Service Performance Insight
Accelerate Service Productivity & Profit

Take a Huge STEP Forward in 2014
Align your organiza...
Agenda
 Introductions
 About Planview
 Service Performance Insight’s
PS Maturity Benchmark Results:

Take a Huge STEP F...
Presenters
Dave Hofferberth
Founder and Managing Director, SPI Research
 15 years as the leading analyst and consultant o...
About Planview

Optimize the Core of Your Business
Build an Integrated
Strategy and
Execution Plan

Maximize Opportunity
w...
About Planview

Portfolio Solutions for the Enterprise
Boost Your
Product Pipeline

Elevate Your
Business Impact

Optimize...
Planview’s

Service Resource Planning (SRP) Solution

See in action: planview.com/SRPDemo| Get the research: planview.com/...
Service Performance Insight
Accelerate Service Productivity & Profit

Take a Huge STEP Forward in 2014
Align your organiza...
Introduction
Service Performance Insight (SPI) is a global research, consulting and training organization dedicated to hel...
Professional Services Maturity™ Benchmark
238 PSOs completed the survey in 2013

74% North America
18% Europe
8% APAC

Acc...
Maturity Matters!
238 PSOs
Level 1

Level 2

Level 3

Level 4

Level 5

Initiated

Piloted

Deployed

Institution.

Optimi...
Market Dynamics
How things can change so
rapidly
2010 was about Sales
2011 was about Execution
2012 is about Talent
2013 w...
14%

11.5%

18%
10%

10.0%

8%

7.6%

16%
6%

16.1%

0%

12%

2009

2010

2011
Year

2012

13.5%

5.30

5.20

5.19

5.00
4...
Focus on Profit
IT
Consulting

Management
Consulting

Improve sales effectiveness

3.92

4.10

4.10

Improve billable util...
STEP Forward

Sell – Focus on high profit/margin
services

Talent – Develop and maintain
quality individuals

Execute – De...
Sell – Focus on high profit/margin services
Sell & Bid

Deliver

Bill & Collect

Interoperability

• Sales forecast
• Sale...
Manage Talent
Limited resource pool
What skills are needed?
3 months to find and hire
3-6 months to train and ramp

Manage...
Execute – Deliver efficiently and effectively

Standardize delivery
Build repeatable
processes

Watch this presentation wi...
Profit – Optimize cash flow and
maximize profit
KPI

Top
20%

Rest

▲

Annual revenue per
billable consultant (k)

$231

$...
Focus on Service Delivery

• Charter
• Portfolio
• Alignment

• Differentiation
• Pricing
• Satisfaction
Resources
Process...
20

www.spiresearch.com

s
ss
ce
Pro

Copyright:Service Performance Insight | Get the research: planview.com/psmaturity

P...
Repeatable processes improve delivery
Percentage of the time a standardized delivery is used
>80%

<80%

Annual revenue pe...
Improve Project Management

22

www.spiresearch.com

s
ss
ce
Pro

Copyright:Service Performance Insight | Get the research...
Manage Scope Creep
Start with an agreement of the
deliverables
Deliverables has specific tasks
Use major and minor milesto...
Utilization improves financial performance
Workforce Utilization
35%

HR must be closely
involved to assure the
proper res...
The Benefits of Integrated SRP

67.8%

70.8%

73.5%

Project Margin

35.8%

37.6%

37.9%

Revenue per Consultant

$192k

$...
Recommendations & Conclusions
The market is tightening, but
you can prosper
Focus on improving every
aspect of your organi...
Planview’s Quick Takeaways
Perspective on the 2014 PS Maturity Benchmark’s Findings

Watch this presentation with audio
Go...
The Benefits of Integrated SRP

 Real improvement

Planview SRP Product Demo

 Scalable improvement

Planview.com/SRPDem...
Prioritizing Improvements
Survey Participant’s Priorities
According to SPI Research

Planview’s SRP Solution Offering

Pla...
Prioritizing Improvements
Survey Participant’s Priorities
According to SPI Research

Planview’s SRP Solution Offering

Pla...
Questions?

