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DATA POINTS: CONSULTING METRICS.

Soft-Letter • April 13, 2001 •

Software companies usually have good productivity benchmarks for the product side of the business, but service metrics--especially for high- cost consultants and application developers--are often a black hole. However, a new R.W. Baird report on "Internet Professonal Services" helps fill this gap by analyzing performance data from 18 public firms that sell Web development and creative services. The most successful firms report annual billings of more than $200,000 per consultant; the most productive, Mainspring, is a relatively small strategy firm whose 180 consultants currently average $251,000 in billings. The top firms typically achieve utilization rates of 60% or better, while low performers have rates in the 30%-40% range. Turnover is another key variable in professional services: The industry median is 18% a year, but the two firms with the lowest revenue per consultant seem to have problems hanging on to staff; their turnover rates are 40%-45%.

Internet Professional Services, 4/9/01, Gary Dean, vice president, R.W. Baird & Co., 2525 West End Ave., Nashville, Tenn. 37203; 615/341-7119. E-mail: gdean@rwbaird.com.

ORACLE chairman Larry Ellison on trying to integrate software from multiple vendors: "It's like if you want to buy a car. Would you get an engine from BMW, a chassis from Jaguar, windshield wipers from Ford? No, of course not. Right now with the software that's out there, you need a glue gun--or hire all these consultants to put it together. They call it best of breed. I call it a mess." (Quoted in Fortune, 11/13/00)

NOVELL chairman Eric Schmidt on the role of his company's reseller partners after an announced merger with Cambridge Technology Partners, a major consulting firm: "The best way to screw this whole thing up is to tell our partners we don't need them any more because we're going to do everything through CTP. All consulting companies are not the same. We have to determine what solutions Deloitte & Touche offers, for example, and figure out whether they compete with CTP." (Quoted in Sm@rtPartner, 3/19/01)

WEBSENSE chief technology officer Harold Kester on the problem of "cyberslacking" among office workers: "Seventy percent of Internet porn traffic occurs between the hours of nine and five." (Quoted in Information Week, 1/22/01)

AMAZON.COM spokesman Bill Curry on why investors should let his company reset the price of employee options: "Every employee has the power to reprice their options package. It's called, OI quit.'" (Quoted in The Industry Standard, 3/26/01)

CERNER CORP. chief executive Neal Patterson on his feeling that the company's parking lot is an appropriate measure of employee commitment: "It should be substantially full at 7:30 a.m. and 6:30 p.m. The pizza man should show up at 7:30 p.m. to feed the starving teams working late. The lot should be half full on Saturday mornings." (Quoted in The Wall Street Journal, 3/30/01)


COPYRIGHT 2001 Soft-letter Reproduced with permission of the copyright holder. Further reproduction or distribution is prohibited without permission.
Copyright 2001, Gale Group. All rights reserved. Gale Group is a Thomson Corporation Company.
NOTE: All illustrations and photos have been removed from this article.



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