Solutions for the Professional Services Industry

Professional services organizations' demand is highly driven by corporate profitability and the overall health of the economy. In times of downward trends, companies look toward a leaner business model and tend to want the expertise of outside business consultants because they cannot obtain it internally. Companies become more inclined to use consultants for business analytics and they want the outside knowledge to help improve overall corporate profitability and to help successfully reach strategic corporate goals.

The professional services industry is highly fragmented and the profitability of individual firms depends on having a regular flow of projects. Large firms have advantages in marketing and in being able to offer wider ranges of services to meet the needs of major clients. Small firms can compete successfully by offering special expertise or focusing on particular regions. Revenue per employee varies among the different types of professional services

While challenges and opportunities will continue to present themselves in this industry, the key to success is finding a way to dynamically manage these and still produce profitable bottom line results. To succeed, companies must adopt strategic and all-inclusive financial, project, and resource management practices.

Why Prophix for Professional Service Companies

Prophix Performance Management solutions provide professional services companies with the necessary financial and non-financial information to make strategic and accurate business decisions within a timely manner. Operating in a highly fragmented environment, professional services companies require instant knowledge to remain competitive and to remain one step ahead of their key competitors. Prophix offers a solution that provides the framework and business model allowing professional services companies to proactively act on key business decisions around new opportunities, revenue analysis and measurement, gross margin breakdown, expense management, accounts receivable tracking and forecasting and reporting evaluation.

Professional Service organizations use Prophix Performance Management software and services to:

Discover new opportunities [+}

• Identify new market opportunities such as potential partnerships with technology companies and rival competitors
• Expand the organizations area of expertise by exploring other industry and services opportunities
• Examine international and cost-saving opportunities; for example, customer service and IT operations can be shifted to foreign locations

Analyze revenue & future growth opportunities [+]

• Quantify and evaluate key revenue drivers such as days of work and billing rate to better understand trends and proactively plan for positive returns
• Explore different contract options such as "cost plus" premium, contingency fees and/or fixed price contracts to meet all customer wants; prove strong ROI to corporate clients
• Investigate and measure foreign revenue opportunity with international business and foreign offices

Gain gross margin optimization [+]

• Track and optimize gross margin percentage to ensure attractive ranges are maintained and reached (40-60%)
• Itemize and modify key gross margin factors (revenue, cost of sales) to forecasting future GM targets
• Utilize gross margin to calculate your consulting rate to determine breakeven points

Control personnel expense management[+]

• Organize and group skilled (technical, management consultants, executives, partners) and non-skilled labor (administrative, support staff) to identify specific employee-related costs
• Manage high attrition rates (20-40%) by offering employee incentives based on recorded hours worked and travel time
• Measure and record recruiting, training and advanced education expenses to understand the true intellectual capital costs

Maximize accounts receivable payments [+]

• Control high accounts receivables (60 to 120) by tracking payment schedules and regularly measuring the effect on cash flow
• Offer various payment options to customers to alleviate the bottom line effect
• Forecast accounts receivables to prepare during difficult economic times or when clients are downsizing

Create an effective forecasting process [+]

• Create recurring forward-looking forecasts to plan for customer turn-over and changes
• Plan out multiple years and across multiple engagements to accurately project profitability and sustainability
• Generate numerous what-if scenarios to effectively measure the outcome of changing key performance indicators

Utilize in-depth professional service reports [+]

• Design and analyze detailed professional service reports illustrating key measures such as utilization rate, billable hours, and revenue by consultant
• Communicate key professional services business measures and findings to the operations team through automated report distribution
• Benefit from Prophix's inherent OLAP technology by satisfying multiple stakeholders requests and desires

Professional Services Resource Center

Professional Service companies who have selected Prophix: