Perspective

Key figures are far better for companies with sharp processes

By improving and maturing your business business processes, you outperform other companies on all essential KPIs. This is the unequivocal conclusion of a fresh global report that takes the pulse of companies’ internal processes.

Do you want to end the year with a profit result of 32.5% (EBITDA) or do you want to settle for 5.0%?

That’s the basic question you’ll need to ask yourself if you read the conclusions of SPI Research’s 2019 Professional Services Maturity™ Benchmark, published in collaboration with TimeLog.

The benchmark goes into depth with 160 KPIs from 622 international companies, and analyzes performance across maturity in the companies’ internal processes.

The results are unequivocal.

Companies that optimize their internal business processes within management, finance & operations, delivery, sales and HR run away from competitors on all significant key metrics.

But it’s not just the frontrunners who are running away with the silver.

Even small process improvements translate into KPIs

The difference in EBITDA of 32.5 and 5.0% corresponds to the difference between the absolute most professional companies and those that have not started optimizing their processes.

Your business is probably somewhere in between.

But if you work to improve your company’s workflows, it is not until the highest level of professionalism that you will see improved key figures.

SPI’s report places companies on 5 levels, depending on whether their processes are optimized. And companies that move from level 1 to level 2 experience on average that their profit increases from 5% to 8.3% (EBITDA).

[Download rapport] How process maturity affects your KPIs

At level 3, good processes have really settled in most companies. Profits also rise to an average of 17.8% for companies that have lifted themselves here.

The trend is repeated across revenue, project margin, billing rate, compliance with project deadlines, etc.

Across all 160 KPIs, it is the companies with the highest degree of process maturity that outperform the less professionals.

A turbulent 2021 calls for mature processes

With a Brexit on the horizon, European companies will have to steer through a potentially turbulent market in 2019.

If you want to secure your business against a potential crisis, you need KPIs on your internal processes to be razor sharp.

If you rely on confidence in a growing market, you risk being left with a project margin that cannot withstand a chaotic year in the market. As in previous years, the SPI report reveals that optimized and mature internal processes lift companies to far better ratios than those that rely primarily on the market cycle’s recovery.

And it happens completely consistently year after year.

In TimeLog, we have gathered all the most important KPIs and trends from this year’s major SPI report in an easily accessible, 26-page Executive Summary. You can download it + the full report (normal price: DKK 13,000) by following the link below. You get it completely free.

Get insight into key figures for your industry, TimeLog

Per-Henrik Nielsen is CEO of TimeLog, which offers consulting and consulting companies a PSA solution that supports business processes from contract to invoice. These include easy time registration, automatic invoicing, resource scheduling and financial project management. You can read more about TimeLog here: www.timelog.dk.

Per-Henrik Nielsen

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