2018 PS Maturity™ Benchmark
Item Number: SPI18PSMB
The report contains:
- 231 pages with 239 insightful charts and graphs
- Analysis derived from 456 Professional Service Organizations representing over 158,000 consultants
- Five-year trend analysis for 160 key performance indicators (KPIs)
- Detailed income statements
- Profiles of the Top 20 Best-of-the-Best service firms
10 Professional Services vertical markets:
- Architects and Engineers: 153 firms with ~ 25,000 architects and engineers;
- IT Consulting: 103 firms representing ~ 24,000 consultants;
- Software PS: 45 firms with ~ 33,000 consultants;
- Management Consulting: 45 firms with ~ 11,000 consultants;
- SaaS PS: 29 firms with ~ 9,000 consultants;
- Government Contracting: 18 firms with ~ 34,000 consultants;
- Marketing and Advertising: 8 firms with ~ 1,000 consultants;
- Accountancies: 8 firms with ~ 1,000 accountants and auditors;
- Hardware (and Networking) PS: 6 firms with ~ 6,000 consultants;
- Other PS: 28 firms with ~ 12,000 consultants;
The 2018 Professional Services Maturity™ Benchmark revealed industry growth of eight-percent, far below the five-year average of 9.3%. The 456 PS organizations represented in this benchmark employ over 158,000 consultants who each produced, on average, $196,000 in annual revenue; collectively these firms generated over $25 billion in PS revenue. With improvement in most major metrics, these firms reported significantly higher year over year earnings with average net profit moving up from 14.2% in 2016 to 16.8% in 2017. This is the highest average net profit ever reported in this benchmark.
Many leading indicators improved in 2017. Backlog grew from 45.6% to 46.2% while consultant billable utilization increased from 70.4% to 71.5%. Higher utilization, combined with a richer percentage of billable headcount (75.5% in 2017 versus 74.6% in 2016) were the primary catalysts for profit improvements.
Signs of increasing competitive pressures were evidenced by a decline in the size of the sales pipeline from 189% to 174%; while the win ratio decreased from 48.5% to 48%. With the surge of hiring, firms had to spend time and energy recruiting and ramping new consultants which resulted in a decline in revenue per consultant (from $205K to $196K) and revenue per employee (from $163K to $159K).
As of this writing 2018 has just begun. While SPI Research expects volatility in the market, we also expect executives in every industry will now more than ever before depend on the advice and guidance given to them by leading consultants. No one can precisely predict the future, so having enough options available to ensure success regardless of how the market moves, will benefit PSOs significantly.
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