sneak peek at the 2016 professional services benchmark ......to improve productivity standardize and...
TRANSCRIPT
Run smoothly. Change quickly. Achieve more.
Cloud-based enterprise work management software
Sneak Peek at the 2016
Professional Services
Benchmark Report from SPI
2
Agenda
1. Service Performance Insight (SPI)
2. Upland Software and Tenrox PSA
3. Question & Answer Period
3
Housekeeping
To submit a question:
Type in your
question here
Click Send
4
Today’s Speakers
Jeanne K. Urich,
Managing Director, Service Performance Insight
Neil Stolovitsky
Senior Solution Consultant, Upland Software
5
A Sneak Peek at the 2016 Professional Services Maturity™
Benchmark January 28, 2016
R. David Hofferberth, P.E. Managing Director, Service Performance Insight
6
Introduction
Service Performance Insight (SPI Research) is a global research, consulting and training organization
dedicated to help professional service organizations (PSOs) make quantum improvements in
productivity and profit. In 2007, SPI developed the PS Maturity Model™ as a strategic planning and
management framework. It is now the industry-leading performance improvement tool used by over
10,000 service and project-oriented organizations to chart their course to service excellence.
The core tenet of the PS Maturity Model™ is PSOs achieve success
through the optimization of five Service Performance Pillars™:
1. Leadership – Vision, Strategy and Culture
2. Client Relationships
3. Human Capital Alignment
4. Service Execution
5. Finance and Operations
SPI provides a unique depth of operating experience combined with unsurpassed analytic capability.
We not only diagnose areas for improvement but also provide the business value of change. We then
work collaboratively with our clients to create new management processes to transform and ignite
performance.
7
Today’s Agenda
• The Professional Services Maturity™
Benchmark
• Market Trends
• High-performing Organizations
• Take Advantage of PSA
• Conclusions & Recommendations
8
2016 Professional Services Maturity™ Benchmark
549 PSOs completed the survey in 2015
• 67% Americas
• 26% EMEA
• 7% APac
9
Success Depends on Everyone Working Together
Leadership
Confidence
Clear
Communication
Deal
Pipeline
Bid-to-win
Ratio
Client
Satisfaction
Employee
Ramping
Bill Rates
Employee
Attrition
Employee
Compensation
Project
Margin
Growth
Backlog
Overhead
EBITDA
Resource
Management
Standardized
Delivery
On-time
Delivery
1 0
Performance Maturity Matters!
Level 1
Initiated
Level 2
Piloted
Level 3
Deployed
Level 4
Institution
Level 5
Optimized
A standardized delivery methodology is used 54.3% 62.4% 67.8% 74.0% 75.0%
Effectiveness of resource management process (1-5) 3.00 3.57 3.80 4.01 4.21
Employee billable utilization 62.8% 70.0% 72.7% 78.0% 77.9%
Projects delivered on-time 64.3% 76.1% 79.6% 83.7% 88.8%
Project margin for time & materials projects 22.3% 30.6% 39.0% 40.9% 41.4%
Annual revenue per billable consultant (k) $110 $184 $231 $244 $269
Annual revenue per employee (k) $91 $137 $185 $197 $215
Earnings before Interest, Taxes, Depreciation &
Amortization (EBITDA)0.7% 3.8% 8.5% 19.1% 36.0%
1 1
2016 PS Maturity Benchmark – Many Challenges!
Stagnant growth
Stronger competition
Lower Bid-to-win
Lower Pipeline
Much higher attrition
Reduced service success
Lower on-time delivery
Lower project profitability
But….. Profit rose!
1 2
Market Dynamics
• How things can change so rapidly
2011 was about Execution
2012 is about Talent
2013 was about Profit
2014 was about Sales
2015 was Talent and Rates!
