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Introducing SPI’s 15th Annual Professional Services Maturity™ Benchmark

The PS Maturity™ Benchmark is the global authority for the technology services sector.

Jeanne UrichThis guest post was written by Jeanne Urich, Service Performance Insight managing director and management consultant specializing in improvement and transformation for project and service-oriented organizations. She is a world-renowned thought leader, speaker, and author on all aspects of Professional Services.


SPI Research, SPI Research, the leading independent research and consulting firm dedicated to helping professional services (PS) organizations make quantum improvements in productivity and profit, recently published the 15th annual Professional Services Maturity™ benchmark.

For professional service organizations, 2021 was a banner year after a bumpy COVID-induced ride in 2020. Signs of global consulting prosperity are evident as annual revenue generated per consultant reached $206k. Year-over-year PS revenue growth was equally impressive at 10.6%. Consulting demand is at an all-time high as the urgency for businesses to move to digital and the cloud has been accelerated by the pandemic. Internal staff skills gaps, wage inflation, and a war for talent have caused businesses to increasingly turn to consultancies to design and implement their digital strategies.

The 540 Professional Services organizations represented in this benchmark employ nearly 163,000 consultants; collectively these firms generated over $26 billion in PS revenue. In its 15th year, the Professional Services Maturity™ benchmark has become the gold standard for the technology services sector with input from over 6,000 project and services-based organizations.

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The PS sector’s productivity and profit are at an all-time high as organizations have benefited from the move to virtual consulting delivery which has helped ratchet up billable utilization to 73%. Consultants are able to spend more time doing productive, billable work without the burden of traveling on-site. Service organizations are also benefiting from the increased use of integrated business applications to push productivity to new levels resulting in an average sector net profit of 15.7%.

The essential business solutions required by service and project-oriented organizations are core financial management (CFM); client relationship management (CRM); and Professional Services Automation (PSA). Independently these applications help PS organizations to become more productive and profitable, but when these solutions are integrated they create additional visibility, insight, and value across all facets of services delivery. In addition, new services CPQ (Configuration, Pricing, and Quoting) tools aim to improve the effectiveness and accuracy of services quoting by acting as the glue between the sales cycle and delivery cycle by bringing quoting and estimating together.

Solution Integrations with Core Financials

Table 1 shows improving levels of integration in this year’s benchmark. SPI Research believes integration between CRM, PSA, and core financials is an essential ingredient in superlative performance. The integration provides visibility to all parts of the organization and helps break down organizational silos. Achieving client delight and profit in professional services requires tight coordination between demand and supply which can only be achieved through integrated business applications.

An important indicator of client satisfaction, “Client referenceability” improved from 73.1% in 2020 to 76% in 2021. The survey asks firms to report the percentage of their clients who are referenceable. In other words, satisfied clients who would act as a reference for their products and services.

On the negative side, attrition, which measures the percentage of employees who voluntarily or involuntarily resigned during the year, reached 14%, up from 11.6% in 2020. Given a massive skilled talent shortage, firms are working overtime to find, hire and retain staff resulting in significant wage inflation in high-demand roles.

What changed from 2020 to 2021?

With a spike in consulting demand, year-over-year revenues grew by 22%, and hiring almost doubled with year-over-year headcount growth of 67%. As SPI Research predicted a year ago, employee attrition rose in 2021, as economic conditions improved giving employees more options. Voluntary attrition increased from 6.9% in 2020 to 9.8% in 2021. However, involuntary did not, it went down from 4.7% in 2020 to 4.2% in 2021. Few organizations resorted to letting employees go. The reduction in involuntary attrition helped PSOs keep overall attrition somewhat manageable, with a rise from 11.6% to 14.0% year-over-year.

Virtual consulting delivery dramatically reduced travel and business expense (20%), as consultants were only on-site for 33.9% of billable hours in 2021, down from 40.2% in 2020. Hopefully, this trend will continue as clients and employers realize the benefits of remote service delivery with lower facility and travel expenses combined with improved productivity.

KPI Comparisons

Project size and duration increased in 2021 with average project revenue increasing to $181,000 based on an average project duration of 25.9 man-months (Table 1). Profitability stayed about the same in 2021 (slightly down -0.1%), moving from 15.8% to 15.7%. Subcontractor expense and general and administrative costs went up. Otherwise, most professional services costs as a percentage of revenue went down in 2021.

Many organizations used 2021 to focus on business improvement initiatives. Those that implemented business solutions improved visibility and reported much higher levels of integration between their core CRM, PSA, and financial management applications.

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