Service Leadership
Total Profit Solutions for IT Companies™
Service Leadership Index™
- Q/Q Revenue Change - BIC Profitability SPs: Q1-09 16.1% Q2-09 168.3% Q3-09 -75.7% Q4-09 6.3%
- Q/Q Revenue Change - Median Profitability SPs: Q1-09 -38.4% Q2-09 15.4% Q3-09 32.3% Q4-09-22.9%
- Q/Q Revenue Change - Bottom 1/4 Profitability SPs: Q1-09 1.9% Q2-09 16.5% Q3-09 -42.5% Q4-09 20.7%
- Product GM% - BIC Profitability SPs: Q1-09 23.4% Q2-09 24.3% Q3-09 25.1% Q4-09 23.5%
- Product GM% - Median Profitability SPs: Q1-09 17.2% Q2-09 23.8% Q3-09 18.6% Q4-09 19.3%
- Product GM% - Bottom 1/4 Profitability SPs: Q1-09 25.1% Q2-09 27.9% Q3-09 15.5% Q4-09 10.8%
- Services GM% - BIC Profitability SPs: Q1-09 53.6% Q2-09 50.5% Q3-09 54.9% Q4-09 53.5%
- Services GM% - Median Profitability SPs: Q1-09 47.5% Q2-09 31.9% Q3-09 46.3% Q4-09 44.9%
- Services GM% - Bottom 1/4 Profitability SPs: Q1-09 41.6% Q2-09 38.7% Q3-09 44.1% Q4-09 36%
- SG&A% - BIC Profitability SPs: Q1-09 29.1% Q2-09 38.1% Q3-09 26.4% Q4-09 29.8%
- SG&A% - Median Profitability SPs: Q1-09 35.3% Q2-09 35% Q3-09 29.9% Q4-09 32.1%
- SG&A% - Bottom 1/4 Profitability SPs: Q1-09 42.8% Q2-09 35.7% Q3-09 39% Q4-09 46.3%
- EBITDA% - BIC Profitability SPs: Q1-09 17.7% Q2-09 13.6% Q3-09 21.9% Q4-09 16.5%
- EBITDA% - Median Profitability SPs: Q1-09 4.0% Q2-09 -1.8% Q3-09 6.9% Q4-09 4.2%
- EBITDA% - Bottom 1/4 Profitability SPs: Q1-09 -9.7% Q2-09 -14% Q3-09 -2.6% Q4-09 -16.6%
- Q/Q Headcount Change - BIC Profitability SPs: Q1-09 15% Q2-09 164.2% Q3-09 -71.4% Q4-09 0.9%
- Q/Q Headcount Change - Median Profitability SPs: Q1-09 -32.5% Q2-09 57% Q3-09 -41.9% Q4-09 -23.5%
- Q/Q Headcount Change - Bottom 1/4 Profitability SPs: Q1-09 12.2% Q2-09 62.3% Q3-09 -48.6% Q4-09 7.6%
Quarterly Solution Provider Performance
Service Leadership Toolkits & Web Learning
Strategy
S-L Business Model Explorer
Includes tool(s)
The purpose of the Service Leadership Index™ Business Model Explorer™ is to allow you to quickly see the profitability and stock valuation results of growing your business in ways that you choose. As you plan for 2008 and beyond, you can use this tool to immediately see the cash flow and current market M&A value of the alternatives you are considering.
Cloud Propensity Score
Includes tool(s)
Which of your abilities and business needs will be a factor in the way you choose to adopt cloud and the degree to which you will be successful? How will the options you'll have change your business model? Which cloud adoption strategy will drive the most cash flow and the highest stock value? This unique Service Leadership tool provides an in-depth look at the 10 abilities and 11 business needs that will determine your most successful path with regard to the cloud. Use it to gain new decision-making knowledge, self-evaluate your company and play "what-if" with the various paths open to you. Don't miss this valuable resource to see clearly into the next 2-3 years of your business plan alternatives.
