2014 Planview, Inc.

WHITE PAPER
RESOURCES AS REVENUE: FIELD AND
PROFESSIONAL SERVICES IN THE ERA OF
ECONOMIC AND HUMAN RESOURCE HURDLES
Introduction
Within both Field and Professional Services, the growing consensus among industry experts publishing trends and best practices
show optimizing service resources as the key to driving both revenue and proftability. Several factors have fostered this harmony
amongst odd couples; the most prevalent being the unique correlations each has derived regarding new, potential revenue without
the need for additional stafng.
This white paper will review the concerns and recommendations of fve research organizations to better understand how each
concluded that talent and resource optimization are critical success factors for future competitiveness. As each individual researcher
has made a business case for focusing on utilization, this paper presents the collective fndings and four actionable recommendations
for any service organization to improve proftability, regardless of current economic and human resource constraints.
I. Two Business Challenges Instigating International Research
While many service organizations deliver larger projects spanning weeks or months (or even years in the case of civil engineers and
lawyers), others use technicians that complete the works in hours or days. However, for all service organizations, the tally of how
profcient these individuals is an integral performance indicator and determines how much of their efort is directly attributed to a
billable service or project.
The need for skilled resources
Of the trends that have been identifed, two business challenges have become a constant since 2007. First, there is real concern
over the availability of skilled personnel. Some researchers cite education and international immigration regulation, others point
to the gradual retirement of baby boomers, and many simply point to the expense of hiring and training talent during economic
uncertainty. Regardless of the cause, these particular scenarios have become the top pain points among large services organizations.
According to the The 2014 PS Maturity Benchmark by SPI Research:
Attrition is trending upward and is predicted to reach 20% by 2018
Managers now have teams with 20% more people on average than in 2012
Consultants are now billing more than 1,500 hours annuallya 5% increase
over 2012 and a 7% increase from 2011
Impact to the iron triangle
The second business challenge is how the recent global recession has impacted the
iron triangle of project management. Also known as the project triangle and, less
poetically, the triple constraints; the visual articulates the edict that one cannot
change a projects budget, schedule, or scope without afecting at least one of the
other two parts (Figure 1).
Figure 1: The Iron Triangle
Quality
Scope
(Client Expectations)
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RESOURCES AS REVENUE WHITE PAPER
2 2014 Planview, Inc.
Although corporate investments are improving, client budgets are decreasing while their expectations are rising. According to both
the Technology Services International Association (TSIA) and Field Service Europe, service organizations can no longer compete on
price alone. Specifcally, TSIA itemizes these business transformations refecting client demands on current project scope:
Combining products and services into new recurring revenue services packages
Embracing technologies that are providing instant, personal gratifcation
Winning work because of end-to-end services solutions
Focusing on client needs, greater customer satisfaction, and increased business value
With budgets remaining stagnant and scope increasing, the rule of the iron triangle dictates that the number of existing personnel
must either increase or become more productive. If personnel data indicates a shortage, as described above, then it makes sense for
the fve experts to examine resource utilization and optimization tools.
II. Five Research Firms on Resource Optimization
It should come as little surprise that after understanding the background from much of the research by the top analysts in the feld,
the concept of resource optimization is highly topical. Doing more with less is at its very defnition, resource optimization.
The fve experts reviewed here for comparative
analysis were chosen because of how they
study the same subject of service organization
trends and achievements while each serving a
unique focus. TSIA, Field Service Europe, and
Service Performance Insight publish on the
topics of business and proft trends on behalf of
constituents and clients.
In addition, specifc surveys confrm that revenue
growth, as an industry whole, is facing a decline.
For example:
Aberdeen Groups two reports, Field Service
2013 and the State of Service Management:
Outlook for 2013, conclude that despite incredible
growth, tumultuous times are ahead for services
frms (Figure 2).
Service Performance Insights PS Maturity
Benchmark Study published in February of 2014
announces a formal downturn of revenue growth
of 3.7% since 2011 within professional services
(Figure 3).
Figure 2: Top Market Pains, Aberdeen Group, 2013
Figure 3: Year-Over-Year Change in PS Revenue,
Service Performance Insight, 2014
Saw lower service margins
Facing reduced customer spending
Seeing increasing competition in services
Did not meet service protability targets
0% 20% 10% 40% 50% 30% 60%
49% 49%
46% 46%
40% 40%
34% 34%
Source: Service Performance Insight, February 2014
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0%
2%
4%
6%
8%
10%
12%
14%
2009 2010 2011 2012 2013
3.6% 3.6%
7.6% 7.6%
13.7% 13.7%
11.5% 11.5%
10% 10%
RESOURCES AS REVENUE WHITE PAPER
3 2014 Planview, Inc.