• Executives must prepare
Create loyal clients
Develop flexible workforce
Deliver on time and at high levels of quality
Improve financial security
1 3
Four Major Trends Impacting Performance & Profit
5.21 5.19
4.96 4.92
4.95
4.75
4.80
4.85
4.90
4.95
5.00
5.05
5.10
5.15
5.20
5.25
2011 2012 2013 2014 2015
Year
Bid-to-win ratio
13.7%
11.5%
10.0% 10.0% 10.2%
8%
9%
10%
11%
12%
13%
14%
15%
2011 2012 2013 2014 2015
Year
Revenue Growth
7.4% 7.2%
8.3%8.9%
12.9%
4%
6%
8%
10%
12%
14%
2011 2012 2013 2014 2015
Year
Attrition
203%
193% 190%
199%
172%
140%
150%
160%
170%
180%
190%
200%
210%
2011 2012 2013 2014 2015
Year
Pipeline
1 4
Profit Heads Upward
13.5%
16.8%
11.4%
13.2%
15.5%
0%
2%
4%
6%
8%
10%
12%
14%
16%
18%
2011 2012 2013 2014 2015
Year
Earnings before Interest, Taxes, Depreciation & Amortization
1 5
2016 Planned Steps Taken to Improve Profitability
Steps Taken to Improve Profitability 2013 2014 2015
Increases rates 2.83 2.90 3.85
Improve hiring and ramping 3.51 3.48 3.85
Improve methods and tools 3.69 3.60 3.85
Reduce non-billable time 3.34 3.26 3.83
Improve solution portfolio 3.59 3.59 3.78
Improve sales effectiveness 3.92 3.94 3.78
Improve utilization 3.71 3.85 3.78
Improve marketing effectiveness 3.68 3.65 3.52
1 6
Get the red out of service delivery!
Service Execution Performance Indicator Consultants RusPeer
Average
Survey
AverageLevel 1 Level 2 Level 3 Level 4 Level 5
Average project staffing time (days) Over 20 days 10.1 10.9
Concurrent projects managed by PM 3 - 5 5.23 5.76
Average project staff (people) 3 - 5 4.33 4.78
Average project duration (months) 3 - 6 5.13 6.26
Projects delivered on-time Under 40% 77.3% 76.2%
Projects canceled 0% - 1% 1.8% 2.7%
Average project overrun 0% - 5% 8.9% 10.1%
A standardized delivery methodology is used 60% - 80% 70.0% 64.9%
Effectiveness of resource management process 1 3.63 3.60
Effectiveness of estimating processes and reviews 2 3.55 3.59
Effectiveness of change control processes 1 3.55 3.49
Effectiveness of project quality processes 3 3.55 3.61
Effectiveness of knowledge management processes 3 3.38 3.44
Annual revenue per billable consultant (k) $150k - $200k $193 $185
Annual revenue per employee (k) $100k - $150k $164 $166
EBITDA -5.0% 11.9% 9.9%
1 7
High-performing
Organizations Perform!549 organizations
Key Performance Indicator (KPI) Top 20% Others ▲
YoY change in PS revenue 18.1% 8.2% 122%
Use of a standardized delivery meth. 74.7% 61.8% 21%
Employee billable utilization 75.7% 69.2% 9%
Projects delivered on-time 83.2% 74.2% 12%
Ann. revenue/billable consultant (k) $253 $182 39%
Project Margin 42.8% 30.6% 40%
Profit (EBITDA) 20.3% 13.0% 56%
1 8
Professional Services Maturity
Lack of specific
focus, heroic people,
Manual systems
Leverage information
across the entire PSO
on a real-time basis to
continually improve
Introduce business processes,
begin to specialize, add systems
to improve productivity
Standardize and
refine business
processes,
integrate systems
Business processes in
alignment across PSO, All
major systems are integrated
1 9
Use PSA Across the Organization
Determine the services with the highest potential for growth & profit
Plan Optimally
Sell services with available skill sets, price to optimize revenue and profit
Increase Sales
Focus on skills in demand, develop compensation & training
to minimize attritionOptimize Talent
Efficiently manage resources, projects, time, quality and cost
Deliver Efficiently & Effectively
Manage invoicing and Days Sales Outstanding (DSO)
Maximize Profit
2 0
PSA drives service delivery
performance higher
Key Performance Indicator (KPI) With
PSA
W/o
PSA▲
Concurrent projects managed by PM 5.94 5.23 14%
Average project staff (people) 4.74 4.43 7%
Average project duration (months) 6.21 6.02 3%
Projects delivered on-time 76.4% 74.3% 3%
Projects canceled 2.6% 2.7% 5%
Use a standardized delivery meth. 65.3% 61.5% 6%
Service Delivery Effectiveness 17.7 16.9 5%
2 1
PSA also improves Talent
Management……
Key Performance Indicator (KPI) With
PSA
W/o
PSA▲
Management to employee ratio 11.6 11.0 5%
Days to recruit and hire for standard
positions59.7 63.8 6%
Guaranteed annual training days per
employee9.23 7.63 21%
Well-understood career path for all
employees3.32 3.15 6%
Employee billable utilization 71.3% 67.3% 6%
2 2
….Most executives like
PSA’s impact on financial
performance
Key Performance Indicator (KPI) With
PSA
W/o
PSA▲
Year-over-year change in PS
revenue11.2% 6.3% 78%
Ann. revenue per billable consultant
(k)$199 $191 4%
Ann. revenue per employee (k) $159 $147 8%
Average revenue per project (k) $230 $188 22%
Profit (EBITDA) 15.9% 12.8% 25%
2 3
PSA Integration
Client Relationship
Management (CRM)
Human Capital
Management (HCM)
Enterprise Resource
Planning (ERP)
Professional Services Automation (PSA)
Business Intelligence (BI)
• Map client needs
• Up-sell / cross-sell potential
• Optimize selling price
• Build pipeline
• Improve client satisfaction
• Optimize resource pool
• Manage employee cost
• Dev. compensation structure
• Improve employee development
• Reduce staffing cost
• Forecast revenue
• Manage cash flow
• Improve DSO
• Improve margins
• Manage all practices
• Analyze processes & build strategy
• Determine “optimal” services, clients, etc.
