Implementing tools, process improvements, and metrics to track financial performance is critical for any high-performing services organization. Financial metrics, if used incorrectly, can negatively impact the behaviors and attitudes of your services team. In many service organizations, the message from the top is focused on just two clearly defined performance metrics, Utilization & Actual vs. Budget. While these are very important metrics, a key question to ask is how much control do your service team members actual have that can impact utilization and performance to budget?
HBEC specializes in tailoring financial performance metrics that align to your KPI's, that also positively influence individual behaviors and bottom line results. Some examples of services metrics that go beyond the typical measures of utilization and budget vs. actual:
- Realized Time - measuring the % of available time an employee spends on direct services that is revenue generating.
- Productive Time - measuring the % of available time an employee spends on direct services and internally chartered projects. This avoids the perceived penalty of employees doing the right thing for the business, but it takes away from their billable time.
- Project Margin Achievement (PMA) - analysis of:
• (Budgeted Project Revenue / Budgeted Project Hours) compared to
• (Budgeted Project Revenue / Actual Project Hours).
Often, services teams are measured just on overall margin achievement for a department or line of business which creates conflict between sales and services. - Quality Performance Indicators
Type 1: Analysis of work effort spent on quality issues and rework that were above the budgeted project estimate - but caught in internal inspection.
Type 2: Analysis of work effort spent on quality issues and rework that were above the budgeted project estimate - but not caught by the customer (missed in internal inspection)
Financial Metrics are only effective if you can capture and monitor key metrics in real-time.
HBEC has extensive experience implementing Professional Service Automation (PSA) tools including OpenAir, ConnectWise Manage, ChangePoint, and many other boutique products. If implemented effectively, PSA tools can enable service organizations to proactively address departmental, line of business, project and individual performance issues that can impact financial results. They also ensure employees have real-time visibility into their contribution to key financial performance metrics.
OPTIMIZATION OF CLIENT SERVICE ORGANIZATIONS
FINANCIAL PERFORMANCE
