[Explainer] What does it mean to be a mature company?
SPI Research’ 2020 benchmark shows that you outperform everyone else when your company has a high maturity level. learn what maturity is and how you know how mature your company is.
Firstly, here are 3 quick key figures to trigger your engagement:
- 23% higher invoicing percentage
- 14% higher contribution ratio on projects
- 152% higher bottom line (EBITDA)
These are just three of the most eye-catching differences between companies on level 1 and level 2 on SPI Research’ maturity scale.
The scale goes all the way up to level 5.
You can read this in SPI Research’ benchmark for the consultancy industry. In the benchmark, 513 companies are measured against 160 key figures.
The conclusion is that your KPIs look better the higher the maturity level in your company.
56% of all companies are still at level 1 or 2, and the likelihood that your company is at the same level is high.
Naturally, we need to get you all the way up to level 5, and you can find inspiration and help in the article here.
But first: - What makes up a mature company?
In short - what is maturity?
Maturity doesn’t sound sexy.
It sounds a bit like a bowl of aging company with a dust of dried up ability to innovate.
But the association is deceiving.
In reality, maturity should take your thoughts to words like professionalism, excellence and competitiveness.
It is the ability to:
- Develop and fine-tune the workflows in your company
- Incorporate learning and new knowledge in your work procedures
- Make sure leadership runs all the way through the organisation and gather the employees towards your common target
- Exploit technology to create a solid business and better work procedures
The SPI benchmark shows that maturity has nothing to do with age. You can run an infant company that is relatively mature at the same time.
It all comes down to your organisational professionalism.
What does maturity look like? - SPI Research’ maturity model
If you want to grow your maturity, you need to do it on an operational level. You need to be able to see when you are mature and when you’re not if you need to develop your company.
And this is where SPI Research’ maturity model can help you.
The model splits up maturity into 5 performance pillars. And you can be more or less mature in the different pillars. The pillars are:
- Leadership (CEO)
- Customer relations (Marketing and sales)
- Human capital alignment (HR)
- Service execution (Project managers)
- Finance and operations (CFO)
Each pillar has its own characteristics that reveal the different maturity levels.
You can use the maturity model to test how mature/professional your company is within the 5 pillars.
If you would like to see what characterises the 5 levels, keep on reading, as we take a closer look at each level. You can also download the article as a printable maturity test here.
[How-to-use] Test your company - the 5 maturity levels
In this section, you can see the average KPIs and typical characteristics for each maturity level.
56% of all companies are still at level 1 or 2. There is a high likelihood that your company is also at the same level.
In the graphics, you can check off which descriptions match your company.
This gives you a sense of where you are on the maturity scale. And you can also see which areas you can benefit from optimising.
We'll start with level 1 since we find most companies at this level.
Level 1 – Initiated (30% of all companies)
If your company is at level 1 on SPI Research’ maturity scale, it is characterised by ad hoc workflows.
SPI Research calls this level for the heroic level because success is often driven by a few individuals delivering an extraordinary performance – and not a well-oiled organisation.
The work environment is chaotic and opportunistic. It requires employees to take on numerous roles, and specialists have a hard time exploiting their core competencies.
You have different perceptions of best-practice and quality across the company, which makes it difficult to provide a quote and deliver quality on time.
The IT landscape is very basic, based on Excel sheets, and your systems are not integrated at this level. Leaders, project managers and financial controllers do not have insights into key figures for the company, and they regularly make decisions based on old data or gut feeling.
Level 2 – Piloted (25% of all companies)
At level 2, you start to incorporate work procedures for different functions across the company. In single areas, you have established best practice standards.
But neither processes nor best practices are documented and available to the rest of the organisation.
Within the single departments or specialist teams, you can find operational excellence. But not across functions or the organisation.
More functions are digitalised, but not integrated with each other. At the same time, it is difficult to get an overview of key figures.
Level 3 – Deployed (25% of all companies)
This is realistically speaking the level most companies should strive for.
At level 3, standard processes and management principles are broadly anchored across your organisation.
At leadership level, you have established targets and management mechanism for finance and project delivery. You deliver projects efficiently, and you focus on aligning processes, both within and across functions in the organisation.
You now use standard methods and quality measurements in the project execution which opens the options for creativity and overperformance. In the fight for the best employees, you start to be attractive for ambitious talents.
Digitalisation and automation of project and resource management through a PSA system is in place, and you have deep insights into project execution and finances.
