TSIA 2009 Pace Setters: Benchmarking High Performance in TPS

There are many different forms of benchmarking.  Fundamentally, what we are trying to accomplish through benchmarking is to learn from the practices and business results of other companies.  And learning from other companies may well lead to conclusions about what practices are reasonable or common, or what results are minimally acceptable or “on target.”  However, clearly the most widely recognized and popular form of business benchmarking  seeks to learn specifically from the highest performers.  ”What makes the high performers different?”  “What are the business processes they engage in that seem to give them their edge?”  These are the questions we have been trying to answer for the last two years with our PS Pace Setters research program.  If you’re interested in the traits and practices of the best performing PS organizations and your company is a member of TSIA, you’ll want to check out our webcast next week (December 17th, 12 pm ET) on this topic.  Details can be found here.  In this post, as has become my custom, I’d like to provide a bit of a sneak preview and some useful nuggets for those that are notable to access the TSIA member deliverables.

Cracking the Code on PS Project Performance

Not all PS metrics and benchmarks are created equal.  For example, some PS organizations care a lot about how to compensate PS sales reps, while others don’t have any PS sales reps.  Some PS organizations are concerned about how they should be allocating their PS marketing dollars across content creation, market analysis, market awareness and demand generation, while others do no marketing of any kind on behalf of their PS business.  On the other hand, there are some metrics/benchmarks … that is, topics … that all PS organizations unquestionably care about.  One of them is PS project performance.  Fortunately for our member companies, we have a huge repository specifically focused on PS project performance data.  The data comes from our 2007 and 2009 PS Project Performance Studies, which together have collected hundreds of metrics across almost 280 actual PS projects.   I have written other entries based on this data set here, and here.  In this post, I’d like try and shed some more light on two topics that are frequently the subject of member inquiries:  project margins and project schedule performance.

Trending Key PS Metrics: Margins, Rates and Utilization

Whenever I take the latest quarterly snapshot of the TSIA PS benchmark data, I like to take a look back to see what key trends can be discerned.  Trending has been a key preoccupation for us this year … for obvious reasons.  Not since 2000/2001 has the technology sector been under this much pressure.  The pressure exerted over the last year has been starkly different from what we saw after the infamous tech bubble burst of almost 10 years ago, but the pressure has been enormous nonetheless.  To help PS executives and practitioners better understand and react to the current pressures, we have looked at trends across a number of topics:  revenue, revenue mix, profitability, market rates, compensation … and the list goes on.  We have done this with an eye on a variety of data sets and against many different time horizons.  In fact, trending the data has become so central to what we do that Thomas Lah, on his blog, just yesterday introduced a new framework for organizing our thinking on the very task.  In this spirit, herewith a new blog entry looking at trends for three of the most important KPIs for any professional services organization:  margins, rates and utilization.

Staffing PS Sales and Delivery: Messages in the Compensation Data

A lot of the benchmark data analysis that I do seeks to accomplish two fundamental goals:  1) to test the validity of our frameworks; and 2) to establish actionable benchmarks for our member companies.  As I was reviewing the 2008 Compensation data recently with a view toward improving the instrument that we’re using for the 2009 Compensation Study (which is in the field now), it occurred to me that we could use this massive data set to further help companies with decisions about what their PS businesses should look like in terms of overall distribution of FTEs.  In the 2008 study, 14 companies provided actual compensation data — by individual — for every FTE in their organizations that met our position definitions across three functions (delivery, sales and engineering) for 12 positions in all.  This resulted in a data set with 8,236 individuals in it and a highly detailed view of how PS organizations staff their businesses … a side benefit really for a study mostly focused on benchmarking compensation trends.  Some tidbits from this data set follow in this week’s DataViews post.

TSIA Service 50: Q309 Sneak Preview

Tomorrow, TSIA Executive Director Thomas Lah will be presenting the Q309 on results of our quarterly Service 50 analysis.  As always, the webcast is open to the public (TSIA members and non-members alike); if you haven’t already registered for the readout, you can do so here.  As has become my custom, I want to give a little taste of what Thomas will be covering, while trying to avoid stealing too much of his thunder.  So here you go.

