Business metrics are important for all types of companies and are critical to helping the organization steer clear of potential hazards. Professional Services firms have to be especially careful about which metrics they choose to guide them because focusing on the wrong ones can mean disaster.
Service based companies (consulting, advertising, legal, etc.) are especially vulnerable to fluctuating market conditions because their resources are typically people, who represent the biggest item in their budgets. When utilization rates are low, service firms are pressed to reduce their staff; but when the market picks up they may be left unable to attend to the demands of their clients. Successful service organizations are able to read their metrics and carefully plan their moves.
Key performance metrics for professional services firms include:
- Profit margin
- Billable utilization
- Win rate
- Revenue per billable resource
- Profitability per project
Knowing which metrics to track is just the first step. Being able to actually track each metric accurately is essential if the firm hopes to be able to sail through rough market waters. This is where an integrated professional services solution comes into place. Having only project management software to keep track of jobs is not enough; firms that wish to have a holistic view of their businesses must strive for complete integration between the billing, sales, and the services management aspect of their work.
While in the past it was difficult to find software that was specific for Professional Services organizations, with SAP Business ByDesign the search is over. An integrated approach to managing service-based companies, Business ByDesign comes ready to give you the tools you need to manage your projects, resources, and more.