Annual Revenue Per Billable Consultant

Annual revenue per billable consultant is a rough indicator of how much revenue your billable resources generate each year and the productivity of your technology services team. This number should be higher than the average fully-loaded cost of your consultants, meaning your consultants are generating more revenue than it costs to employ them. A good rule of thumb for this metric: one to two times the average consultant’s fully-loaded cost.

  • < $190,000
  • $191,000
  • $228,000
  • $265,000
40.6% SaaS PS Contracts were for Subscription or Managed Services To learn more, check out this article. (Source: NetSuite, SPI)
“Subscription and managed services represented a combined 17% of service work performed.”

To learn more, check out this article.

Source: NetSuite, SPI

Gross Margin

The only constant in the technology services industry is change. Organizations must frequently innovate to take advantage of cutting-edge technology like big data, cloud and deep analytics. With the introduction of this new technology comes the entry of new competitors, forcing companies to adapt and provide the most innovative services for clients to stay relevant. It’s important to have a view of the margins of every service you offer so that when you introduce new services, you can benchmark its impact on your business over time.

  • 22.4%
  • 37.8%
  • 50.7%
  • 63.5%

Days Sales Outstanding

Days sales outstanding represents the average time it takes a technology services organization to receive payment from its clients. Because technology service firms deal in contracts and very rarely receive payment upfront, days sales outstanding is critical in keeping constant cashflow, enabling your business to make more investments in the company. Negotiating client payment terms up front and having them outlined in the contract, identifying creditworthiness and electronic invoicing are all strategies of maintaining a lower DSO. Organizations that monitor their days sales outstanding and alert customers of overdue payments automatically typically receive more timely client payments.

  • 103 days
  • 71 days
  • 60 days
  • 48 days
Foundational
Competitive
Best in class
Transformative

Gross Margin

22.4%

37.8%

50.7%

63.5%

Gross Margin

Percentage of revenue after cost of goods sold. For a services company, gross profit is typically revenue minus professional services staffing costs. This metric signifies how efficiently your company uses its labor to deliver services profitably. The higher the percentage, the better.

Days Sales
Outstanding

103 days

71 days

60 days

48 days

Days Sales
Outstanding

How many days, on average, it takes your customers to pay invoices. Also called DSO or Days Receivable, it is a financial ratio that illustrates how your receivables are being managed. The lower this number is, the better.

Spend Under
Contract

Decentralized buying

40-60%

60-85%

> 85%

Spend Under
Contract

The percentage of procurement spend managed by a contract. Purchasing goods and services using pre-negotiated contracts typically allows for better price negotiation. The higher this percentage, the more likely that your company is saving money on goods and services.

Fill Rate

< 97%

97%

98%

99%

Fill Rate

Percentage of customer or consumption orders satisfied from stock at hand. It’s a measure of an inventory’s ability to meet demand. A higher fill rate indicates a better ability to meet sales requests, influencing higher customer satisfaction.

Annual Revenue
per Billable
Consultant

< $190,000

$191,000

$228,000

$265,000

Annual Revenue
per Billable
Consultant

This metric represents the average amount of revenue generated by a consultant. The higher the annual revenue per consultant, the better.

Customer Referenceability

< 50%

50-70%

70-90%

> 90%

Customer Referenceability

Percentage of total customer base willing to provide positive stories about a successful delivery of your products or services. This is used to create demand.

Finance FTEs per
$100M Rev

> 7 FTE

6.9 FTE

5.3 FTE

3.6 FTE

Finance FTEs per
$100M Rev

A calculation of how many FTE (Full Time Equivalent) Finance department resources are required for each $100M in revenue earned.

Source(s): SPI, Finlistics

Parameters

Foundational

Your business may just be beginning to track this metric, perform this business function or identified this as a problem. Improved execution in this area should be a high priority.

Competitive

Your business is competitive in this area, but there’s still room for advancement. Consider investments to improve related operations to achieve better results.

Best in Class

Your performance in this area is considered best in class and is superior to the average company in your sector. You’ve laid a solid foundation in this business function, and the next step is optimization.

Transformative

You’re achieving the optimal results for this metric. Your business processes in this area are highly efficient and stand out against competitors. Keep investing in this area to maintain these results.