Hayk Martirosyan: “An Automated Business Model Is More Competitive Than Excel”

Hayk Martirosyan, Managing Partner at Quattor Advisory, told IT RUSSIA why conventional ERP systems fall short for consultants, how automation helps double the number of projects a firm can handle, and why companies are moving away from Excel in favor of their own software.

Off-the-Shelf Solutions Fell Short

– What led you to develop your own ERP system?

– When we started scaling our consulting business, we realized that none of the off-the-shelf ERP/CRM systems fully accounted for the specifics of consulting services. On top of that, our internal processes, economics and compensation system have a number of distinctive features that we also wanted to automate. Most solutions work very well for retail, manufacturing or conventional project management, but they cannot calculate the economics of a consulting business.

For us, it was essential to see more than just employee utilization. We needed to know how many hours people had worked, the actual margin on each project and for each partner, how much time went into preparing commercial proposals, and where margin leakage or other inefficiencies occurred. With general-purpose ERP systems, you essentially have to build these processes yourself. So we stopped looking for a ready-made product and started developing a system around our own needs.

– What problem in the consulting market is most underestimated today?

– At many consulting firms, highly paid professionals still spend a lot of time on mechanical tasks: manually searching for project information, coordinating status updates and compiling reports. If an employee routinely handles administrative work, the firm loses its most valuable resource – time. A second underestimated problem is the lack of data for decision-making. If a system does not capture the firm’s economics, management simply does not have the numbers it needs to make strategic decisions about which practices to expand and which to scale back. And third, when some processes are handled within the system while others are completed manually, two parallel management accounting tracks emerge. The data diverges, and people lose confidence in the numbers.

Consultant to Consultant

– Does your Tessera project help solve these problems?

– The key difference is that Tessera was conceived from the outset as a system designed by a consultant for consultants. Most ERP systems handle individual processes – CRM, finance or document management. PSA systems have a better grasp of project-based work but, as a rule, do not cover the full economics of a consulting business.

We wanted to bring the entire operational side of the business into a single system: from preparing commercial proposals and CRM to time tracking, billing for actual hours worked, calculating margins by project and partner, and payments to contractors and payment agents. On top of that, we wanted a company-wide analytics layer covering consolidated revenue and margins, profitability by service type and client, the ratio of projects won to projects lost, and team performance. Companies typically compile this kind of analytics manually in Excel or use a separate BI layer on top of their accounting system.

– What metrics convinced you that developing your own ERP had really paid off?

– After we rolled out Tessera, the number of projects we completed rose from 275 to 616 a year. At the same time, our project delivery staff grew by just 34%, while the number of projects handled per professional increased by 67%. Automation also cut the time needed to prepare a single billing report from 45 minutes to five. And even five minutes is a conservative average estimate. For most of our projects, reports can be exported in a client-ready format within seconds. We can now see average margins across all projects, by project type and by partner, so we understand which practices to expand. Notifications about invoice status have also helped us collect payments faster. For us, all of this is the clearest indication that automation really does change the economics of a business.

Proprietary Is More Efficient

– Many companies buy off-the-shelf ERP systems and then spend a lot of time customizing them. Why does that happen?

– Because a general-purpose product can never know the specifics of a particular industry. Typically, a company buys a license first, then goes through a lengthy configuration process, followed by additional integrations, proprietary modules and customizations. What’s more, when you buy the system, you may not even know that you need a particular feature or that another one does not work for you – the need for changes only becomes apparent once you start using it. In the end, two or three years later, the company still winds up with its own ERP – except that it has been built on top of someone else’s product, at greater cost and more slowly than if the company had built it around its own needs from the start.

– Today, many companies are paying close attention to technological independence and information security. How did you address these issues?

– Tessera is built on open-source software and deployed directly within the client’s infrastructure, without relying on foreign cloud services. This allows companies to meet their internal information security requirements, avoid dependence on external SaaS platforms and retain full control over corporate information. At the same time, we used a mature, well-established technology stack – Python, PostgreSQL, Docker and Nginx – that provides reliability, scalability and room for further development of the system.

We also aimed to make interacting with the system as convenient as possible, so Tessera is integrated with a Telegram bot that automatically alerts employees to events requiring attention: billing delays, inactive clients, projects with stalled statuses or work-hour limits being exceeded. Instead of constantly checking dozens of reports, users receive information precisely when it actually requires action. This helps them manage processes in real time.

– What types of companies would you recommend consider developing their own ERP first?

– First and foremost, companies that sell knowledge-based services. That includes consulting firms, law firms, auditors, appraisers, investment advisers and engineering companies – any business where people create the core product and the economics revolve around experts’ working time. In these industries, it is particularly important to understand the cost of each hour and manage project profitability in real time.

Improving internal efficiency is “low-hanging fruit”: it is easier to achieve than chasing new clients and increasing revenue. That is especially relevant in a challenging market – a company with automated business economics is more competitive than one that still relies on outdated spreadsheets for manual management accounting.