Every year over the past decade, Service Performance Insight (SPI) publishes their comprehensive Professional Services Maturity Benchmark that provides a unique perspective into what’s going on in the professional services industry. Every year, I eagerly pour through the results to understand what’s new, what’s changed, and what’s different. In the 2016 SPI Research, however, what really stood out was one factor that has actually stayed the same year after year: the fact that revenue growth (averaging 10.9% per year) has exceeded headcount growth (averaging 8.3% per year) consistently over the past five years or more.
This trend isn’t driven by services firms raising their pricing structures, which have remained flat or even shown a slight decline over the same timeframe. Rather, the dynamic is driven by organizations’ ability to become more and more efficient over time, as evidenced by overall 5-year trends of increasing utilization and profitability.
While there are many paths towards improving efficiency, SPI has identified the adoption of a Professional Services Automation (PSA) solution such as Projector as one of the key levers smart services firms utilize. Adoption rates of commercial PSA tools have consistently been in the 95% to 100% range for the top-performing organizations—a cohort that is growing twice as fast, is more profitable, has happier employees and clients, and enjoys higher utilization with less employee attrition than its peers. Whether or not they are part of the top-performing firms, organizations that have adopted a PSA solution demonstrate 78% faster growth, 6% higher utilization rates, and 25% better profitability than organizations that don’t use a PSA tool.
Professional Services Automation Accessibility
PSA solutions have become increasingly accessible and ever more affordable over the years, with most vendors switching over to the cloud-based, SaaS model that Projector has been promoting since its launch. SPI views PSA capabilities as part of the core triumvirate of business systems needed by high-performing services firms and, with the capability to integrate easily with customer relationship management (CRM) and enterprise resource planning (ERP) tools, having a consistent, integrated view of the organization’s performance is ever easier.
PSA Software Satisfaction
Despite this, SPI estimates that as many as 20% of services organizations don’t use a commercial PSA solution. Of the ones that do, many are not terribly happy with the one they’ve chosen. This year’s benchmark shows a marked gap in PSA satisfaction when comparing the top-performing organizations to their peers. Given SPI’s predictions about troubling times ahead, the need to drive efficiencies to increasingly higher levels, and the evidence of a PSA solution’s impact on organizational performance, we’re faced with the inevitable question:
“if you haven’t yet adopted a PSA solution that you’re actually happy with, what are you waiting for?”
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 2016 Professional Services Benchmark Report.
To see these perspectives and to start benchmarking your organization against your peers:
Sign up to download the 2016 Professional Services Benchmark Survey Results
We hope the insight that it contains helps you to achieve your goals no matter what surprises 2016 and beyond may bring.