WHITEPAPER

BEST PRACTICES OF THE BEST PROFESSIONAL SERVICES ORGANIZATIONS

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INTRODUCING THE 2018 BEST-OF-THE-BEST PROFESSIONAL SERVICES ORGANIZATIONS

Based on results from the eleventh annual Professional Services MaturityTM benchmark survey, SPI Research has named the top twenty 2018 Best-of-the-Best professional services organizations. SPI’s extensive annual survey, the 2018 PS MaturityTM Benchmark, revealed top performers grew both revenues and new jobs at more than twice the rate of average firms. To support their expansion, the Best-of-the-Best augmented their consulting workforces by 19.8% compared to 8.7% headcount growth for average firms.

This past year, the top 20 firms out of 456 organizations who participated in the survey, outperformed their peers and the benchmark average with not only significantly higher profits, but also more projects delivered on-time and many more satisfied clients. These firms generated 26.3% in net profit compared to 16.1% for average PS organizations.

The Best-of-the-Best excel across five critical service performance dimensions: leadership, client relationships, human capital alignment, service execution, and finance and operations. The Best- of-the-Best recognition is significant because it measures PSOs not only on bottom line financial results such as profit margins but also on a breadth of leadership metrics to reveal exceptional, holistic performance. Each year SPI meets with leaders from the Best-of-the-Best PSOs to gain

insight into what sets them apart and the best practices that drive their exemplary performance.

This white paper examines how leading service providers succeeded despite global turbulence. It highlights results in each of the five Service Performance PillarsTM by comparing the Best-of-the- Best to all of the other organizations in the survey and offers suggestions on how to improve performance through the use of integrated front and back-office business applications.

Increasingly, when it comes time for IT investments, companies are turning to NetSuite. Every year a significant number of the Best-of- the-Best run NetSuite for their financial ERP, and PSA (Professional Services Automation) applications. This year was no exception with Best-of-the-Best organizations like Cloudera, Pariveda Solutions, TOP Step Consulting and Vision Solutions relying on cloud applications from NetSuite to support their superlative performance.

2017 WAS A VERY GOOD YEAR FOR PS

In 2017 the people-based professional services industry transcended looming changes in healthcare, taxation and the ability to employ non-resident workers with ease, producing the highest net profit yet recorded. Tech companies seem to have adapted to new security and accounting standards without a hiccup. Hybrid business models and billing models have not dampened the productivity or profit of Professional Services organizations; in fact, many firms reported 2017 as their best year ever. Based on a surge in hiring, the PS sector is poised for another record year in 2018.

Productivity improvements are critical in professional services. As the global economy picks up steam, organizations in every industry are having to work harder to achieve higher productivity, without adding substantial cost. For the first time, PS headcount growth exceeded revenue growth, indicating firms are feeling confident enough in the future to hire in advance of sales (Figure 1). This is really a big deal as it means firms are poised for growth in 2018. To combat the shortage of skilled consultants, PSOs are using a host of creative recruiting and skill-building strategies to squeeze ever higher levels of productivity from their workforces.

Although professional service industry growth continued, top line revenue growth slowed from 10.2% in 2015 to 8% in 2017 This is the second year in a row that overall PS sector revenue growth has dipped below 10%.

Underlying top level year over year revenue growth, we see uneven sector performance with organizations focused on the cloud, security, IOT, analytics and artificial intelligence experiencing significant growth while the more traditional segments of accounting, architecture and networking are seeing consolidation and price pressure (Figure 2). Now is the time for all PSOs to carefully evaluate their markets and market positioning to ensure they stay ahead of the curve and to seize emerging market opportunities before they become mainstream and commoditized.

The PS success formula going forward means leading edge firms must continually reinvent themselves, always on the prowl for “the next big thing,” all while delivering exceptional projects today to ensure a rich stream of repeat and referral business. Firms cannot stand still or rest on their laurels – they must continually stay ahead of the markets they serve while intentionally harvesting and repurposing current consulting assets to be able to deliver future projects better, faster – and if need be, cheaper.