S-L SMB Solution Provider Economic Exposure Dashboard
Includes tool(s)
This tool enables owners and executives to input the key strategy and operating parameters of their businesses and see what strengths they have and weaknesses they face in the current economic situation. Based on the most recent Service Leadership Index™ benchmark of Solution Providers, this tool enables the user to quickly assess the degree of risk or strength they have across twelve critical parameters including: geography, business model, revenue concentration, balance sheet ratios, target customers segments, and so on. Each of the twelve critical metrics is scorecarded by color to indicate the level of risk or strength, and then summarized in an overall level of risk or strength. By altering the inputs in a "what-if" fashion, the user can see which areas of the business should be shored-up to offset continuing economic risk. Because the analysis is based on the latest Service Leadership Index™ results, the user can evaluate their position of strength or weakness relative to others in the marketplace, to determine how aggressive they can be in marketplace strategy.
Solution Provider Valuation Approximator
Includes tool(s)
Solution Provider owners and executives are tasked with creating value by building the right business model (strategic value) and the right cash flow (financial value). Knowing of our M&A practice, Solution Providers often ask us to explain basic valuation methodologies and how the value of their business model is perceived under varying market conditions. To that end, we provide a unique educational tool: the Solution Provider Valuation Approximator©. It answers the question: "Given this mix of revenue and this profit performance, what might the approximate valuation range of my company be, based on market conditions now and in past years?" By seeing how a given business model and profitability change in value under differing market conditions over the past ten years, an owner/executive can more effectively predict the potential value of future strategies. Obviously, the real value of any asset is only determined at the time of sale, and hence may differ substantially from what this educational tool might display, but nonetheless the ability to test assumptions is valuable.
S-L Solution Provider Business Simulator
Includes tool(s)
The key to managing for profit is understanding which parts of your business are generating profit and which are not – and why. The Solution Provider Business Simulator© enables managers to quickly enter their revenue and costs to gauge two critical factors: which lines of business are generating profit, and how do the financial ratios of the company compare to current best-in-class? By using the industry standard definitions for lines of business, costs and business models from the Service Leadership Index™, the Business Simulator enables accurate analytics and true comparisons of best in class. In addition, using the interactive design of the simulator, managers can play "what if" with the various factors to easily see dependencies between different parts of the business. This enable control of revenue, COGS and expenses in order to test management strategies for improving profits and growth from all angles. The "Buy" version of the tool allows saving and printing of scenarios.
M&A
Solution Provider Valuation Approximator
Includes tool(s)
Solution Provider owners and executives are tasked with creating value by building the right business model (strategic value) and the right cash flow (financial value). Knowing of our M&A practice, Solution Providers often ask us to explain basic valuation methodologies and how the value of their business model is perceived under varying market conditions. To that end, we provide a unique educational tool: the Solution Provider Valuation Approximator©. It answers the question: "Given this mix of revenue and this profit performance, what might the approximate valuation range of my company be, based on market conditions now and in past years?" By seeing how a given business model and profitability change in value under differing market conditions over the past ten years, an owner/executive can more effectively predict the potential value of future strategies. Obviously, the real value of any asset is only determined at the time of sale, and hence may differ substantially from what this educational tool might display, but nonetheless the ability to test assumptions is valuable.
S-L SP M&A Basics Toolkit & Webinar
Includes tool(s)
Includes web training
Doing a merger or acquisition is a complex and risky but potentially highly rewarding strategy, whether you are selling or buying. Basic steps include determining how much cash flow the asset in question is producing, what the value would be at various valuation multiples, and evaluating the possible impact of a range of "soft" factors on the value and risk associated with transacting a given asset. These are advanced business skills but a few simple tools can help simplify the process to a degree. The SP M&A Basics Toolkit is a spreadsheet file that includes three tools. The Adjusted EBITDA Estimator© provides a sample format for recasting the income statement of an asset to more clearly identify the cash flow it might be producing, an important first step in most valuations. The Valuation Range Calculator© enables you to enter the adjusted EBITDA and several other factors to produce a range of possible equity valuations (i.e. exclusive of the balance sheet) and a range of possible enterprise valuations (i.e. taking into account the major factors on the balance sheet). The Valuation Scorecard© allows you to score a potential acquisition on a number of non-financial or "judgment call" factors which impact valuation and/or risk which are common considerations in Solution Provider M&A. Together, these tools provide samples to educate a decision maker on major components of the M&A decision process.