Level 4 – Institutionalised (15% of all companies)
At level 4, your company is an acute management, measurement and execution machine.
You now have a Business Intelligence setup that allows you to measure the most important key figures in your company, and the Sales team has a good CRM tool to forecast into the future.
Within each performance pillar, you have worked out a detailed set of operational principle for execution, tools and measurements. These principles let you manage finances and quality stringently and with large transparency.
As organisation, you have established both quantitative and qualitative measurements for sales, customer retention and market penetration.
At level 4, you start to select your customers and projects, because you do not waste time on unprofitable businesses.
Level 5 – Optimised (5% of all companies)
If your company has reached level 5, you have definitely fought for it.
I want to congratulate you. The way to level 5 is hard, but the reward is matched, and in most metrics there are higher profits when you go from level 4 to 5 than from level 3 to 4.
When you reach this level, SPI Research characterises your company as a learning organisation.
This means that you have basic frameworks in place for management, measurement and execution. Now you have established targets for data collection and learnings from everything you do. Based on your data, you require constant revision, optimisation and innovation of your processes, which make you extremely competitive.
At level 5, firefighting is history, because your organisation has become highly sensitive across teams that potential fires are put out before they start.
Finally, your digital landscape is fully integrated and standalone systems do not exist. Your PSA solution is completely integrated with your CRM and BI tools, and you have practically eliminated data gaps in your reporting.
Five tips to grow your maturity
If you would like to develop your company’s maturity level, it can be challenging to get started.
And five tips will not get you halfway or make you succeed. But they are pulled out of our internal work in TimeLog with optimising and making our organisation more mature.
I can tell you, we are in a good process, and I hope you can find inspiration in our experiences.
- 1) Get the leadership team aboard
It is crucial that your entire leadership team supports the idea. If half the team sit on the fence, it will be difficult for you to develop the teams across the organisation.
- 2) Make a decision and see it as a serious investment
It is a time demanding investment, and you must prioritise it over other tasks. You can’t expect to mature by running business as usual, and then develop when there is time for it. Cause there really never is - right?
- 3) Get started fast
There is no one right place in the company to start. Many companies develop in totally different ways. Often the focus is primarily on developing customer relations in young companies, where the more established companies have the energy to look more into fundamental processes. Go for the low-hanging fruits as much as you can.
- 4) Don’t give up – adversity is normal
It is normal that skeletons come out of the cupboard once you take a critical look at your work processes. And this is where it is important that you don’t close the cupboard again to prevent them from coming out. Then it will knock you over. Address what comes out and fix it, even if there is more than you expected.
- 5) Pay attention to your success
As you get a grip on more and more processes, it is important that you notice where you improve. It is especially important that the employees can see the success. Organisational development is challenging for them too. Find examples where you do a better job than before, and make sure to give words to them together.
We can support you in the digital part of your maturity journey
You may find it weird to read this article about maturity coming from a software company.
And maybe it is.
But through the work of implementing TimeLog at our customers, we have again and again seen how our customers move up on the maturity scale.
No IT system can improve an organisation’s work procedures alone. That is also true for TimeLog. But our PSA solution encourages a more well-considered approach to work processes supported by the system.
At the same time, the PSA solution provides your company with an architecture to link the work processes and enables you to optimise the entire organisation.
Especially if you run a consultancy business.
If you would like to know more, you are more than welcome to book a free 20 min. investigative conversation with one of our skilled consultants. Maybe we can help you move the maturity level of your company.
TimeLog and SPI Research’ 2020 Maturity Benchmark
Since 2017, TimeLog has cooperated with SPI Research to publish the early Professional Services Maturity Benchmark for the consultancy industry.
To our customers, TimeLog is often instrumental in a transformation towards higher maturity, and we, again and again, see how our customers develop – not only in size and revenue – but also in professionalism and maturity.
For the third year in a row, TimeLog both release the SPI benchmark and an Executive Summary with the most important key figures and takeaways from the benchmark.
You can download it here.
Service Performance Insights (SPI Research) and PS Maturity Model™
SPI Research is a global organisation that do research and education for Professional Services Organisation (consultancies). They at the same time offer consultancy for companies seeking a maturity transformation.
They have developed the PS Maturity Model™, which since 2007 is used by 20,000 project-oriented consultancies as development tool towards higher maturity.
You can read more about SPI Research on their website.