Driving Professional Services margin improvement for an enterprise software company. Partnering with Waterstone, the company implemented several core PS process and structural initiatives and drove over 14 points of contribution margin improvement.

The Issue

An enterprise software company’s Professional Services margins were underperforming as a result of several operational issues. The company’s PS business was experiencing low margins resulting from low billable headcount utilization, high variability in bid/quote and project delivery processes, and a highly complex and inefficient organizational structure.

The Approach

Waterstone worked closely with the PS leadership team to identify and address operational issues over a 3+ year period. Waterstone held a series of discovery days and facilitated working sessions with the PS leadership team to identify process gaps, organizational inefficiencies, and to understand project delivery variability. The Waterstone team identified several performance improvement areas, focusing on resource management, project delivery density and roles, and delivery team structure/alignment. The team developed several financial models to measure the financial and operational impact of proposed improvements. We worked with client teams to build a phased execution roadmap, establishing a set of clear initiatives with owners and targeted milestones. The Waterstone team actively drove initiative execution, monitored progress, and facilitated periodic team working sessions to ensure improvement targets were being met.

The Results

A series of initiatives focused on resource management, delivery processes, and organizational structure were implemented, driving significant and lasting margin improvement. Billable utilization has improved 7.5 points and PS contribution margin has improved 14 points. Waterstone continues to serve as a trusted advisor to the company, focused on continued operations improvement.