Perhaps more importantly, the fve analysts also detail a correlation between advanced resource management technologies and
improved revenues or processes. Three of the fve go as far to indicate direct connection between resource and capacity alignment
and an organizations overall proftability.
According to Appleseed Partners, on the
subject of resource management and capacity
planning, an overwhelming percentage (60%) of
organizations lack adequate tools and, thusly, are
amplifying signifcant risks to revenues (Figure 4).
In parallel, Field Service Europe published the
2014 European Services and Trends Report that
explain the implications of new technology trends
impacting competitiveness and productivity of
technicians as revenue generators:
The push for deployment of new technology is
a major concern for companies in the industry.
As a result the desire to enable technicians as
revenue generators is a global concern for service
organizations
.
TSIA writes that because of the pressures impacting
services organizations, efective technologies are no
longer an elective luxury:
With the increasing pressure on services margins and
the need to standardize the delivery approach and
optimize service execution, as well as fnding new
services revenue streams, having the correct system
on which to manage business operations are critical.
It is clear from the research provided by Service
Performance Insight that service organizations with
more mature resource management processes
and systems such as a Professional Services
Automation/Services Resource Planning solution
are achieving more revenue per billable employee
($33k) and higher EBITDA (18.1% vs 13.8%)
(Figure 5).
Five sets of research by fve independent analyst organizations confrm: Whether it is a symptom or a cause of revenue growth
steadily heading downward; resource efciency is a major, if not the most important, factor. Business trends, as detailed by
the two associations represented (Field Service and TSIA), indicate that these pressures are only going to get more impactful if an
organization is going to remain competitive.
Figure 5: Services Resource Planning in Large PSOs,
Service Performance Insight, 2013
EBITDA 18.1%
Source: Service Performance Insight, November 2013
Annual revenue per billable consultant (k)
Annual revenue per employee (k)
Projects delivered on-time
Average project overrun
Concurrent projects managed by project mgr.
Year-over-year change in PS headcount
Year-over-year change in PS revenue
Key Performance Indicator (KPI)
Billable utilization
$232
$192
78.8%
10.3%
5.73
8.4%
10.5%
Use
SRP
72.5%
13.8%
$190
$164
75%
15.2%
4.76
4.8%
8.8%
Do not
use SRP
71.3%
31%
22%
17%
5%
32%
20%
73%
19%
2%
Figure 4: Risks of Not Addressing Resource Management and
Capacity Planning, Appleseed Partners, 2013
Not leveraging the best resources for the
highest value projects
Delayed time-to-market resulting in losses
of revenue, savings, user/customer
satisfaction, and/or market share
Decisions based on dated or inaccurate data
Quality or cost issues due to
misalignment of resources to projects
Lost productivity: resources not optimized
0% 20% 40% 60%
56% 56%
43% 43%
39% 39%
36% 36%
35% 35%
RESOURCES AS REVENUE WHITE PAPER
4 2014 Planview, Inc.
III. Four Recommendations
The good news amongst all of this doom and gloom is that solutions are aplenty. Each set of research identifed measured the
success of organizations that have addressed their resource constraints to some success. It is clear from the best practices that to
achieve greater resource optimization and improve proftability, a service organization must have visibility. This is intuitive. By utilizing
tools and/or information developed to give visibility into demand versus capacity, resources against project margin, and real-time
revenue leakage; improved proft margins are inevitable.
The surprise comes from the simplicity of some recommendations and the next level some organizations have achieved through
resource optimization. With new visibility and agility, best-in-class organizations are ensuring that they are evolving their services to
meet the changing expectations of its customers, who are seeking more value to be added and reduce price.
So what are the main recommendations that we can draw from the research?
1. Service standardization: Packaging services by standardizing the way they are delivered. This has the beneft of increasing
consistency while providing greater potential for less experienced resources to deliver. Setting these standards will result in end-
to-end services that focus on helping the customer to achieve more business value from their investment, rather than traditional
advisory, implementation, support, and break-fx services.
