Beyond (Just) Regaining Lost Ground – 2013 Professional Services Benchmark Report

SPI Research2012 certainly presented its fair share of challenges to the worldwide economic and political landscape. Austerity measures and rising unemployment in the Eurozone, slowing growth that may indicate more fundamental underlying problems in China, and uncertainty in the run-up to the presidential elections and fiscal cliff here in the US all could have provided business leaders an excuse to play it safe. Fear could have promoted a wait-and-see attitude and motivated a conservative approach to investment, hiring, and growth.

Despite this uncertainty, 2012 proved to be quite a strong year in the professional services industry—a year which saw services firms on average return to pre-recession performance. Key indicators such as profitability, billable utilization, and billable staff ratios are back to levels enjoyed prior to the 2008 financial collapse. Just as revealing is that last year’s rate of improvement has slowed, suggesting that while PSOs were able to quickly recover ground lost during the recession, they are having a harder time improving beyond those levels.

According to SPI’s 2013 Professional Services Benchmark Report, services firms will face some key challenges in the coming year. Low unemployment of and increasing demand for highly skilled workers will radically change the dynamic and power structure of the employer/employee relationship, described by SPI as the “talent cliff.” Firms will need to figure out how to shift their services portfolios away from more commoditized offerings like staff augmentation towards more specialized (and more profitable) ones like business and management consulting. Finally, organizations will need to continue on the trends they established in 2012 in which they were able to grow significantly through improved efficiency, not just by increased headcount.

One driver of the improvements that PSOs saw in 2012 is investment in systems like commercial Professional Services Automation (PSA) solutions such as Projector. PSAs increase a delivery team’s efficiency by automating the mundane, help firms optimize their portfolios by highlighting the unprofitable, and improve an organization’s utilization by balancing supply and demand of its most valuable resource—its people.

What’s fascinating about SPI’s 2013 benchmark report is that it presents these stories and many others against the backdrop of the shifting economic climate, an evolving professional services industry, and an ever-maturing portfolio of business management systems. More importantly, it tells these tales based on fact, illuminated by insight. In a manner unlike many other studies I have seen, this benchmark report manages to present both sides of the story, not just raw data stripped of perspective or unsubstantiated opinion devoid of fact.

Projector PSA is a proud sponsor of SPI Research’s ongoing efforts to help the professional services community measure and improve its performance. We are pleased to have played a small part in bringing you the 2013 Professional Services Benchmark Report.

To see these perspectives and to start benchmarking your organization against your peers:

We hope the insight that it contains helps you to achieve your goals no matter what surprises 2013 and beyond may bring.

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