- 1. Professional Services Basics
- 2. Client Management and Retention
- 3. Project Definition
- 4. Resource Planning
- 5. The Ultimate Guide to Capacity Planning
- 6. Project Visibility
- 7. Billing for Projects
- 8. Project Profitability
- 9. Professional Services Software For Project Management
- 10. A Guide to Time Tracking for Consultants and Professional Services
- 11. FAQ
- 12. Glossary
- 1. Professional Services Basics
- 2. Client Management and Retention
- 3. Project Definition
- 4. Resource Planning
- 5. The Ultimate Guide to Capacity Planning
- 6. Project Visibility
- 7. Billing for Projects
- 8. Project Profitability
- 9. Professional Services Software For Project Management
- 10. A Guide to Time Tracking for Consultants and Professional Services
- 11. FAQ
- 12. Glossary
A Guide to KPIs and Key Metrics for Professional Services
How to Set KPIs for Professional Services
Key performance indicators (KPIs) are important for many different industries: they help businesses track performance and measure success relative to specific business values and processes. KPIs for professional services are measurable values related to the professional services industry, which includes advertising, financial services, marketing agencies, legal firms, and other consultancy services.
KPIs for professional services firms usually focus on specific categories that help organizations understand how well they are utilizing their resources. Here are several examples of KPIs for professional services:
- Annual revenue per billable consultant: Many professional services firms employ consultants who charge a specific rate. One KPI for consultants is related to the amount that they bill annually, which has a direct impact on the company’s annual revenue. Annual revenue per billable consultant is determined by dividing a business’ total revenue by the number of consultants they employ.
- Annual revenue per employee: Annual revenue per employee is a similar professional services metric that firms can track regularly. It is determined by dividing the company’s total revenue by the number of employees they have on staff. A high rate of revenue per employee strongly correlates with profitability and efficiency.
- Project overrun: Professional services firms can also track project overrun, which is the financial amount that each project goes over its expected budget. Project overrun is closely associated with client satisfaction in addition to firm profitability. Outlining a decrease in project overrun as a KPI for professional services can directly impact the company’s success.
- Project margin: Project margin is the amount of revenue that remains once all of the direct project costs have been paid, and is another important KPI for professional services. Ideally, project margins should be as high as is feasible for optimal revenue intake.
Tracking these KPIs for the service industry can help firms get a stronger understanding of their progress in meeting strategic goals over time.
How to set professional services KPIs
KPIs are only useful to professional services organizations if they are outlined with measurable targets that can be tracked, so it’s important to know how to set KPIs for professional services.
First, outline your target goals for your professional services team for your first KPI. One example could be to double the average annual revenue per billable resource in the next five years. Next, work backward to determine what increase in revenue per billable resource will be necessary yearly to meet that goal. This will allow you to determine yearly, quarterly, or even monthly KPIs to track progress over time.
Richard Blatcher
As the Senior Director for Product and Industry Solutions Marketing at Wrike, Richard manages the global go-to-market approach in strategic industries, including professional services. He has over 30 years’ experience in the industry, managing the delivery of marketing and sales enablement offerings to professional services, manufacturing, and distribution blue-chip enterprises. He previously worked at Autodesk, where he was responsible for market launches of SaaS solutions.