Watch this presentation with audio
Go to: planview.com/watch-psmaturity
Additional Resources


Get the PS Maturity Benchmark at planview.com/psmaturity



Reach out to Planview or send questio...
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2014 PS Maturity Benchmark Study Results by SPI Research

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Service Performance Insight (SPI Research) discusses their latest findings of the lauded PS Maturity Benchmark designed for service organizations seeking to know:

* How to measure against the latest industry metrics
* The industry data needed to support corporate strategy
* A way to objectively quantify an organization's strengths and weaknesses to create an actionable business plan
* Where to invest in order to yield the highest impact

By comparing process maturity and Key Performance Indicators (KPIs) of over 230 participating organizations with the cumulative information provided by seven years of this annual, benchmarking report; webcast participants will walk away with a current state of professional services and a roadmap for process and program improvements.

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2014 PS Maturity Benchmark Study Results by SPI Research

  1. 1. Service Performance Insight Accelerate Service Productivity & Profit Take a Huge STEP Forward in 2014 Align your organization to improve performance and profit February 18, 2014 Brought to you by Prepared by R. David Hofferberth Managing Director Service Performance Insight Copyright © 2014 Service Performance Insight, LLC All Rights Reserved. Not for Distribution.
  2. 2. Agenda  Introductions  About Planview  Service Performance Insight’s PS Maturity Benchmark Results: Take a Huge STEP Forward in 2014  Planview’s Quick Takeaways  Questions and Answers Watch this presentation with audio Go to: planview.com/watch-psmaturity See in action: planview.com/SRPDemo| Get the research: planview.com/psmaturity
  3. 3. Presenters Dave Hofferberth Founder and Managing Director, SPI Research  15 years as the leading analyst and consultant of Independent Software Vendors (ISVs) and Professional Services Organizations (PSOs)  Lead researcher and founder of these key tools  The annual PS Maturity Benchmark®  PS Maturity Model™  Five Service Performance Pillars™ of organizational maturity Steve Beaumont SRP Solution Marketing Manager, Planview  25-years experience as a management consultant with Deloitte, Coopers & Lybrand, and E&Y and working in the Software Industry  Currently owns the client-perspective for the Planview Services Resource Planning (SRP) technology solution See in action: planview.com/SRPDemo| Get the research: planview.com/psmaturity
  4. 4. About Planview Optimize the Core of Your Business Build an Integrated Strategy and Execution Plan Maximize Opportunity with Constrained Resources Strategy Measure  Results In Real‐Time Improve Agility  and Capacity to Innovate Operations Financials See in action: planview.com/SRPDemo| Get the research: planview.com/psmaturity
  5. 5. About Planview Portfolio Solutions for the Enterprise Boost Your Product Pipeline Elevate Your Business Impact Optimize Your Services Business Product Development Information Technology Professional Services Advance Your Strategic Business Planning Finance presentation with audio Sharpen Your Marketing Execution Watch this Marketing Go to: planview.com/watch-psmaturity Optimize Resources Enterprise‐Wide See in action: planview.com/SRPDemo| Get the research: planview.com/psmaturity EPMO
  6. 6. Planview’s Service Resource Planning (SRP) Solution See in action: planview.com/SRPDemo| Get the research: planview.com/psmaturity