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SPI has spent the past eleven years benchmarking varying levels of operational performance or maturity to determine the characteristics and appropriate behaviors for PSOs based on their organizational lifecycle stage. Figure 3 itemizes key performance measurements by maturity level and demonstrates the benefits of investing in a program to assess and advance maturity.

SPI has spent the past eleven years benchmarking varying levels of operational performance or maturity to determine the characteristics and appropriate behaviors for PSOs based on their organizational lifecycle stage. Figure 3 itemizes key performance measurements by maturity level and demonstrates the benefits of investing in a program to assess and advance maturity.

NETSUITE POWERS FOUR OF THIS YEAR’S BEST-OF-THE-BEST

Each year Service Performance Insight conducts in-depth analysis of the top 5% of PS MaturityTM benchmark participants to uncover the reasons for their superlative performance. After a careful audit of their survey responses and in-depth interviews with lead service executives, the top performing organizations are named Best-of-the-Best. Twenty out of 456 participating organizations were selected for this prestigious honor, becoming the 2018 Best-of-the Best.

One of the characteristics that differentiates this year’s top performers is the emphasis they place on building unique, employee-centered cultures. Whether it is parental leave for all employees or providing employee ownership or career opportunities regardless of gender, these firms have built collaborative cultures in which continuous growth and teamwork are prized. Their emphasis on building an open and ethical work environment manifests in low levels of attrition and high levels of employee satisfaction and referrals.

This year’s top performers are experiencing tremendous growth. Many have both acquired and been acquired, as larger firms seek to grab some of their magic. A top challenge is maintaining their esprit de corps as they grow. To ensure their cultures of continuous learning are passed down to newcomers and the next generation of leaders, they have built strong consulting and leadership development programs, emphasizing and supporting accountability at all levels.

Four of this year’s top firms, Cloudera, Pariveda, TopStep Consulting and Vision Solutions have adopted NetSuite’s solutions to provide visibility and management control across all aspects of the business. Following are excerpts from interviews with the PS leaders of these firms.

Cloudera
At Cloudera, we believe that data can make what is impossible today, possible tomorrow. We empower people to transform complex data into clear and actionable insights. We deliver the modern platform for machine learning and analytics optimized for the cloud.

Greg Marron, Director of Professional Services Operations at Cloudera.

Please tell us about your firm’s top accomplishments in 2017.
Net expansion rate of 135%, software revenue grew 51%, professional services delivered successful engagements to over 400 customers.

Please tell us about the aspects of your firm that you are most proud of.
We were the first commercial provider of Hadoop and continue to be the market leader. We have continued to innovate and are now positioned as leaders in Machine Learning and Advanced Analytics solutions, on-premise and in the Cloud.

Please tell us why your firm is a great place to work.
We have a great culture with great people. We also have a great opportunity as we are competing in a market that is expected to expand at 21% per year over the next 4 years.

Please tell us about the top challenges your firm is facing in 2018.
Improving leverage and productivity out of our sales stack. We will also need to innovate rapidly in order grab market share that is shifting to the cloud.

Please tell us how you plan to continue to be a Best-of-the-Best professional service organization.
We deliver value to our customers by providing the best and brightest resources. We will continue to invest heavily in training and in our college hire program, which has proven to provide a great source of talent. We are also investing in our asset management program, so that we can harness and reuse tools and best practices. We have also acquired a machine learning PS practice and will look to leverage that practice to drive innovation across our customers.

Pariveda Solutions
Pariveda Solutions is a technology strategy and solutions firm focused on developing exceptional people to solve our clients’ most complex and valuable business problems. We are multifaceted problem solvers who provide strategic consulting services and custom application development solutions for mobility, cloud computing, data, portals, collaboration, CRM, custom software and enterprise integration.