Sales
S-L Small Business Cost of IT Operations Calculator
Includes tool(s)
SMB decision makers often do not recognize what they are spending on their current methods of IT operations; their true expenditures are almost always much higher than they think they are, even if they have no IT person on staff. This interactive tool enables you to quickly demonstrate to them, their true cost of IT operations, so that they can better compare that cost against the savings your offering provides. The costs accounted for in this proven tool include direct IT expenses as well as lost productivity and revenue.
S-L SP Sales Management Basics Toolkit
Includes tool(s)
Solution Providers often find getting results from their sales teams to be a frustrating and unpredictable effort. Much of successful selling comes from discipline around basics: proper forecasting, qualifying and sales activity planning. Without these, driving a successful sales funnel is largely a matter of luck. This tool package includes three essential templates for driving a sales force to expected revenue production levels. The Solution Provider Forecasting Tool© enables a sales leader to accurately forecast the revenue coming through the sales funnel and compares forecast and actual to quota or goal for each sales rep. The Solution Provider Sales Activity Planner© enables a sales leader to track the planned and actual level of selling activities per sales rep; if the sales force is hitting its planned level of selling activities it is much more likely to hit its sales goals. Lastly the IT Solution Customer Qualification Tool© enables a salesperson to quickly qualify potential prospects even without becoming an expert in the offering in question. This enables a sales team to get to work bringing in qualified leads much earlier than the traditional "first we teach them about the offering" method of bringing sales teams up to speed on a new offering.
S-L Sales Compensation Calculator
Includes tool(s)
A common pitfall of compensation plans is that they often fail to either be attractive to the employee or they are not affordable by the company. This valuable tool enables managers responsible for setting or evaluating sales compensation plans to see the interaction and results of various components of the sales plan: revenue mix, gross margins for each type of revenue, commissions for each type of revenue, commission "hurdles", and so on. The tool then shows the results in terms of commissions and total sales compensation as a percents of gross margin and of revenue, as well as showing marketing costs, blended gross margins and bottom line profit. By using this tool, managers are able to quickly play "what-if" with the full range of assumptions usually incorporated into a sales compensation plan, to arrive at a compensation structure that is both attractive to the employee and affordable by the company.
Service and Pricing
S-L Multiple of Wages Calculator
Includes tool(s)
The Multiple of Wages Calculator© enables managers and others engaged in ensuring service profitability to quickly establish what rate they should be charging (either explicitly in T&M-based engagements or implicitly in flat-fee projects of Managed Services) to ensure a fair profit is made. The user can set any of the following parameters to see how they affect the hourly rate: technical wages, utilization, benefits and taxes, overhead and so on. Calculates the gross margin and net income generated, and is applicable to single billable people as well as group, project or contracts. Based on the principle of calculating service profitability based on the multiple of wages being charged, first introduced to the industry by Service Leadership, this straightforward tool eliminates the confusion around service pricing once and for all.
S-L Tech Compensation Calculator & Webinar
Includes tool(s)
Includes web training
Service Leadership's Technical Compensation Calculator™ (TCC™) enables you to determine EXACTLY what you need to pay your technical professionals based upon your specific business model inputs, including:
- Targeted Services COGS%
- Targeted Services Gross Margin %
- Services Rates you charge the market
- Utilization you can expect of your technical professionals
S-L Managed Services Financial Simulator & Webinar
Includes tool(s)
Includes web training
The S-L Managed Services Financial Simulator will give you a better understanding of:
- The major financial levers which influence Managed Services profitability
- The effects of capital expense and sales ramp on your cash flow and return on investment in Managed Services
- Pricing for profitability and maximum per-account revenue
- The impact of your Managed Services business decisions on the stock value of your company