Happy Birthday, TSIA!!!

For every person, for every organization, for everything, there is one … and only one … actual birth - day; the day of their birth.  For TSIA … the Technology Services Industry Association, that day is today.  TSIA represents the bringing together under one brand, one company, one association, three previously related but separate associations:  SSPA, AFSMI and TPSA.  Whether you’re reading this blog for the first time or the hundredth time, you are probably doing so because you’re interested in technology professional services.  You might be an employee at a company that — up until today — was a member of TPSA, the Technology Professional Services Association.  Now, your company is a member of TSIA, which means you get to benefit from the bringing together of all three associations.  I know what you’re thinking and asking yourself.  Is this going to dilute the former TPSA’s focus on technology professional services?  I’m not interested in field services or support services or education services, and so on.  I’m here to tell you in this post, that TSIA is going to be an incredibly good thing for you.  Here’s why.

All (TPS Organizations) Aboard: The TSW Train is Moving Out!

There’s a lot of excitement and anticipation around here these days.  That’s mostly because we’re getting ready for our annual member/customer event in Las Vegas, Technology Services World.  The Vegas event is our flagship conference and our most heavily attended one.  According to the latest data, we’re on track to have our largest event ever.  Clearly, having the event in a fun place helps.  But in these quintessentially uncertain times, there is no way this many people would expend the time or money to take part in the conference unless they were pretty darned sure that it was going to be a valuable experience.  If you’re not familiar with the conference and/or are wondering what all of the hubub is about, you can view the full conference agenda here.  What might be a bit less obvious to folks not all that familiar with either TPSA or TSW is what kinds of companies are typically represented.  So that’s what I want to cover in this blog post.

Mission Accomplished: Identifying Key Trends in Technology Services Organization

Earlier this year, TPSA conducted a comprehensive survey on technology services organization and structure.  Almost 60 member companies completed the survey.  Since the survey was completed, the results have only been accessible by the respondent companies.  The study report including the wealth of data and insights contained therein, is now available to all TPSA, SSPA and AFSMI member companies.  As has become customary, what I’d like to do in this blog post is provide an overview of the study and offer a tid bit or two on what we found.

In Which Tech Companies Ineffectively Confront the Services Chasm, Making Us Queasy in the Process

My boss, Thomas Lah, is clearly on a roll.  Many of the services economy principles that he has been talking about for some time and that are articulated in his new book, Bridging the Services Chasm, are playing out — as if on cue — in the tech industry news.  Just in the last couple of weeks, he’s blogged about two noteworthy examples of this here, and here.  In a nutshell, we’re witnessing a proverbial sea-change in the technology sector, particularly among technology product companies.  Organically in some cases, and through huge acquisitions in others, technology providers are simply becoming more services centric.  We’ve been documenting this general trend for some time, leveraging among other things, the huge amount of data we have from our quarterly TPSA Service 50 program.  Analyzed together, software and hardware companies now have more revenue coming from services than from products.  For the software companies in the TPSA Service 50, our latest data (Q209) show that almost 70% of revenues is coming from services.  And we’ve only begun to understand the implications of developments such as these.

There’s Something about Market Rates: Part II

In my previous post, I attempted to place some context around the enormously high interest this blog’s readers have expressed in the topic of PS market rates.  I also briefly discussed the TPSA 2009 Market Rates study, just completed, that offers participants a highly granular view of rates across multiple positions, rate types, delivery types and 31 geographies spanning each global region.  Having provided this context, however, it occurs to me that this information does little for TPSA member companies that are not participants in the Rates Study, let alone for individuals and companies among my readership not formally affiliated with TPSA in any way.  So in this post, I’d like to share some data points from the TPSA benchmark survey data.  This will fill in the gap somewhat and provide a bit of detail on what’s happening with rates as of the 3rd quarter of 2009.