Kerry Stover, Chief Operating Officer, Pariveda Solutions

Please tell us about your firm’s top accomplishments in 2017.
2017 was a year of many accomplishments and achievements for Pariveda. We surpassed the $100M revenue level in 2017 as we increased revenue 11% to $109M and we expanded our national footprint by opening an office in Philadelphia, our 10th major U.S. market. Internally our processes expanded and deepened with the use of Holacracy. This gave us further capabilities to provide a safe career and respect for the individual while increasing adaptivity in our organization. We deployed our new methodology across all offices to formalize the common language of our work. Our brand was brought to life through the production of a new public website which showcases our work and the passion behind it.

Central to our organization is the tenet of talent development, an area in which we achieved significant milestones this year. Highground, a performance feedback system, was chosen and deployed across the entire firm in support of our commitment to developing people to their fullest potential. In addition, a new Manager School was deployed to improve entry into the role and increase engagement across the level. Two Vice Presidents and nine Principals were promoted internally. OpenAir PSA was also able to assist in the growth of our people as we implemented generic resources to improve the matching process and increase visibility to our backlog. This now helps our management team place employees on the best projects for their career growth.

Please tell us about the aspects of your firm that you are most proud of.
We are very proud of our commitment to long-term relationships with our clients. 94% of our revenue in 2017 came from repeat and referral clients. Our employee feedback this past year earned us recognition in numerous local awards as well as high rankings in national awards such as Glassdoor and Consulting Magazine. Furthermore, seeing the success of our mission to develop people with 60% of employees being promoted in 2017 gives us pride as we watch them grow their careers.

Please tell us why your firm is a great place to work.
Pariveda, at its core, believes each person has the potential to grow. We establish policies, procedures, frameworks and guides around the central idea that this growth is essential and important in a person’s career. This is not only found in our transparent career path and promotion review cycle but also in the daily interaction between our associates. When this level of care and thought goes into a person’s career growth and work life they discover a safe, respectful, open and caring environment prime for learning. Yes, there are challenges along the path for our employees, but these are met with support and guidance that helps them extend similar support and guidance to others in the firm.

Please tell us about the top challenges your firm is facing in 2018.
2018 will continue to be a year of growth for Pariveda. We need to deepen our delegation of authority and the accountabilities within our firm along with implementing tools and processes that provide visibility to and promote the rapid escalation of issues. We need to effectively diffuse the skills and processes to sell and deliver new capabilities in business and product consulting across our offices. Our brand will also be challenged as we work to extend it to support not only the new capabilities but also in the new cities we take our solutions.

Please tell us how you plan to continue to be a Best-of-the-Best professional service organization.
A continued corporate focus to increase our operational excellence will allow us to remain highly effective in areas distinctive to our architecture. In addition, we will increase rigor on internal operations needing to scale. We are adding an executive level position focused solely on client relationships to deepen that commitment to this distinct component of our architecture. Finally, we will continue to be excellent in our talent development processes so that our mission of developing our people to their highest potential will remain the same, enabling our ability to co- create value with our clients.

TOP Step Consulting

TOP Step Consulting improves business efficiency and productivity for Professional Service operations by providing consulting and implementation services for Professional Services Automation software. TOP Step Consulting is an eight-time Best-of-the-Best winner.

Jodi Cicci, President and CEO TOP Step Consulting

Please tell us about your firm’s top accomplishments in 2017.
∆ Refocusing the company to support a single PSA vendor and all related integration technologies
∆ Becoming an official NetSuite Alliance Partner
∆ Making the Inc 5000 list for the 3rd year in a row
∆ Making Consulting Magazine’s fastest growing companies list the 3rd year in a row
∆ In a ‘refocus’ year, still reaching 97% of revenue target
∆ We celebrated our 10-year anniversary in June 2017!

Vision Solutions

Vision Solutions is a premier provider of software solutions designed to protect data, minimize downtime and maximize resources for the modern data center. Vision Solutions® delivers workload migrations, high availability, disaster recovery and data sharing — across any hardware and any physical, virtual or cloud- based environment.

