What Sets the Highest Performing Professional Services Teams Apart?
One critical component of successfully growing and scaling a product-centric business is maintaining a high-performing services team that can hit the ground running at the start of each engagement and deliver value to customers quickly. Product companies that get a strong reputation for customer service can build on that foundation, using glowing reviews and references to drive sales to existing and new customers.
Because of this, professional services teams are not judged solely on project financials or the utilization rate of the team. Their central role is to enable customers to get the best value from the product as quickly and effectively as possible.
The Importance of Predictability
Benchmarking research from SPI looking at the performance of professional services organizations shows a vast gulf between the highest performing services teams and the rest of the field (see below). In organizations at the lower end of the scale, projects are more likely to hit bumps in the road and go off track despite the best efforts of the services team. Each time this happens, it takes significant effort to ensure the customer is satisfied. And if customers don’t get the benefits they hoped for, they won’t just be unlikely to recommend the product; they may stop using it.
| Highest Performers | Rest of field | |
| Employee billable utilization | 77.6% | 71.6% |
| Project margin for time & materials projects | 46.3% | 31.8% |
| Project margin for fixed price projects | 47.4% | 31.5% |
| Projects delivered on-time | 86.9% | 77.6% |
Source: 2022 Professional Services Maturity™ Benchmark Report, Service Performance Insight
One of the crucial differences between higher-performing and lower-performing professional services teams is predictability. Can PS see what skills will be required to staff projects coming in from the sales pipeline? Anticipate what customers will need before they ask for it? Understand their projects well enough to prevent project delays and escalations? Understand the impacts that changes to products will have on their work?
When PS can anticipate what’s coming, they can avoid falling into fire-fighting mode – a cycle of reactive interventions that leave services professionals feeling as if they’re always playing catch-up. Fire-fighting mode can lead to burn-out and can make it difficult to recruit and retain highly motivated individuals, and it can be difficult to get out of because breaking the reactive cycle requires the one thing it’s hardest to come by when your team is caught in fire-fighting mode – time.
But it’s worth it – investing the time to analyze trends, strategize, train, and work on the bid team fosters a more proactive culture that creates positive results for customers, employees, and the business as a whole.
Here are three characteristics of high-performing, predictable professional services teams.
1) The services team looks ahead and is prepared to recruit new people to ensure the team has the right capacity and skills
The most crucial ingredient to high performance is having the right people – and the right amount of people – to deliver time-to-value to your customers. There’s no amount of skill and expertise that can get around being understaffed. That doesn’t mean hiring more people than you might need just to be safe – doing that will mean incurring costs that will weigh down your business. Instead, it requires you to look ahead and ensure you maintain the ideal balance of supply and demand.
When thinking about the rate at which you need to grow professional services in your company, you can’t just look at the billable utilization rates for the period and say, “Well, everyone was overutilized, we need to hire some new people to help.”
Why? Because that’s looking backward to plan forward. There’s no guarantee that just because everyone on the team was running hot this month, that the same will be true five months from now when new team members are onboarded. Those new resources could join and end up on the bench with nothing to do; conversely, they could join a team that’s even more overutilized because the demand for professional services was underestimated.
The only way to truly know what’s in store is to make recruiting and training decisions based on the work you’re expecting to do. This requires looking at forecasts of upcoming demand that are accurate enough to serve as the foundation for hiring plans.
Looking at the demand for a specific skill three months from now, do you have the supply – the working hours from a resource with that skill – to meet the need? More importantly, if your forecasts are telling you that you will need two more full time employees with that skill in order to meet demand that month, do you have enough confidence in your forecasts to set the recruitment process in motion? Do you trust the information you’re seeing in your forecasts three months out?
If you don’t – if forecasts shift erratically up until the moment they become reality – then that should be the main focus for improving performance. What behaviors are causing forecasts to be so unpredictable that the business can’t plan ahead? Analyzing trends in the sales pipeline, resource staffing, project kick-offs, and project delivery can reveal consistent behaviors – like underestimating the scope of projects or failing to update close dates – that, if improved over time, can lead to a more accurate sales pipeline and a more consistent mechanism for growing PS in line with the business.
