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. This year, 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. Continue reading