The Right Professional Services Dashboard and Analytics

Highlights

  • You can't manage what you can't measure. That's why a professional services dashboard is needed to bring real-time visibility to the most important key performance indicators (KPI) and predictability to project and financial outcomes.
  • A good professional services dashboard takes a less is more approach. It focuses on fewer metrics to drive more action. Experienced project managers know that adding more measures clouds what's most important and quickly results in diminishing returns. They also know that the human brain can only comprehend up to 5 data points at a time. So, they separate the vital from the inessential and display the highest impact performance measures that are mostly likely to induce action.
  • The best information delivery permits real-time predictive modeling to show how changes in staff utilization, resource mix, billing rates, revenue leakage and other factors impact margins and profits. It's this level of reporting that shifts the dashboard value from delivering bad news too late, to delivering the foresight that prevents bad news.
Johnny Grow Revenue Growth Consulting

The goal of a professional services dashboard is to put the spotlight on the drivers that most impact project and customer success. Below is one of our ultimate dashboards that we routinely provide clients.

Professional Services Dashboard

Three things contribute to delivering the information that most impacts project performance.

First, we measure what matters, not necessarily what's easy to measure. Research from the Sales Excellence Report shows the Best-in-Class professional service organizations first identify the most powerful key performance indicators (KPIs), that is those metrics that most influence project quality, customer satisfaction and financial performance.

Second, we make the information more meaningful by putting it in context. KPI results are displayed alongside budget or target goals for real-time performance measurement, trends for directional progress and peer-based industry benchmarks for competitive context. Knowing where your business stands compared to your direct competitors provides the most revealing perspective.

Third, we make the information actionable with alert notifications, predictive analytics, drill-down analysis and links to Project Delivery Playbooks or recommended actions. The above dashboard drills down from a central view to a projects view, shown below.

Project Health Report

Data must be sourced in near real-time. Receiving project performance data weekly or monthly doesn't give managers enough time to swiftly intervene or impose course corrections while the actions can still make a difference.

Most will source the bulk of their data from the Professional Services Automation (PSA) system. CRM and ERP software systems will generally supply the rest.

Dashboard Performance Clusters

Good performance measures are neither standalone nor exist in a vacuum. For most professional service firms, the right KPIs will be grouped into the three categories of Services Delivery, Resource Management and Financial Management.

Based on our experience we've found that services delivery measures often include the below metrics:

  • Project Health (i.e., the above Projects-in-Flight dashboard)
  • Projects at Risk (also above)
  • Project Profit Margin (PPM) – by client, client type and project/solution type
  • Customer Satisfaction (CSAT), many times this is measured via Net Promoter Score (NPS)
  • Project History, with On-time, on budget project delivery and Average project time and cost overrun
  • Project Upsell Opportunities (sale opportunities identified during the project)
  • Client reference rate

Resource Management measures often include the following:

  • Staff Utilization and Realization – by role or band over prior 12 months
  • Average Billing Rate – by role or band over prior 12 months
  • Realized Rate Per Hour (RRPH) – by role or band over prior 12 months
  • Annual Non-billable Project Hours
  • Non-billable Hour Destinations (PTO, training, internal projects, bench, etc.)
  • Bench Report – by role or band over prior 24 weeks
  • Highest Grossing Staff
  • Billable vs. Non-billable Payroll – for the trailing 12 months
  • Staff Demand (from CRM pipeline) and Capacity (from PSA software) – historical and forecast
  • Training Completed – by role and resource over prior 12 months
  • Voluntary Consultant Attrition
  • Involuntary Consultant Attrition
  • Time Submit Compliance

Key Financial Management measures include:

  • Revenue Per Employee (RPE)
  • Annual Revenue per Billable Consultant – by role or band
  • Margin per Billable Consultant – by role or band
  • Revenue and Margin Growth
  • Revenue from Repeatable Services
  • Revenue Leakage – for trailing 12 months
  • Free Cash flow
  • EBITDA percentage and growth
  • Days Sales Outstanding (DSO)
  • Write-offs

Hidden Measures

A professional services technology strategy shows how KPIs in each of the above clusters interact to reveal insights that are often otherwise hidden.

For example, Revenue Leakage is the amount of time and expense that doesn't get billed but should. Most consulting or service firms don’t track this data, which is why the industry average is between 4 and 5 percent, depending upon the type of  services company. Using PSA software and services analytics managers can bring this figure to the forefront and implement actions that reduce revenue leakage and increase revenues.

Another example is realized rate per hour (RRPH). This metric is calculated by dividing the services revenue for a period by the number of productive utilization hours in that period and shows your overall efficiency. If your average contract rate is $250 but your RRPH is less than $200 it's time to figure out why and look for improvements. Most clients find the difference is to due to poor utilization, under-billing, revenue leakage or write-offs.

An interesting thing about this information delivery is that users spend less time accessing information reporting but leverage the insights to make more changes to the management and delivery processes.

That's the sign of successful reporting. If the information is causing operational changes to be made, it's working.

See the services industry dashboards that permit real-time predictive modeling to show how changes in staff utilization, billing rates, revenue leakage and other factors impact margins and profits.

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