PSA users see 15% higher gross margins than spreadsheet users, new research shows

The latest figures from The Consultancy Growth Network's Benchpress report reveal new gains for consulting firms using PSA software.

The Benchpress report, which focuses the performance of boutique and founder-led consulting businesses, compiles findings from a benchmarking survey of some of the top-performing firms in the market.

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Higher gross margins

This year's survey revealed that firms using PSA (Professional Services Automation) software reported 15% higher margins than those using largely spreadsheets, and 9.5% higher than those using multiple standalone solutions.

Here's what consulting founders, ops and finance executives have to say about replacing spreadsheets with a PSA solution like CMap:

‍"Our resourcing spreadsheet kept falling over. There used to be too much time spent on admin. But since we've switched to CMap, our month end reporting has gone from 5 days to 3."‍

Tom Schuurman, Director of Finance & Resources, Bioregional

“When you’re building a scalable consultancy, you can't get very far on spreadsheets. CMap has been an invaluable tool that has helped us scale from one to thirty five employees in our first two years.”

Tony Clark, CEO, Nextwave

"When we were using spreadsheets, we had a full-time resource manager. Now with CMap we can manage resourcing in just a couple of hours a week."

Kiara Coen, Director of Operations, Livework Studio

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Higher utilization rates

Firms were also surveyed on their average rate of non-partner roles. Firms using PSA software reported 6% higher utilization rates than firms using spreadsheets, and 4.5% higher than those using multiple standalone solutions.

With the Benchpress report showing that utilization rates have fallen this year compared to the previous year's survey, each percentage point of utilization is more important than ever for growth and profitability.

Check out our complete guide to resource utilization here.

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Additional insights

Winning new business is biggest concern for founders

The most reported reason consulting firms grew this year was thanks to a major client win; on the flipside, a major client loss was the biggest reason firms didn't grow. Firms are suffering from client dependency.

How CMap can help

1. Identify the types of services which are most popular with clients & sell more of them
2. Spot cross-sell or up-sell opportunities to existing clients (e.g. substitute new business for extensions / higher value retention)
3. Manage new business & existing accounts better (e.g. track pipeline, proposals, closed won/lost opportunities)
4. Reduce reliance on "winning" as the determining success factor - instead, make it more about profit

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Technology adoption

The consulting market isn't making the most of available tech solutions. 75% of firms aren't using a PSA, and less than 50% are tracking chargeable time.

How CMap can help

1. Huge volumes of historical data & client successes show that PSA adoption translates to higher profit, higher utilization, less time-wastage, better growth, and stronger exits
2. Timesheet adoption is low - not because of the tool or solution, but how it's positioned within a firm. CMap has a proven track record of strong adoption and an effective onboarding approach

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Full time vs. associates

Firms who are either fully employed or fully associate outperform those who are caught in between. This demonstrates that firms who use a mix of full-time & associates are struggling with their resourcing and not tracking project profitability.

The number of firms who are fully employed has increased from 16% in 2022 to 26% this year, largely due to private equity placing higher value on firms with full-time employee models.

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How CMap can help

1. Regardless of your chosen model, not keeping on top of resourcing and project margin will eat into your profits - CMap helps firms keep on top of both!
2. CMap is used by a number of clients who are PE-backed, have been acquired, or have even gone through an MBO, largely with fully employed teams

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Want to know exactly what a PSA can do for your business? Schedule a quick chat with one of our consulting experts today to see CMap’s PSA in action.