Professional services firms used to put most of their focus on revenue and utilization—that is, capturing enough revenue to carry overhead costs such as compensation, training, and travel. This enabled them to deal with issues like long sales cycles, higher-than-expected operational costs, and challenging customer delivery.
But today, firms are under pressure to do more with fewer people. According to SPI, headcount growth dipped to 6.5 percent (compared to 16.5 percent in 2007) and has lagged behind revenue growth indicators by more than 2.4 basis points over the last five years. This is in large part due to the shortage of skilled professionals. As the report points out, “the gap between the demand for technology consulting workers and the talent with the requisite critical thinking, analytic, and communication skills to fill these roles is widening.”
By gaining insight into the capabilities, capacity, and cost of their employees, firms can redirect resources to high-value activities to ensure that the right people are serving the right clients. According to the SPI report, with this insight, leading firms have larger projects, more rigorous quality processes, and fewer project overruns and canceled projects—and credit their professional services automation (PSA) systems with improving resource, project management, and time and expense capture and billing.