Services team takes the centerstage for SaaS companies as they create products or provide services as per customer needs. Also, they help in implementing the solutions, integrating them with the current client infrastructure, conducting training sessions to help customers up to speed, and aid in further personalization as per requirement. In this article at Journyx, Inc., Lance Ellisor talks about the three service KPIs that SaaS or companies with similar functionality should exercise to measure performance effectively.
Metrics That Could Prevent Financial Downfall
Services teams are the go-getters of any company as they will not stop until they successfully deliver the expected project outcomes. Ellisor compares them to marines who are ready to take on any mission without fearing the difficulties they might face during the journey. Though having such a services team proves advantageous in terms of on-time delivery, failure to balance your commitment with ROIs can catapult your organization into a financial deadlock.
Calculating Billable Utilization Rate
Majority of product companies underestimate the value of services they provide along with the products, i.e., training, personalization, or installation for customers. Instead of underplaying these services, start calculating the time employees spend in them and bill it to the customers. You will soon find out the cost you were incurring on the organization by ignoring the extra unbilled hours resources were devoting for a product.
Average Billing Rate Per Employee Per Hour
A subpart of billable utilization rate, this measures the billed hours that your resources are devoting as per agreement. This also includes all the work done between unbillable hours and any activities done as per promised services and similar agreements. You should aim for a rate that is higher than the actual labor cost so that it covers for any overhead labor expenses. Even after excluding the unbillable hours, this should enable a spike in profitability rate for the project.
Estimated Versus Actual Time & Effort Calculation
This KPI calculates how accurate your estimation is in terms of time and effort to complete the project. It is a useful KPI when your budget is fixed and your client expects to get work done within the budget. It helps your team to scale up to that level of efficiency.
Time is of value here, and you need an efficient work tracker to understand if your efforts are being utilized efficiently because a satisfied customer can increase your revenue.
Your services teams should not only yield revenue after the product delivery, but also provide profits during the services. For this, both your sales and services teams should work diligently.
To view the original article, visit the following link: https://journyx.com/professional-services-kpis-must-start-measuring-2018