Benchmark reveals net profits for technology professional services deteriorated in 2013
Hardest hit were embedded
Here are the highlights from this year’s benchmark:
Slowing revenue growth. The leading indicators for growth — annual revenue growth, headcount increases, size of the deal pipeline and backlog — all plummeted in 2013 to the lowest levels since 2009. Year-over-year revenue growth slowed from the previous year’s 11.5 to 10 percent in 2013.
Declining bill rates. Professional services organizations experienced a nosedive in rates with embedded cloud, hardware and IT consultancies dragging down prices. Marketing / communication and management consulting rates increased reflecting the strong demand for social, strategy and specialized business process consulting.
Too much overhead. Because PSOs added management overhead in anticipation of growth that didn’t materialize, the percentage of billable staff compared to total staff plunged for the first time since 2009. Excessive non-billable staff combined with declining bill rates resulted in the lowest annual revenue per person since 2007 at
This benchmark report for PSOs provides insights into information that’s typically confidential, such as detailed bill rates and compensation by role, industry and geography.
The 184-page report analyzes 198 key performance metrics and includes 227 supporting charts and graphs. It describes income statements and expense ratios for eight PS vertical markets such as advertising/marketing, architecture/engineering, IT consulting, management consulting, software,
The annual benchmark from Service Performance Insight draws on a database of 1,500 PS organizations providing in-depth analysis of PS metrics and performance. 238 companies representing more than 60,000 consultants worldwide provided input for the 2013 report. Purchase the
“I look forward to participating and receiving this report every year.
About Service Performance Insight
Service Performance Insightis a global research, consulting and training organization dedicated to helping professional service organizations make quantum improvements in productivity and profit. In 2007, SPI developed the PS Maturity Model as a strategic planning and management framework. It is the industry-leading performance improvement tool used by over 10,000 service and project-oriented organizations to chart their course to services excellence.
Source: SPI Research
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