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
“Subscription and managed services represented a combined 17% of service work performed.”
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Source: NetSuite, SPI
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.
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
Finance FTEs per
Source(s): SPI, Finlistics
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.
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.
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.