• Exploit strategic advantage
• Focus on organizational improvement
2 4
The Value of Integrated PSA
Deal pipeline relative to qtr.
bookings forecast144% 169% 182%
Annual revenue per employee (k) $147 $153 $158
67.3%Employee Billable Utilization 68.7% 72.1%
Profit (EBITDA) 12.8% 13.4% 14.6%
% of employees billable or
chargeable63.7% 70.8% 72.1%
2 5
Conclusions & Recommendations
• Understand market dynamics and assess
your competitive position
• Develop services that align with vision ands
personnel
• Find, hire and RETAIN key employees
• Improve & standardize business processes to
deliver efficiently and effectively with an eye
toward quality and client satisfaction
• Manage all costs and revenue accurately
• Take advantage of integrated technology
solutions to improve performance and
profit!
2 6
SPISPIResearchResearch
People
People
Pro
cess
Pro
cess
CapitalCapital
Service Performance Insight®
Accelerate Service Productivity & Profit™
Follow us on:
www.SPIresearch.com
UPLAND SOFTWARE
TENROX PSA
2 8
+ Leading provider of cloud-based Enterprise Work Management software
+ Supporting over 1,600 customers and 225,000 global users
+ IPO in 2014
+ Headquartered in Austin, Texas
OVERVIEW
2 9
WHAT WE DO
We provide Cloud Solutions across the enterprise
enabling amazing customer outcomes in:
+ PROJECT & IT
FINANCIAL
MANAGEMENT
+ WORKFLOW
AUTOMATION
+ DIGITAL
ENGAGEMENT
3 0
PROJECT & IT FINANCIAL
MANAGEMENT
WORKFLOW
AUTOMATION
DIGITAL
ENGAGEMENT
UPLAND PRODUCT FAMILY
Manage your organization’s
projects, professional
workforce and IT costs.
Real time productivity optimization,
collaboration, and functional
automation across your
organization’s value chain.
Effectively engage with
your customers, prospects
and community via the
web and mobile
technologies.
TENROX PSA
3 2
Tenrox
Partnerships Showcase ClientsCorporate Profile
Customer Success Mobile Thought Leadership
Market Innovator
Best practices
Pitfalls to avoid
Keeping it simple
Key Differentiators Partnerships
97% client retention rate
320,000+ users
1600+ clients
50+ countries
We wrote the book on PSA
20 Years of Enterprise Market
Leadership
Visual workflow-driven
architecture
Unique Timesheet Template
Designer
Numerous certified connectors
to back office systems
3 3
PSA Solution Overview
3 4
Dashboards at Your Fingertips
Dashboards Ad hoc Reporting
100+ to choose
from
Cover all aspects of
the solution
Microsoft SSRS
technology
Real-time
OLAP
Pivot tables and charts
No coding required
Refreshed nightly
Pre-canned Reports Analytics
Ad hoc tables
and charts
No coding required
Real-time
Role-based
Real-time web
parts
Include any of
the other reports
DEMO
3 6
Tenrox PSA Quick Wins
• Streamline project visibility
• Central project repository to better manage
projects; manage 14% more projects
• Improve employee billable utilization by 6%
• Increase average revenue per project by 22%
3 7
SPISPIResearchResearch
People
People
Pro
cess
Pro
cess
CapitalCapital
3 8
Contact Us:
Phone:– Direct: 450-688-3444
– Toll free (US and Canada): 855-944-PLAN (7526)
Email: [email protected]
Website: www.tenrox.com
Connect with us:
@tenrox
Tenrox
Company: Tenrox