3 Mistakes Most IT Business Make
•Download as PPTX, PDF•
0 likes•196 views
Managing profit margins and more. Presented by Frank Coker, CEO of Corelytics and Finance Professor at Univeristy of Washington ischool
Recommended
More Related Content
What's hot
What's hot (13)
Viewers also liked
Similar to 3 Mistakes Most IT Business Make
Similar to 3 Mistakes Most IT Business Make (20)
Recently uploaded
Recently uploaded (20)
3 Mistakes Most IT Business Make
- 1. Presented by: Frank Coker, CMC, MBA CEO CoreConnex, Inc. Producer of the CorelyticsTM Financial Dashboard Top 3 Mistakes Most IT Businesses Make Managing Profit Margins and More…
- 2. Agenda • Business Stages • Models & Trends • Top 3 Mistakes • Management Tips • Q&A
- 3. What road is your company on? How do you manage?
- 5. Lifestyle Personal freedoms • Primarily T&M • Some fixed fee • Personal management • Income, expenses & cash
- 6. Start Up Build, build, build! • Multiple LOBs • Contracts • Develop Management skills • Growth
- 7. Experienced Team Develop rhythm • Client Portfolio • Client service #1 • Line managers • EBITDA
- 8. Building for Exit The right fit • Succession • Most optimal value with smoothest transition • Valuation
- 9. Different models, different style Trends • MSPs - the lure of recurring revenues • Blended services complex to manage, higher profits - Taken from Corelytics Industry Performance Report February 2011
- 10. Believe the hype about RMM software Trends 49% more profitable if installed in more than 72% of clients - Taken from Corelytics RMM Industry Performance Report June 2011
- 11. Top 9 Key Financial Metrics 1. Revenue 2. Margins 3. Profit 4. Rev./Billable FTE 5. Expense/Billable FTE 6. EBITDA 7. Marketing Expense 8. Sale Expense 9. Gross Margin
- 12. Key Financial Metrics By LOB Understand… … revenues by LOB … cost structure of each LOB … how billable staff are contributing / consuming … EBITDA: operating profitability … are expenses for marketing/sales generating results
- 13. It’s a Management Solution
- 14. #3: Lack of Clarity of Business Model Have consistency • Predominant ® Business Model (PBM®) – Managed Services – Product Resell – Project – 7 others… • Variations – Sell – Manage http://support.coreconnex.com/corelytics/define-pbm – Support
- 15. Types of Gross Margin How do you Flat Fee Less hours x optimize? Rate per hour - Cost per hour T&M More hours x Rate per hour - Cost per hour Product Price determined by market - Cost determined by vendor
- 16. Solution • Know your business model • Know what to optimize • Optimize each Line-of-Business (LOB)
- 17. #2: Unable to Articulate Financial Goals Pick a target • Pick your goals – Growth – Percent of Revenue • Track benchmarks for your model • Forecast performance – Know best and worst case scenarios
- 18. Solution • Set goals for financial performance – Company-wide – By LOB • Communicate goals – show the picture!
- 19. # 1: No Management Process • Link operational priorities to financial metrics you track • Assign ownership (this may be you!) • Visibility of business performance
- 20. 30 Minutes a Month
- 21. Management Tips
Editor's Notes
- Frank Coker has specialized in management consulting, business development and information systems technologies for more than 30 years. Frank is a Certified Management Consultant (CMC).Frank launched CoreConnex, Inc. in 2005 with Co-founder Tony Lael with the goal of creating a company that provides business resources to the IT solution provider market. CoreConnex began as a consulting firm to IT solution providers and then launched a Professional Services Automation product for IT solution providers followed by a financial dashboard product, the Corelytics Financial Dashboard. CoreConnex has sold off its PSA line of business in 2009 and is focused on building its financial dashboard business through partnerships with leading companies in the IT services market.
- F: “So it pays to know your types of gross margin and how they work.”