Please tell us about the aspects of your firm that you are most proud of.
∆ Customer support and loyalty
∆ Our strong reputation amongst the OpenAir Community, partners, and customers
∆ A solid team of colleagues driving the company goals and vision
∆ Giving back to customers each month in our newsletters

Please tell us why your firm is a great place to work.
∆ Team members enjoy solving customer problems – happy customers / happy team!
∆ Always new things to learn with every customer and challenge
∆ Strong sense of team – if someone needs help or coverage or backup, we’re always jumping in to help!
∆ Flexible schedules and working from home
∆ Internal training on a bi-weekly basis (brunch n learns)

Please tell us about the top challenges your firm is facing in 2018.
∆ With a focused PSA practice now, the challenge will be to ensure we have a steady pipeline and new opportunities to build on experiences/technologies related to OpenAir
∆ Staffing and ramping people up quickly on our expertise
∆ New executive management in place – maintain customer base and reputation (luckily our new CEO has been with the firm 9 of the 10 years so his reputation precedes him)

Please tell us how you plan to continue to be a Best-of-the-Best professional service organization.
∆ Continue to build the team knowledge base and ‘sense of team’ with company vision
∆ Focus on cost control
∆ Continue to promote a spirit of learning and knowledge transfer within our team and to our customers
∆ Become a key partner to NetSuite
∆ Set realistic revenue goals that support company growth while allowing for the inevitable
unplanned hurdles that come with running a company year after year.
∆ Listen to our customers!

Terry Plath, Vice President Global Services, Vision Solutions

Please tell us about your firm’s top accomplishments in 2017.
In 2017, we witnessed a 63% revenue growth of our Managed Service practice, and surpassed the $2 million revenue and 100 customer mark just 2 1⁄2 years after launching the offering. Additionally, we achieved an all-time high 39.2% EBITDA for PS while maintaining 93% customer satisfaction on projects and no escalations resulting from delivery quality issues.

Please tell us about the aspects of your firm that you are most proud of.
The Vision Solutions team is comprised of team members that are truly experts in business resilience and high availability/disaster recovery. We pride ourselves on being the go-to source to, literally, to prevent major system outages and mass data loss at many of the world’s premier corporations. Since I joined the team in 2014, our consulting team has experienced only one voluntary departure proving our positive work environment and complete commitment to our line of work. As the leading experts in the “Big Iron to Big Data” space we are continuously expanding our capabilities and the breadth of our capacity to help our customers through data and server security, data quality, data integration and system infrastructure optimization.

Please tell us why your firm is a great place to work.
Syncsort is a company with limitless opportunities and each employee can expand his or her skillsets to new product areas. Despite Syncsort’s quick pace of growth, the company provides flexible work arrangements coupled with a very reasonable work/life balance and travel requirements. All our consultants work from their home offices and flex their hours to meet the needs of our customers. Additionally, over 90% of our projects are delivered remotely. Syncsort is also proud to have several women in senior technology roles – our R&D team is 40 percent women and our engineering team is close to 50 percent women, something of a rarity at tech companies. In fact, our Chief Technology Officer is among a small number of women in such roles in comparably sized tech companies. She started in several engineering roles, and then was promoted to management roles and then to our executive leadership team as a General Manager role for a business unit, and then to CTO.

Please tell us about the top challenges your firm is facing in 2018.
Looking ahead to 2018, there are two top challenges we face. The global services organization under Syncsort has nearly doubled in size and we are now tasked with the role of integrating this organization into a much larger corporation. Additionally, maintaining the continued growth and renewal of our Managed Service customer subscriptions will be a priority.

Please tell us how you plan to continue to be a Best-of-the-Best professional service organization.
Our plan to continue to earn the recognition as a Best-of-the-Best professional service organization is to assess implementing a new PSA system with stronger resource scheduling/optimization and forecasting capabilities, and to continue to improve customer satisfaction via delivery quality. But, most importantly, we will continue to reward our service professionals for their consistent, high-quality performance and their dedication to the company.

SERVICE PERFORMANCE PILLARS
In this year’s benchmark, SPI Research found the best performing firms operated better than their peers across every one of the Service Performance PillarsTM. The following sections show how they achieved these results by highlighting four winners who rely on Cloud applications from NetSuite.