 2000). Time management encourages managerial staff to achieve goals, establish priorities and enhance communication (Serbanescu and Radulescu, 2012) and can thus contribute to an organization s profitability (Burt et al., 2010). According to Burt et al. (2010), stress, exhaustion, and other health issues can be an effect of poor time management. Burt et al. (2010) state that there are four dimensions of time management: (i) supervision, (ii) co-worker interaction, (iii) job descriptive processes, and (iv) time values. They are described as: Supervisors can be encouraging and supporting of good time management behaviors in their communication with employees, and through this also provide tasks, goals and priorities. The co-worker interaction and discussions can make team members better coordinate time usage, and moreover provide a mechanism where tasks, goals and priorities are better clarified. Information about tasks, goals and priorities can be provided in a more formal way by e.g. job descriptions. The link between time usage and productivity makes it easier for managers to support time management behaviors. Kennedy (2004) cites Mitter Despite years of training, time management is still a huge issue within organisations with heavy workloads and overload. Daily work tasks of an administrative nature are not always measured properly, but probably still make up a great deal of the working day (McManus, 2008). Moreover, today it is possible to use dead time e.g. when waiting on public transportation, to communicate (Kennedy, 2004), making it even harder to properly measure the time spent on administrative tasks. 17