5 weekly KPIs (metrics) to track the health of your service organization
For service organizations such as agencies, consultants, and system integrators, the entire business is about managing billable time and billable client projects. But how do you measure the performance of the overall business amidst all the day-to-day project details?
The answer is to identify Key Performance Indicators (KPIs) that you can track on a weekly basis so you know where you are going and you have the data points to make informed decisions.
This article proposes these 5 KPIs as the most important for a service business. They cover all aspects of your operations including sales, finance, project management, and people management.
1. Backlog (Bookings Remaining)
Total billable budget (purchase orders) remaining, this indicates how much billable work you have left before needing to win new work
Percentage of actual billable hours vs available billable hours, this indicates how busy your billable employees were on billable work
3. Underruns or Overruns
Total cost underruns or overruns for all projects, this represents an upward or downward adjustment to billable hours for revenue recognition
4. Earned Revenue
Total revenue earned / recognized, this includes total billable hours for Time and Materials projects and total progress made for Fixed Price projects
5. Earned Revenue Per Billable Employee
Total revenue earned per billable employee, this indicates whether your bill rates and your resource allocation aligns well with your business model
There are software tools that can track these KPIs automatically. Billable Insight is one featuring all 5 of these KPIs built in and ready to go with just a few clicks. Try it for FREE (no credit card required).