Промышленный лизинг Промышленный лизинг  Методички 

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We are a totally different company today than when you started working with us. It all started with the assessment you completed. We eliminated a number of the services we were providing and focused on what we do best. We are now one of the largest providers of our services in the city, our consultants are fully utilized, and our bill rates have increased by 50 percent. Thanks to a number of other things you suggested, we have been able to grow and manage our firm effectively.

Note

1. Laurence J. Peter, Peters Almanac, Sept. 24, 1982.



Professional Services Frim Benchmarking

gina gutzeit

It is a funny thing about life; if you refuse to accept anything but the best, you very often get it.

-W.Somerset Maugham1

Professional services firm benchmarking is an often-overlooked process that is one of the most powerful management tools the firm has at its disposal. While firms can measure the most important financial benchmark, profitability, when it is underperforming (or doing well), does the firm have the ability to drill down further to understand why? And, even if the firm is profitable today, what do the leading indicators (such as turnover and pipeline) say about tomorrow? And, how is the firm doing relative to the industry and to its competition? Perhaps the firm is profitable, but not as profitable as it could be. In sum, benchmarking can help ensure both the present and future success of the professional services firm.

Profit is the number one unit of measure in any professional services firm. Profits are a factor of bill rates, billable hours, labor costs, sales, and general and administrative expenses (SG&A) taken into account as well.

Bill rate X hours = revenue Direct labor cost X hours = direct costs Revenue - direct costs = gross margin Gross margin - SG&A = profit

Leverage can significantly alter the number of billable hours. Leverage is the number of senior professionals (partners/vice presidents) in relation to other



professional staff. Key strategic decisions have a significant impact on profits (e.g., bill rates, staff ratios, billable hours). One of the best methods to determine whether the professional services firm is operating at an optimum profit is to benchmark these critical areas.

why this topic is important

Benchmarking is an analytical tool that measures and compares a companys key functions, systems, and performance to respective industry standards. Benchmarking is a straightforward concept for improving business practices and financial performance. Although it can seem daunting or complicated, particularly to firms who have not done any benchmarking, it is nothing more than taking a snapshot of other firms practices, comparing them with your firms current methods, and then implementing the best practices. Or, put another way, Benchmarking allows a company to climb the learning curve quickly by benefiting from the experience of other companies. 2

Used effectively, benchmarking is a practical means of spurring action or change within an organization that results in increased profits, reduced cycle time, higher client satisfaction, and a better understanding of the business and the underlying drivers of profit, staff retention, and client satisfaction. It allows executives to pinpoint areas for improvement, set more meaningful goals, and provide external criteria against which to measure progress and achievement. Whether benchmarking is focused on one particular area of operations or across a range of business functions, it provides a common basis for comparison and discussion between line and functional leaders.

Professional services firms must ensure the consistent, efficient, and optimal delivery of client services. Benchmarking is potentially more important for professional services firms than any other type of firm because client service is their product; thus they must always strive to ensure their service offerings and business practices are best in class. Unlike a manufacturing operation, where the tolerances and quality of a product can be measured directly, a services firm must measure as accurately as possible conceptual things like satisfaction levels.

Benchmarking is a tremendously powerful tool for improving business performance, yet it is not as commonly employed as other well-known management techniques such as project management, budgeting, or demand management. According to one estimate, among businesses in the $1 million to $20 million annual revenue range, only 5 percent of all business owners understand and implement benchmarking.3 Given the potential benefits, it is surprising that benchmarking is not more frequently used by business owners and executives. Are there invisible barriers to benchmarking? Does it seem too difficult an exercise to undertake or perhaps too expensive? Is the data on best practices not readily available?



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