Boost Project Margins in the Professional Service Industry
In the highly competitive professional service industry, with over 25 million firms globally, the difference between being at the top and blending in with the rest is often a matter of decimal points. Professional service organizations (PSOs) must find an edge that sets them apart from their competitors to stay ahead of the pack. One key area that can make a significant difference is service execution.
PSOs face various challenges, but hitting revenue and margin targets consistently remains at the top of their list. While many factors contribute to reaching these goals, service execution is perhaps the most crucial. Effective service execution in the professional service industry encompasses resource scheduling, project financial management, time and expense capture, and billing. By excelling in these areas, PSOs can enhance utilization and project delivery, ultimately impacting their competitive position and overall success.
Research indicates that leading PSOs achieve a 16% higher on-time delivery rate than their competitors. This highlights the significance of efficient service execution in meeting client expectations and establishing a strong reputation. However, relying on archaic tools and outdated processes can lead to multiple execution issues, such as increased days sales outstanding (DSO), reduced utilization, increased write-offs, and – ultimately – reduced profitability.