As an IT professional services firm, keeping critical information up to date is essential to your success. In today’s fast-paced business environment, it is important to have a clear understanding of your company’s performance and profitability. By tracking key performance indicators (KPIs), you can make informed decisions, forecast profitability, and stay ahead of the competition. In this article, we will discuss the KPIs that are critical to the success of IT professional services firms.
Average Hourly Rate
One of the most important KPIs for IT professional services firms is the average hourly rate. This metric is essential to understanding your pricing strategy and rate progression. If you charge a fixed rate, it is important to ensure that you are making a profit on your projects and that your hourly rate is competitive. By tracking your average hourly rate, you can determine if you are moving in the right direction to achieve better margins.
The next important KPI to track is margins. After paying your consultants and covering all miscellaneous expenses, it is important to determine if you are making a profit. Tracking both gross and net margins will help you make informed decisions about pricing and resource allocation. Sales and resourcing data should be tracked in real-time, while financial data should be no older than a week.
Client satisfaction is another critical KPI for IT professional services firms. While it can be difficult to send surveys to clients after every project, it is important to know how they feel about your services. Client feedback is an excellent way to identify areas for improvement and ensure that you are delivering high-quality services. Additionally, satisfied clients are more likely to provide referrals and repeat business.
Maintaining existing relationships and acquiring new clients is essential to the success of IT professional services firms. It is important to track lead generation to determine which platforms are most effective at bringing in new clients. Additionally, tracking the number of offers sent, their value, and the number of clients closed per month will help you improve your client acquisition process and increase conversion rates.
Assignment and Skills Allocation
Measuring utilization, resource allocation, and skills are basic KPIs for IT professional services firms. Knowing how you use your resources and at what levels is essential to forecasting future utilization levels more accurately. A low utilization rate means that you are losing money, so it is important to track consultant “bench times” and assign someone to help manage assignments and skills allocation.
Measuring recruitment levels is critical to improving your hiring rates and ensuring the success of new hires. By tracking recruitment levels, you can spend less time on “trial and error” and make better hires.
Employee Engagement and Satisfaction
Finally, it is important to track employee engagement and satisfaction. Your employees are your company’s most valuable asset, so it is essential to ensure that they are engaged and satisfied with their work. Weekly or monthly feedback from your team can provide valuable insights into bottlenecks and help you make informed decisions about how to improve employee engagement. Additionally, tracking the improvement of their skills is important in IT consulting, as your skills matrix matters, and having an up-to-date skills inventory is essential as you accept more projects.
In conclusion, keeping critical information up to date is essential for the success of IT professional services firms. By tracking KPIs such as average hourly rate, margins, client satisfaction, client acquisition, assignment and skills allocation, recruitment levels, and employee engagement and satisfaction, you can make informed decisions and achieve strategic goals. Remember, rear-view mirror accounting is of no use to anyone but an accountant, so stay ahead of the curve by tracking your KPIs in real-time.