  7. 7. Service Performance Insight Accelerate Service Productivity & Profit Take a Huge STEP Forward in 2014 Align your organization to improve performance and profit February 18, 2014 Prepared by Watch thisto you by Brought presentation with audio Go to: planview.com/watch-psmaturity Copyright © 2014 Service Performance Insight, LLC www.spiresearch.com All Rights Reserved. Not for Distribution. s ss ce Pro Copyright:Service Performance Insight | Get the research: planview.com/psmaturity Pe op le R. David Hofferberth Managing Director Service Performance Insight
  8. 8. Introduction Service Performance Insight (SPI) is a global research, consulting and training organization dedicated to help professional service organizations (PSOs) make quantum improvements in productivity and profit. In 2007, SPI developed the PS Maturity Model™ as a strategic planning and management framework. It is now the industry-leading performance improvement tool used by over 6,000 service and project-oriented organizations to chart their course to service excellence. The core tenet of the PS Maturity Model™ is PSOs achieve success through the optimization of five Service Performance Pillars™: 1. Leadership – Vision, Strategy and Culture 2. Client Relationships 3. Human Capital Alignment 4. Service Execution 5. Finance and Operations 8 www.spiresearch.com s ss ce Pro Copyright:Service Performance Insight | Get the research: planview.com/psmaturity Pe op le SPI provides a unique depth of operating experience combined with unsurpassed analytic capability. We not only diagnose areas for improvement but also provide the business value of change. We then work collaboratively with our clients to create new management processes to transform and ignite performance.
  9. 9. Professional Services Maturity™ Benchmark 238 PSOs completed the survey in 2013 74% North America 18% Europe 8% APAC Accounting PS within HW & Networking Architecture/Engineering Market Advertising (Marcom) PS within SaaS company Other PS Management Consulting PS within Software company IT Consulting 0% 20% 40% 60% 9 www.spiresearch.com s ss ce Pro Copyright:Service Performance Insight | Get the research: planview.com/psmaturity Pe op le Percentage of Observations
  10. 10. Maturity Matters! 238 PSOs Level 1 Level 2 Level 3 Level 4 Level 5 Initiated Piloted Deployed Institution. Optimized 3.57 3.64 3.93 4.33 4.38 Bid-to-win ratio (per 10 bids) 4.05 5.24 5.00 5.32 6.88 Referenceable Clients 68.2% 71.4% 76.9% 81.9% 84.6% Employee billable utilization 61.4% 69.6% 72.7% 74.4% 78.1% Projects delivered on-time 73.0% 76.1% 79.9% 79.6% 85.8% $115 $165 $222 $258 $281 27.6% 40.0% 49.2% 62.1% 64.2% 3.8% 9.2% 9.7% 18.5% 22.5% Annual revenue per billable consultant (k) Quarterly revenue target in backlog Earnings before Income Taxes, Depreciation & Amortization (EBITDA) 10 www.spiresearch.com s ss ce Pro Copyright:Service Performance Insight | Get the research: planview.com/psmaturity Pe op le Well understood vision, mission and strategy
  11. 11. Market Dynamics How things can change so rapidly 2010 was about Sales 2011 was about Execution 2012 is about Talent 2013 was about Profit 2014 is about taking a big STEP forward! Executives must prepare Develop flexible workforce Create loyal clients Improve financial security Monitor and manage leading indicators! The PS Market is dynamic Watch this presentation with audio Go to: planview.com/watch-psmaturity 11 www.spiresearch.com s ss ce Pro Copyright:Service Performance Insight | Get the research: planview.com/psmaturity Pe op le Globalization Mergers & Acquisitions Talent Cliff Client Sophistication
  12. 12. 14% 11.5% 18% 10% 10.0% 8% 7.6% 16% 6% 16.1% 0% 12% 2009 2010 2011 Year 2012 13.5% 5.30 5.20 5.19 5.00 4.90 4.80 4.96 16.8% 4.70 2013 2009 2010 8% 2012 2013 71% 8.3% 8.0% 6% 7.5% 7.4% 7.0% 4% 2% 2011 Year 11.4% 8.5% 6.0% 5.19 5.10 10% 6.5% 5.21 7.2% 6.8% 6.1% 5.5% 5.0% 0% 2009 2010 2011 Year 2010 2012 2013 2011 70.3% 70% 69.7% 69.6% 69% Watch this presentation with audio 67.6% 67.5% Go to: planview.com/watch-psmaturity 68% 67% 66% 2012 2009 2011 Year 2013 12 2012 2013 www.spiresearch.com s ss ce Pro Copyright:Service Performance Insight | Get the research: planview.com/psmaturity 2010 Pe op le 14% 2% 3.6% Bid-to-Win (per 10 bids) 12% 4% 5.30 13.7% Employee Utilization Annual Employee Attrition EBITDA Year-over-Year change in PS Revenue Four Major Trends Impacting Profit