2. Enhance systems to ensure information fow: Operational efciencies are unlikely to be achieved if a business is managed on
a number of disconnected spreadsheets, home grown databases and legacy systems. Silos of information make decision making
difcult. Information should fow efectively between Sales; Service Delivery; and Finance. Visibility of service demand should span
multiple weeks for project centric services. The service organization of the furture will have to be a transparent, inter-connected
organization.
3. Improve resource demand and capacity planning: Getting good visibility of service demand is critical to optimizing use of
resources, but this information must be used in conjunction with available capacity, and resource skills and experience when
prioritizing the right resources for the right projects. To do this efectively, resourcing decisions must take into account a portfolio
of work and diferent scenarios. Operation efciency will need to be at the heart of all service organizations.
4. Executive buy-in: Breaking down silos, changing processes, and improving systems is bound to be met with some resistance. To
get the necessary level of adoption for these changes to be a success, executives must buy-in to the changes and communicate
the importance and the benefts to everyone.
Efectively managing service revenue has become a strategic element of top-line growth, and a key contributor to overall proftability.
While this research has identifed pressures and challenges facing service organizations it is clear that action is needed to ensure
new revenue streams are identifed and implemented, resource productivity is optimized, and proft growth is sustained. Service
organizations with the foresight and leadership to drive innovation to meet the demands of todays evolving market will likely be
winners in an increasingly services-led global economy.
IV. Further Reading
To better understand these infuences and recommendations, download the following resources and refer to the citiations section in
this document:
Research Report: How to Optimize the Productivity and Proftability of Resources: The Professional Services View of the Resource
Management and Capacity Planning Benchmark conducted by Appleseed Partners. To learn more click to access the complete report at
Planview.com/OptimizeProductivity.
WWW. PLANVI EW. COM | MARKET@PLANVI EW. COM | 800. 856. 8600 | +1. 512. 346. 8600 |
RESOURCES AS REVENUE WHITE PAPER
Planview is a portfolio and resource management
company that helps organizations maximize business
opportunities by optimizing the capacity of their fnite
people and fnancial resources. Market leaders
rely on the companys solutions to manage a wide
range of portfolios, spanning product development,
IT, services, and corporate fnance, resulting in an
enterprise-wide view of resources against demands.
For more information, visit www.planview.com.
2014 Planview, Inc. All rights reserved. All
trademarks acknowledged.

Research Report: The 2014 PS Maturity Benchmark by SPI Research. This report presents key performance metrics, latest trends,
market predictions, and critical business processes designed to empower you to compare, diagnose and improve performance. To
learn more, download your free copy at Planview.com/MaturityBenchmark.
White Paper: Three Recommendations for Tackling the Talent Clif: Drive Professional Services Growth by Leveraging Information. This
2013 white paper, by SPI Research, describes three ways successful large PSOs are making strides to combat the Talent Clif, get your
free copy at Planview.com/PSOTalentClif.
White Paper: The State of Professional Services: 2013 by Technology Services Industry Association and Planview. This paper
addresses these questions by tackling the following topics: What industry trends are impacting professional services, What services
capabilities are companies investing in this year, Are their available technologies that will optimize and automate with these new
revelations in play? Discover the answers and get your free copy at Planview.com/TheStateofPS.
V. About Planview
Planview helps enterprises drive innovation, become more agile and efcient, and improve their business performance. For
more than 20 years, leading organizations have been making better decisions using our solutions to optimize the planning and
execution of their business strategy. As the market leader in portfolio management, we combine a passion for customer success
with a commitment to innovation and thought leadership. Throughout the enterprise, our customers use portfolio management to
capitalize on business opportunities and thrive in a dynamic, global economy. For more information visit Planview.com.
VII. Additional Cited Works
Aberdeen Group, 2013 Field Service 2013: Workforce Management Guide
Aberdeen Group, 2013 State of Service Management: Outlook for 2013
Field Services Europe, The 2013/2014 European Services & Trends Report
VI. About the Author
Steve Beaumont is the SRP Solutions Market Manager
at Planview and has worked in the Professional Services
area for almost 25 years. He spent 12 years working
as a Management Consultant for Deloitte, Coopers &
Lybrand, and Ernst & Young, where he managed a team
of consultants and had responsibility for managing the
work pipeline, making resourcing decisions and ensuring
that projects were delivered to a high quality while also
managing the P&L. He also has spent a number of years working in the
software industry helping to sell, implement and drive the enhancement
of software solutions designed to help both PSOs and IT organizations to
manage their businesses and delivery successful projects.