Blog · Board and management reporting · Consulting and advisory
The ten commercial KPIs a consulting or professional services firm should run on, each with its formula, the export it comes from and what it tells you: utilisation against realisation per consultant, proposal win rate by practice and source, sold work against the bench, cross-practice share per client, partner book concentration, repeat business rate, project margin against plan, backlog in weeks, client fee concentration, and day rate realised. Also the three measures most firms miss, the figures to drop, the identities, and who owns what.
A consulting firm sells time it has not yet allocated to people it has or has not got. The measures that matter connect what was sold to who delivers it, and show which clients, sources and practices actually make money.
| # | Measure | Formula | Export | What it tells you |
|---|---|---|---|---|
| 1 | Utilisation against realisation | Chargeable hours ÷ available hours; fees billed ÷ chargeable hours at standard rate, per consultant | Timesheets; billing | The busy and the unprofitable |
| 2 | Proposal win rate | Proposals won ÷ proposals decided, by count and value, by practice, source and size band | Proposal log | What to stop bidding on |
| 3 | Sold work against the bench | Hours sold by grade and skill, by month, against hours available | Signed work; resource plan | Work that cannot be staffed; people with nothing sold |
| 4 | Cross-practice share per client | Practices with fees at the client ÷ practices relevant to clients of its type | Project ledger | Single-practice clients |
| 5 | Partner book concentration | Share of each partner's fees from their largest client | Billing by partner | Books that depend on one buyer |
| 6 | Repeat business rate | Fees from clients who bought in the prior year ÷ total fees; clients not returning, by prior fees | Billing | Whether delivery leads to the next project |
| 7 | Project margin against plan | Actual margin − margin at sale, per project, with overrun hours by grade | Project ledger; timesheets | Estimating and scope problems, by practice |
| 8 | Backlog in weeks | Signed undelivered fees ÷ average weekly revenue, by practice | Signed work; billing | Who needs to sell and who needs to hire |
| 9 | Client fee concentration | Top ten clients' share; largest client share | Billing | Dependence at firm level |
| 10 | Day rate realised | Fees ÷ days delivered, against rate card, by grade and client | Billing; timesheets | Discounting that did not get decided |
Every one of these is computed per account, per partner and practice, and in total, and every one carries an identity that must hold before the table is shown.
Utilisation beside realisation. Utilisation is reported weekly and rewarded. Realisation per person rarely is.
Win rate by source. One blended win rate hides that open tenders win at a tenth and cost the most to prepare.
Sold work against the bench. Sales and resourcing meet when the project is due to start.
A consultant is 92 percent utilised, the highest in the practice. Realisation on her hours is 61 percent: two fixed-fee projects overran by 300 hours. A colleague is at 68 percent utilisation and 104 percent realisation. Ranked by utilisation the first is the star. Ranked by fees earned per available hour, 56 percent of standard against 71, the second is contributing more, and the first is a scoping problem, not a performance one.
Utilisation alone. It rewards overrun.
Proposals submitted. Cost, until the win rate by source is known.
Pipeline value unweighted and undated. See coverage against the measured win rate instead.
| Table | Must hold |
|---|---|
| Time | Available hours = chargeable + non-chargeable + leave |
| Realisation | Chargeable hours at standard = billed + written off + work in progress |
| Proposals | Proposals = won + lost + withdrawn + open |
| Backlog | Opening backlog + signed − delivered = closing backlog |
A table whose identity fails is a table with a row missing or counted twice. It is not shown until it is fixed.
| Measure | Owner | Reviewed |
|---|---|---|
| Sold work against the bench; backlog | Practice heads; resourcing lead | Weekly |
| Utilisation against realisation; project margin | Practice heads; project leads | Monthly |
| Win rate by source; repeat business | Managing director; practice heads | Quarterly |
| Cross-practice share; concentration; day rate realised | Managing director; finance | Quarterly |
A measure with no owner is a metric, not a KPI; see KPI versus metric versus measure.
Ten measures from timesheets, the project ledger and the proposal log. Read utilisation with realisation, win rate by source, and sold work against the people who must deliver it. Covirage computes all of them from the exports firms already produce, files only, with the definitions stated and the identities checked. See Covirage for consulting and professional services firms.
Utilisation says how much of a consultant's time was charged to projects. Realisation says how much of that time was paid for at the standard rate. High utilisation with low realisation is someone busy on work that overran its budget. Low utilisation with high realisation is someone underused on well-priced work. Either number alone misleads.
Practice, source such as existing client, referral or open tender, value, whether the firm knew the buyer before the request arrived, and the outcome. With those, win rate by source shows that invited proposals to known clients win at several times the rate of open tenders, and gives a rule for what not to bid on.
Signed work not yet delivered, in value, divided by average weekly revenue, giving weeks of backlog. By practice, it shows who has four weeks of work and who has four months. Set beside the bench, it shows whether the firm needs to sell or to hire.