  13. 13. Focus on Profit IT Consulting Management Consulting Improve sales effectiveness 3.92 4.10 4.10 Improve billable utilization 3.71 3.72 3.71 Improve methods and tools 3.69 3.56 3.55 Improve marketing effectiveness 3.68 3.85 4.33 Improve solution portfolio 3.59 3.77 3.45 Improve hiring and ramping 3.51 3.60 3.50 Reduce non-billable time 3.34 3.29 3.52 Increases rates 2.83 3.35 2.65 13 www.spiresearch.com s ss ce Pro Copyright:Service Performance Insight | Get the research: planview.com/psmaturity Pe op le Survey Steps to improve profitability
  14. 14. STEP Forward Sell – Focus on high profit/margin services Talent – Develop and maintain quality individuals Execute – Deliver efficiently and effectively to optimize cash flow and maximize profit Watch this presentation with audio Go to: planview.com/watch-psmaturity 14 www.spiresearch.com s ss ce Pro Copyright:Service Performance Insight | Get the research: planview.com/psmaturity Pe op le Profit – Run the business
  15. 15. Sell – Focus on high profit/margin services Sell & Bid Deliver Bill & Collect Interoperability • Sales forecast • Sales opportunities • Sales pipeline • Service pricing • Potential skills required • Project plan • Resource requirements • Resource availability • Schedules • Time and expenses • Project cost • Project margin • Project cost • Project revenue • Billing information • Days sales outstanding • Regulatory & shareholder reporting 15 www.spiresearch.com s ss ce Pro Copyright:Service Performance Insight | Get the research: planview.com/psmaturity Pe op le Integration
  16. 16. Manage Talent Limited resource pool What skills are needed? 3 months to find and hire 3-6 months to train and ramp Manage resources Skills Cost Availability Look forward 6-12 months 16 www.spiresearch.com s ss ce Pro Copyright:Service Performance Insight | Get the research: planview.com/psmaturity Pe op le Use CRM to forecast needs Link with SRP to staff
  17. 17. Execute – Deliver efficiently and effectively Standardize delivery Build repeatable processes Watch this presentation with audio Go to: planview.com/watch-psmaturity 17 www.spiresearch.com s ss ce Pro Copyright:Service Performance Insight | Get the research: planview.com/psmaturity Pe op le Improve project management Manage scope creep Keep your eye on billable utilization
  18. 18. Profit – Optimize cash flow and maximize profit KPI Top 20% Rest ▲ Annual revenue per billable consultant (k) $231 $182 27% Annual revenue per employee (k) $195 $144 36% Average revenue per project (k) $264 1. Build the business plan 2. Segment client base 3. Build backlog 4. Focus on larger project acquisition $169 56% 5. Capture and bill time and expense Project margin 41.9% 35.6% 18% Quarterly revenue target in backlog 56.1% 41.8% 34% 7. Examine Income Statement EBITDA 14.6% 10.3% 42% 8. Invest in systems! 18 www.spiresearch.com s ss ce Pro Copyright:Service Performance Insight | Get the research: planview.com/psmaturity Pe op le 6. Manage overhead
  19. 19. Focus on Service Delivery • Charter • Portfolio • Alignment • Differentiation • Pricing • Satisfaction Resources Process Quality Timeliness Revenue Margin Overhead Billing • Skills • Compensation • Training 19 www.spiresearch.com s ss ce Pro Copyright:Service Performance Insight | Get the research: planview.com/psmaturity Pe op le • • • •
  20. 20. 20 www.spiresearch.com s ss ce Pro Copyright:Service Performance Insight | Get the research: planview.com/psmaturity Pe op le Can you get “the Red Out”?
