The Value of Benchmarking and the SPI PS Maturity Model™ for Services Organizations
An Interview with Natasha Engan, SVP Global Consulting, Deltek
Summary: As the SVP of Deltek’s Global Consulting organization, Natasha Engan discusses the value services organizations get from using the SPI PS Maturity Model and how benchmarking can improve their growth, profitability and performance.
Q: For those that may not be familiar with it, what is the SPI PS Maturity Model and how can it be leveraged to improve services organizations?
NATASHA ENGAN: The SPI PS Maturity Model is a strategic planning and management framework designed by Service Performance Insight (SPI Research) to evaluate and improve the performance of services organizations. It is now the industry-leading performance improvement tool used by over 20,000 service and project-oriented organizations to help steer them to service excellence.
The key to SPI’s model is that it’s built on 5 foundational pillars that mirror the 5 key functional areas of most services firms: 1) Leadership 2) Client Relationships 3) Human Capital Alignment 4) Services Execution and 5) Finance and Operations. The core tenet of the model is to help services firms achieve success by optimizing their performance across these 5 pillars.
Data is collected from hundreds of firms that participate in the SPI study every year. SPI rates how these companies are performing across the foundational pillars using 5 ranking levels—with Level 1 being the least mature and 5 the most mature. Only the top 20% of services firms operate in Level 4 and Level 5, with everyone else operating mostly in Levels 1-3.
SPI ranks performance using Key Performance Indicators (KPIs) that correlate with each of the foundational pillars. The data collected and reported on in the SPI report can then be used by other services firms to benchmark themselves against the best performing and average firms in their service industry. This type of benchmarking is valuable because it gives services organizations the visibility to see where they are doing well and where there are areas for improvement.
Note: The SPI 2019 Professional Services Maturity™ Benchmark report will be released this month. Get a sneak peek at the key findings at a live webinar Friday, March 15th with the SPI report author, Dave Hofferberth. All those who register will receive a complimentary copy of the report.
Q: As the head of Deltek’s Global Consulting business—can you talk about the importance of KPIs in managing a services business?
NATASHA ENGAN: KPIs are important for understanding the trends in your organization and benchmarking your firm’s performance in key areas against others in the industry. Some trends may be positive—and tell you to keep doing what you’re doing. Others may be negative—alerting you to areas to fix immediately rather than wait. KPIs provide visibility into how you’re doing—where you’re doing well and where to improve—helping organizations be more nimble and flexible to opportunities and issues as they occur.
As the SVP of Deltek Global Consulting, I lead an organization of about 350 employees worldwide. Coming into Deltek a couple of years ago, my goal initially in using the SPI benchmarking data was to get a good understanding of our performance levels across key areas – so that I could plan where we needed to focus as we were going into 2018. Since that time, we continue to use the model as a strategic tool for continuous improvement.
There are certain KPIs I use on a daily basis, others on a weekly, monthly or quarterly basis. A lot depends upon the KPIs and what’s being tracked. On a daily and weekly basis I may be looking at anywhere from 25 to 50 KPIs, whereas on a quarterly basis I look at about 150 KPIs. This may sound like a lot, but as our systems and infrastructure have advanced it has become easier to track these metrics. Having real-time actionable data is what really matters. Deltek systems with real-time analytics and reporting enable you to identify issues much sooner, so that you can be proactive rather than reactive in addressing issues as they arise.
It’s really important for me to have the insight and analytics—so that I know the areas we’re strong at in the business, where the sales pipeline is at, and where it’s going. We run Deltek’s Global Consulting business around 11 different product lines—so we need to know how products are selling, what’s the services attach rates on these products and what the demand is going to be—so that we’ve got the right staff to service that demand.
Q: What benchmarking metrics do you recommend clients use to monitor the growth and profitability of their services business?
NATASHA ENGAN: There are hundreds of KPIs included in the SPI report. Most companies will be tracking the typical metrics services firms look at —for instance, utilization metrics, revenue per employee, overall revenue, revenue growth, and so forth. However, there will be variations in what firms track depending upon the type of services firm they are.
Since we’re an embedded services business our strategy is a little bit different than pure services firms. This means our primary goal is not necessarily to grow our revenue but to support the successful adoption of our products—while moving toward productizing our services offerings. This can be challenging because it means we have to do more with less and always be looking for ways to be smarter and more efficient.
Note: To see the KPIs SPI tracks across services industries register for the upcoming webinar with SPI report author, Dave Hofferberth. All those who register will receive a complimentary copy of the SPI 2019 Professional Services Maturity™ Benchmark report.
Q: What additional recommendations do you have for ways services firms can increase performance?
NATASHA ENGAN: From a profitability standpoint, how a services organization structures and aligns its business is very important. When you have geographically dispersed teams and resources comingled over products or if you are servicing multiple verticals or geographies it can be challenging. There are a number of ways services firms can choose to segment their business to be more efficient: for instance you can segment by type of service, vertical, geography, and/or company size.
At Deltek, as we’ve expanded, we’ve moved to globalize our practices and have established individual practice leaders responsible for each of our product areas on a global basis. This helps us to more closely drive and measure the KPIs for profitability and growth for each of these areas, and to make sure we are optimizing our usage of resources. It also helps us to more effectively develop contingency plans and to utilize downtime through cross training or loaning resources to other parts of the organization that may need them, such as engineering. This alignment as well as ongoing cross training and resource sharing has helped us strengthen our teams and organization.
The SPI 2019 Professional Services Maturity™ Benchmark report has just been released! Join us on Friday, March 15 at 1:00 p.m. ET, to hear SPI report author, Dave Hofferberth reveal key results from this survey of 622 PS firms. If you are looking to capture new markets, continue to delight clients and exceed engagement margins this is a webinar you won’t want to miss.
About the Author
As Deltek's Senior Vice President of Global Consulting, Natasha Engan is responsible for leading the company’s services business, Deltek Global Consulting. A 20+ year veteran of the software and services business, Natasha has a strong background in managing cross-functional, customer-facing teams in a global workforce. Connect with Natasha Engan on LinkedIn.
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