We talk about consulting benchmarking a lot on this blog. And it’s for a good reason.
Benchmarks imply that you’re actually measuring your progress. And that’s something we can get behind.
Too often the conversation is focused on the next big buzzword or some form of technology that promises to solve all of your problems. An important conversation for sure, but if you can’t measure where you’ve been, or if you don’t truly know where your problems lie, it’s all worthless.
That’s true for any business, but for professional services firms it’s especially important. Because there are little to no physical products, everything comes down to how effectively you are able to use time. This is often measured through an organization’s utilization performance, but in reality it is an attribute of every aspect of the business. From hiring a new subject matter expert to staffing a project or invoicing for your work, it’s the balance of quality and speed that drives results.
Benchmarking for Consulting Utilization is Just the First Step
Measuring your utilization performance is just the first step, and every services firm does this in one form or another. I won’t go into the best way to measure your services firm, because we cover that in great detail on this blog. A good starting point might be our conversation on professional services dashboards, our thoughts on measuring professional services utilization, or a dive into measuring profitability of fixed price projects.
Instead, I’d rather focus on using the visibility you have into your metrics to actually make decisions and effect change. This is where benchmarks come in. Benchmarking against your historical metrics helps you understand if changes you made had an impact, and benchmarking against your peers helps you understand where you need to make those changes. That first one is easy, but that second one, not so much.
That is why every year we support the efforts of Service Performance Insight (SPI Research) in their Professional Service Maturity Model Benchmark. This is among the most comprehensive benchmarks for the professional services industry, and we think it is one of the most powerful tools a professional services firm can have—along with a great professional services automation system that is.
But time is money, so how can a busy services executive get access to industry data fast? If it hasn’t become clear yet, we’re big fans of the work SPI Research does. Every year when their benchmark comes out we spend hours reading through their analysis and digesting their data. This is important for our business because the benchmark tracks the performance of organizations using PSA software and compares them to those who don’t. This helps us measure the impact solutions like ours have on professional services firms.
After reading through this year’s benchmark, it dawned on us that there are a few key metrics that every services organization should keep close tabs on. We created a webinar about the key KPIs consultancies need to watch. Understanding leading and lagging metrics to measure can greatly improve business success and
So if you’re like us and believe that benchmarking is a great way to measure your firm’s performance, download the SPI research at the link below.
You will get instant feedback on how your firm performs compared to the average professional services firm, highlighting areas of strength and weakness. You’ll be able to view your performance across multiple different indicators including utilization performance, profitability performance, staffing performance, and delivery performance. You’ll also see how organizations using professional services automation software performed to identify opportunities to move the needle a bit in your favor. And most importantly, you’ll be able to validate your perceptions of how your firm’s performance stacks up against your peers.