  21. 21. Repeatable processes improve delivery Percentage of the time a standardized delivery is used >80% <80% Annual revenue per employee (k) $173 $143 21% Average project overrun 7.4% 9.3% 20% 10.5% 9.2% 15% Projects canceled 1.8% 2.1% 14% Employee annual attrition 7.6% 8.8% 14% Project Margin 37.5% 33.3% 13% EBITDA % 11.4% 10.9% 4% Year-over-year change in PS revenue ▲ 21 www.spiresearch.com s ss ce Pro Copyright:Service Performance Insight | Get the research: planview.com/psmaturity Pe op le KPI
  22. 22. Improve Project Management 22 www.spiresearch.com s ss ce Pro Copyright:Service Performance Insight | Get the research: planview.com/psmaturity Pe op le It starts with the Project Manager Certifications are good… …but visibility and the ability to communicate, delegate and dictate are necessary Manage delivery Collaborate with Client Track time, expenses and value Insure resources are available when needed
  23. 23. Manage Scope Creep Start with an agreement of the deliverables Deliverables has specific tasks Use major and minor milestones Assign specific resources Create a clear project schedule Set up change control processes – tasks, deliverables, cost, authorization Communicate and collaborate with all parties 23 www.spiresearch.com s ss ce Pro Copyright:Service Performance Insight | Get the research: planview.com/psmaturity Pe op le There will always be some type of scope creep – be prepared
  24. 24. Utilization improves financial performance Workforce Utilization 35% HR must be closely involved to assure the proper resources are on board 25% 20% 15% Subcontracting for peaks and valleys and special skills 10% 5% 0% Under 50% - 60% - 70% - 80% - Over 50% 60% 70% 80% 90% 90% Employees must also work to remain highly utilized 24 www.spiresearch.com s ss ce Pro Copyright:Service Performance Insight | Get the research: planview.com/psmaturity Pe op le Percentage of observations 30% PSOs must have visibility out at least two quarters
  25. 25. The Benefits of Integrated SRP 67.8% 70.8% 73.5% Project Margin 35.8% 37.6% 37.9% Revenue per Consultant $192k $204k $223k 25 www.spiresearch.com s ss ce Pro Copyright:Service Performance Insight | Get the research: planview.com/psmaturity Pe op le Billable Utilization (2,000 hrs.)
  26. 26. Recommendations & Conclusions The market is tightening, but you can prosper Focus on improving every aspect of your organization Profit is driven by improving: Sales – Effective selling Talent – Hire the right people Execution – Service delivery excellence The time to STEP forward is now! Watch this presentation with audio Go to: planview.com/watch-psmaturity 26 www.spiresearch.com s ss ce Pro Copyright:Service Performance Insight | Get the research: planview.com/psmaturity Pe op le Profit – Sound financial management
  27. 27. Planview’s Quick Takeaways Perspective on the 2014 PS Maturity Benchmark’s Findings Watch this presentation with audio Go to: planview.com/watch-psmaturity
  28. 28. The Benefits of Integrated SRP  Real improvement Planview SRP Product Demo  Scalable improvement Planview.com/SRPDemo See in action: planview.com/SRPDemo| Get the research: planview.com/psmaturity
  29. 29. Prioritizing Improvements Survey Participant’s Priorities According to SPI Research Planview’s SRP Solution Offering Planview SRP Product Demo Planview.com/SRPDemo See in action: planview.com/SRPDemo| Get the research: planview.com/psmaturity
  30. 30. Prioritizing Improvements Survey Participant’s Priorities According to SPI Research Planview’s SRP Solution Offering Planview SRP Product Demo Planview.com/SRPDemo See in action: planview.com/SRPDemo| Get the research: planview.com/psmaturity
  31. 31. Questions? Watch this presentation with audio Go to: planview.com/watch-psmaturity
  32. 32. Additional Resources  Get the PS Maturity Benchmark at planview.com/psmaturity  Reach out to Planview or send questions to market@planview.com  Join us for a 30-minute Planview Services Resource Planning (SRP) product demonstration Planview.com/SRPDemo  Contact Service Performance Insight at SPIResearch.com
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