Services organizations depend on team collaboration for success.
Between connecting the Services team members themselves, to cross-departmental collaboration with other teams in the organization (Sales, Support, Accounting, etc.), to ongoing communication with the client, there is no shortage of people that need visibility into a project and its status.
A Professional Services Automation (PSA) software with functionality that fosters team collaboration can make it easier for Services organizations to support open communication with internal and external stakeholders throughout the entire lifecycle of a project.
Communication Among The Services Team Members
Services teams need to communicate and collaborate amongst themselves in order to manage projects efficiently and effectively.
PSA software offers features that make it simple for Services teams to create visibility within their department and increase communication. Some of these features include project management, resource planning, and time and expense management. A sophisticated Gantt chart with functionality including full inline editing, rapid task creation, drag-drop of task sequence, quick predecessor creation by wbs or task name, task scheduling directly from the Gantt, configurable columns display, split-pane, and much more deliver an exceptional experience for managing projects and ensuring teams are on the same page when it comes to project deadlines.
In addition, choosing a PSA solution that integrates with the tools that organizations are already using to communicate can drastically improve team collaboration. Integration with Slack for example, is becoming increasingly important for organizations selecting a PSA software, because it allows teams to manage projects and services directly from within Slack. A PSA like Klient Software, for instance, allows users to view projects and tasks, drill into project and task details including project profitability and financials, create new project and tasks, as well as enter time worked against projects and tasks directly from within Slack.
Communication Across Departments
The most successful services organizations also work hard to improve communication across various departments within the business. Repeatable project delivery success relies on close collaboration between the sales team, the project delivery organization, the finance function and the client. PSA provides a single, trusted platform to manage deal scoping, deliver projects and track financials that improves outcomes for all parties and builds stronger customer relationships.
A PSA built on Salesforce, for example, can boost communication and transparency between your Sales and Services teams. This can drastically improve project scoping and estimating. And, by integrating with various accounting and ERP applications, a PSA software can succeed in aligning the accounting department with sales and services as well.
Communication With The Client
Perhaps most importantly, communication with the client is imperative to driving repeat business and creating long-term customer relationships.
PSA software enables better client collaboration throughout the life of an engagement, significantly improving the likelihood of the project being delivered in line with customer expectations. PSA formalizes the process of engaging the services team in the sales cycle, which promotes confidence on both sides that the project will be delivered as sold. During the delivery of the project, customer communication can take place in real-time, quickly resolving issues as they arise.
Krow Software, recently announced survey functionality for their PSA solution which goes a step further in fostering collaboration between the project team and the client. With Krow PSA, you can now create and deliver project and customer surveys including NPS, CSAT, or free-form surveys to analyze client feedback and sentiment, learn from project engagements, and help build long-term customer advocacy to increase retention and expanding selling.
Why A Customer-Centric PSA Is Best For Team Collaboration
A Customer-Centric PSA is designed with customers at the core, providing a way for project teams to work with each other, and hand-in-hand with customers from sales through service delivery.
Klient PSA offers a modern and seamless customer experience, fully transparent communication between the project team and client to ensure alignment of expectations with real-time two-way communication, integrated customer feedback through survey tools and project health check statuses, and real-time integration with back-office systems for more successful project implementation and greater customer success.
The most mature professional services organizations and the ones who consistently deliver successful projects and foster long-term customer relationships, are those that offer high levels of organizational visibility across departments, have optimized business processes and integrated systems, focus on profit improvements, and have moved away from a one-time project focus to an increased emphasis on delivering great customer experiences for life.
These organizations have largely accomplished this by tracking 5 important and influential metrics for the professional services market. These metrics are not only imperative to a profitable business, but also critical in keeping customers happy through improved service delivery experiences. We recommend that all organizations who deliver projects to clients, start tracking these 5 key metrics immediately if you aren’t already:
1. Annual Revenue per Billable Consultant
Annual Revenue per Billable Consultant is a measure of a business’s total revenue divided by the number of billable consultants they employ. Understanding how much revenue each consultant is producing is a key indicator of financial success as well as consultant productivity, but it must be assessed in relation to labor costs. Revenue per billable consultant should ideally equal one- to two-times the labor costs of employing each consultant. Organizations with high annual revenue per billable consultant tend to do well because higher rates indicate better consultant productivity with respect to larger projects, more revenue in backlog, as well as more on-time and on-budget completions.
Tracking consultant productivity is key to improving customer success because you will have greater insight into when and how you should better utilize your consultants in order to improve their productivity and speed up project timelines and delivery.
2. Annual Revenue per Employee
Another core metric, Annual Revenue per Employee, is measured by dividing total revenue by the total number of both billable and non-billable employees. Similar to annual revenue per billable consultant, high annual revenue per employee is strongly correlated with profitability and efficiency. By measuring how much revenue each employee brings in relative to how much they cost, you can accurately determine the financial health of an organization. While not everyone on staff can provide billable services, it is important to be aware of the risks of too many overhead costs in relation to revenue per employee.
This metric can also be important for professional services organizations hoping to optimize business processes because business leaders can see departments where they may be spending too much money on employees, and can better re-allocate budgets to hire employees in areas that will make the business more successful. A successful business is one that has the right number of employees in each department in order to successfully manage client expectations and provide the support necessary to maintain loyal customers for life.
3. Billable Utilization
Employee utilization is defined by SPI Research on a 2,000 hour per year basis, and is calculated by dividing the total billable hours by 2,000. Utilization is central to accurately determining organizational profitability, as well as a key signal to expand or contract the workforce. By tracking work hours for billable employees, an organization can get a better picture of workforce productivity.
Your utilization rate tells you how much of your employees’ available time is spent on billable work. If this rate is too high, you likely need to add more resources. Too low and it means that you’re not bringing in enough work.
Tracking this metric can help you improve customer success because overworked employees are often tired, unhappy employees, and may even become so rundown that they are unable to perform to the best of their ability. On the other hand, underworked employees may become bored or uninterested in their work which can also affect the quality of the work they deliver. Both of these circumstances can be damaging to your organization’s reputation if the work your employees are performing does not measure up to customer expectations.
4. Project Overrun
Project overrun is the percentage above budgeted cost versus the actual cost of a project. This KPI is important because anytime a project goes over budget in either time or cost; it cuts directly into profitability. Whether a project goes over in either budget or allotted person-hours, it can limit future work and in many cases reveal internal efficiency or management issues, which also negatively impact bottom-line results. Project overruns are also detrimental to client satisfaction and even incoming sales opportunities.
By tracking project overrun, you can identify which projects are consistently going over budget, and identify ways to improve internal efficiency in order to manage projects better and stay on schedule. This will greatly improve your number of projects delivered on time, on budget, and to your customers satisfaction.
5. Profit Margin
Profit margin is the percentage of revenue which remains after paying for the direct costs of completing a project. Keeping profit margins high is essential as it ultimately drives overall revenue. Poor financial performance can often be directly correlated to low profit margins, as organizations are no longer able to invest in future growth activities.
An organization that has revenue to invest in the future growth of the company is one that can remain innovative, continuously enhance and improve their product or service, and foster long-term relationships with their customers. Tracking profit margin is therefore crucial to the ongoing success of a professional services organization.