Despite displaying strong KPIs, this year’s SPI Benchmark also offers a few lemons for the consultancy industry. For stationery companies, business could get tough in the coming year.
For the first time as CEO in TimeLog, I’m proud to present this year’s Maturity Benchmark in cooperation with American SPI Research.
The report plunges deep into the consultancy industry’s KPIs and investigates industry tendencies.
In this year’s edition, 622 consultancies participated. Altogether, they employ 400,000 consultants and earn a revenue of roughly 50 billion Euros.
And the benchmark reveals 2019 has been a terrific year for consulting companies.
However, I would take a hard look at the workings of my own company, if I spotted the same weaknesses that start to emerge in the highly growing industry.
Financial KPIs are skyrocketing, but…
2018 was the year companies broke all profit records since SPI Research started their survey 12 years ago.
The average bottom line across all companies was 18.5% (EBITDA). This is an improvement of 10% compared to 2017.
At the same time, the cake has gotten bigger. Revenue growth is rising from 8.0 to 9.7%, and new customers contribute to a larger share of companies’ revenue.
Moreover, the industry rode into 2018 on a tidal wave of new hires from the year before. In 2017, the increase in new employees was higher than the revenue increase for the first time.
In this year’s report, it seems that the increasing headcount has contributed to reducing the billable utilisation to a five year low (!). Also, the share of billable employees has decreased dramatically.
Mature internal processes will safeguard you against a turbulent 2019
2019 is the year where European companies, in particular, must navigate through Brexit. Nobody really knows how this will turn out or what it impacts the market.
If your company are to navigate safely through a potential crisis, you need strong operational KPIs. And they shouldn’t be dependent on a changing market.
Again this year, SPI’s Benchmark demonstrates how companies that have optimised their internal processes show much stronger key figures than companies primarily relying on individuals’ charisma and the state of the market.
From revenue to utilisation over project margin to realised hourly rate, mature companies outperform in every single aspect of business.
And they do so year after year.
Heading towards a turbulent European market, there is a need for us to look inward and to optimise our processes.
If the market turns, while our billable utilisation is falling and we employ too many non-billable employees, a potential crisis will hit us twice as hard.
We have gathered all the essential KPIs and tendencies from this year’s SPI report in our Executive Summary, which you can download by following the link below. You also get the full SPI report for free (regular price € 1.800).