You will leave your competitors in the dust if you invest in maturing your business processes. This is the conclusion in a brand new, global report that investigates internal processes within companies KPIs.
Would you settle for a 5.0% profit (EBITDA) if 32.5% was within your reach?
This is the fundamental question you have to ask yourself after reading the 2019 Professional Services Maturity Benchmark™ from American SPI Research in collaboration with TimeLog. The benchmark dives deep within 160 KPIs from 622 international companies and analyses performance across process maturity level within the companies.
The results are unambiguous.
Companies that have developed processes according to best-practice within leadership, finance & operations, service execution, sales and HR are leaving their competitors trailing on all essential key figures. But, it’s not only the frontrunners that benefit from optimised processes.
The difference between 32.5% and 5.0% EBITDA equals the difference between the top-professional companies and those that haven’t even begun tuning their processes. Most likely, your company will be somewhere in between here. However, the benchmark reveals that improved KPIs don’t wait to appear until you reach the maximum level of process maturity.
SPI Research group companies within five levels of overall process maturity. The benchmark shows that companies who evolve from level 1 to level 2 can expect to see EBITDA climb from 5.0% to 8.3% on average.
[Download benchmark] See how process maturity improves your KPIs
At level 3, processes have gained a strong foothold within companies and profits also rises to an average of 17.8%.
Looking at KPIs such as contribution ratio, utilisation, keeping within deadlines, etc. the tendency repeats itself.
Across all 160 KPIs, it is the companies who have elevated themselves to the highest degree of process maturity that leaves the less professional trailing in the dust.
With Brexit on the horizon, European companies need to navigate through a potential turbulent market in 2019.
If you would like to secure your company against a potential crisis, you need razor-sharp KPIs on your internal processes. Consequently, if you put your faith in a growing market alone, you can end up with a billing rate that cannot make it through a chaotic year in the market.
Like past years, the SPI benchmark reveals that optimised and mature internal processes lift the companies to better key figures than the ones relying on a favourable market.
And they do so year after year.
At TimeLog, we have gathered the most critical KPIs and trends from this year’s SPI benchmark. Then, we organised them in an easily digestible 26 page Execute Summary. You can download it + the full industry benchmark (normal price € 1,800) by following the link below. This time it’s for free.
Gain insights into key business metrics for your industry TimeLog
Per-Henrik Nielsen the CEO at TimeLog, offers a PSA solution to consulting companies. So, that they can help support all business processes from contract to invoicing. With TimeLog you get easy time tracking, automatic invoicing, resource management and financial project management. You can learn more about TimeLog at www.timelog.com.
Evaluating whether a refined process is functioning effectively mainly involves initial establishment of key performance indicators (KPIs). This step helps in measuring and analyzing the performance of the process. To ascertain effectiveness, you compare the before and after results of implementing the refined process. It is essential to observe if the process delivers better quality, speed, or cost-effectiveness. Furthermore, an efficient process should also foster improved customer satisfaction and higher employee engagement. If the refined process indeed brings about these improvements, it means it is functioning effectively.
There are several examples of companies successfully refining their processes to impact their KPIs positively. One prominent example is Toyota with their famous Toyota Production System. This refining process focused on reducing waste, improving efficiency, and increasing output quality. The result was a tremendous improvement in KPIs such as production time, cost, and quality. Another example is Amazon, with its focus on customer service. By continually refining their delivery method, they’ve been able to offer faster deliveries, even going as far as same-day delivery. This has greatly improved their customer satisfaction rates.
Businesses often encounter obstacles while refining processes, such as resistance to change, identifying which processes to refine, disruptions to ongoing operations, and cost. These challenges can be addressed by cultivating a culture of continuous improvement, using data analysis for identifying areas to improve, implementing changes gradually and providing sufficient training, and viewing process refinement as a long-term investment. Through regular tracking and reviewing of KPIs, businesses can navigate these difficulties and make strides towards their objectives.
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