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One-third of IT Service Providers Rank Net Profit as the Key Metric for Assessing Their Client Portfolio

May 30, 2013  

IT firms measure the value of clients in different ways. The top three metrics reported in our IT Service Provider Benchmarking Study were net profit (32.4%), gross revenue (28.6%), and annual renewal/longevity (26.3%). Unfortunately, nearly half of the respondents who participated in our study ranked themselves only average or below when it comes to gathering performance, profitability, and utilization metrics across the board.

A comprehensive business management system helps enforce a disciplined approach to IT service delivery typically resulting in increased data capture and better use of billable resources. In addition to streamlining processes, eliminating redundant tasks, and increasing scheduling optimization, firms that use business management systems can also automate tasks and eliminate delays in the scheduling and project fulfillment chain. This leads to a marked improvement in client satisfaction, which is an important metric to watch when you’re looking to grow your business. This rang true for 66% of survey respondents regularly capturing customer information and other data. Respondents using a system reported 71% retention rates as compared to non-users, which reported 53% renewal.

It gets better, our study also revealed that 60% of IT business management platform users had average hourly rates of between $101 and $150, while only 38% of non-users billed that much. This is an important data point because when you add up increased billable hours and higher billing rates you’re quickly building a recipe for increased profitability.

IT firms that are not using data to make informed decisions about their contracts, clients, pricing, and utilization may be leaving money on the table. If you’re looking for opportunities to grow your business, look no farther than your business data for answers.

To learn more about the metrics that matter most to IT service providers worldwide, download the free E-book, “Metrics That Matter: An Intelligent Approach for IT Service Providers.”

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