The client, an internationally known provider of consulting services delivered a wide range of specialist services at his customers offices via salaried consultants. The nature of the work required a range of expertise to be available and the level of demand for specific services fluctuated daily.
The work was traditionally charged at an
hourly rate which caused friction with clients when budgets were
exceeded, and also made revenue forecasting difficult. While the business was profitable due to the high
level of fees charged, increasing competition had started to exert downward pressure on fees, reducing proftability and undermining the business. See also,
Operations and People studies.