Professional Services IT Model
Professional service billing in the IT Industry is commonly referred to as the “Time and Material” or “Break/Fix” business model.
Those of you who use the Professional Services Model are aware there are several serious problems with this model.
Some of the problems are:
- Monthly revenue streams are not consistent. This causes serious cash management problems such as meeting your payroll or timely payment of vendor invoices.
- Stress on the technical resources when a major hardware failure occurs.
- Limited or no ability to grow revenues without adding additional employees. There is only 24 billable hours in the day.
- The business model is not focused upon building efficiencies in the service process.
- There is no incentive to fixing the problem right the first time.
Transition from Professional Billing to Managed Services
With clients that have transitioned from the Professional Billing Model to the Managed Service Model using the Unified Management System, we have found the following list improvements in their business:
- Dramatic improvement in the productivity of the technician’s time. For one client, the billable hour ratio for one Tier 2 technician went from approximately 60% of total billable hours to approximately 80%. For this client they were able to increase billable revenues approximately $3,200 per month for this technician.
- Industry averages show that IT service companies that use the Professional Service Model tend to generate about $12,800 per technician per month, however, when they transition to the Managed Services Model they see a significant increase in revenue. Clients using the Unified Management System are able to leverage the systems, technicians and processes to extend their revenue generating capabilities beyond the 24 hour day. These clients can potentially generate up to $41,000 per technician per month across their primary and integrated lines of business.
Let Succurri show you that the Unified Management System is the Solution to your Success.