2) The services team are true experts – they understand the business challenges the customer faces and know how the product can help
In high-performing professional services teams, service delivery professionals aren’t just experts on the product; they’re experts in the types of businesses that use the product and how those businesses unlock value and drive success. They can’t just run through a checklist. They need to be able to communicate effectively how features of the product connect with the real-world business challenges each client faces.
It is therefore vital that the information the sales team has gathered during discovery about what the client is looking to gain from their investment is passed on to the services team, and that the services team has a plan for how to turn that information into action. No customer wants to hear the professional services team come in on day one of a project and ask, “So what business problems are you trying to solve?”
A flawless project kick-off requires coordination. When sales is ready to hand-off the baton to PS, is the project team already running at the same pace, ready to seamlessly move into project delivery? Or is the hand-off a surprise, with PS left scrambling to ascertain what the customer’s requirements are as the project kicks off?
In order to truly anticipate what a customer will need in order to derive value from the product, the services team needs to have the bandwidth to be involved in the sales cycle before the deal is actually won, getting to know the business and their challenges, and helping develop an achievable plan that encompasses not just product setup but adoption and value delivery.
This is time well spent. Keeping the PS team and the sales team aligned when it comes to setting customer expectations makes the start of implementation much easier to manage. Plus, deals are often won because of the trust that the services team builds when working alongside prospective customers. Customers want to feel their investment is in safe hands.
Customers are expecting your team to be the experts. No customer wants to have to explain the basics of their world to the services team. When the services team already has the background knowledge, they are in a better position to deliver value more quickly and effectively.
Being the expert also means that when the customer wants to change the scope of the project or take the product in a different direction, the services team can point out any risks. For instance, if individuals within a customer organization want to change the way they use the product in order to accommodate habitual ways of working, this may delay getting to the promised benefit. Expert service delivery professionals will be able to point out this risk. Being able to head off these kinds of issues at an early stage is a big differentiator for high performing teams.
3) The services team manages each project strategically, anticipating problems before they happen
High-performing teams don’t achieve high levels of success because they never run into problems during service delivery. They succeed because they build plans knowing what problems are likely to arise and when they’re likely to happen, and they are ready to head problems off before they take more time and more resources than expected. This allows PS to spend time preventing fires rather than running from customer to customer putting fires out.
To avoid crises and create a steady cadence of successful project delivery, where customers are using the product and getting value from it as soon as possible, it is necessary to plan each project strategically. That means focusing on delivering the product in a way that will help to solve each customer’s specific challenges.
That means no two plans are the same because no two customers are the same. And no matter how well you know the customer, no plan is perfect – project plans always deviate when they come into contact with customers, because customers are unpredictable.
But customers tend to be unpredictable in predictable ways. That is, the same set of pitfalls likely recur across customers, even if they pop up in unique ways. The key to running a more predictable PS function is analyzing the causes of project overruns, delays, billing disputes, and revenue leakage. This allows for strategies to be developed that either lead to more realistic project scopes and timelines, or that give project managers the tools they need to intervene proactively when they see the signs of an impending problem.
Another aspect of planning strategically is prioritizing the functions of the product that will deliver the most value to customers. In the world of product businesses, the mantra is to deliver value as early as possible. This can often mean it’s most beneficial to work in horizons, with PS setting up a viable product that focuses on key areas that are most important to the customer, and then delivering other functionality in later horizons.
Just be sure that if you take this approach, that you are able to circle back to the customer and deliver on what is expected in Horizon 2, Horizon 3, and beyond. Optimization projects tend to get deprioritized when PS is caught in fire-fighting mode, so use the strategies in this article to ensure your team has the bandwidth to work with customers who aren’t having problems, bringing them an even better experience than they currently have.
Final Thoughts
A great professional services team predictably delivers results in engagement after engagement. That consistency results from investment in accuracy, analysis, and improved execution. It means having processes in place that support people to succeed instead of dealing with constant crises.
To learn more about obtaining the insights needed to successfully optimize and scale professional services teams, read this success story from Esri, a global leader in geographic information system (GIS) technology. Hear from Kevin Ochs, Esri’s Professional Services Business Management Director, who says the real game-changer since adopting Kantata’s purpose-built software has been “the windshield view of our plans. Any accounting system will tell you where you’ve been, but Kantata gives us an accurate, up-to-date, living and breathing plan. Kantata shows us our future demand — if we expect to be short or over-staffed we can turn some dials to hire and proactively make decisions that will influence the future.”