Metrics to Track for an IT Service Consulting Business

Here are some metrics that an IT service consulting business may want to track:

1. Billable hours: This measures how many hours your consultants are spending on billable work for clients. It's important to track this metric to ensure that your team is working efficiently and effectively.
2. Utilization rate: This measures the percentage of billable hours worked compared to total available hours. A high utilization rate means that your team is working efficiently and generating revenue for the business.
3. Client satisfaction: This measures how satisfied your clients are with the services provided by your consulting business. It's important to track this metric to ensure that your clients are happy and to identify areas for improvement.
4. Sales pipeline: This measures the number of potential sales opportunities in the pipeline and their estimated value. It's important to track this metric to ensure that you have a healthy sales pipeline and to identify any areas for improvement in your sales process.
5. Revenue growth: This measures the growth in revenue over time. It's important to track this metric to ensure that your business is growing and to identify any areas for improvement in your sales and marketing efforts.
6. Employee satisfaction: This measures how satisfied your employees are with their work and the company culture. It's important to track this metric to identify any issues with employee retention and to create a positive work environment.
7. Profit margin: This measures the percentage of revenue that is left over after all expenses have been paid. It's important to track this metric to ensure that your business is profitable and to identify areas for cost savings.

Monthly Recurring Revenue (MRR)

Monthly Recurring Revenue (MRR) is a metric used by businesses that offer subscription-based services to measure the total amount of revenue they generate from their recurring monthly subscriptions. It's a way to track the predictable revenue stream that comes from subscription-based business models.

To calculate MRR, you take the total number of customers you have and multiply it by the monthly subscription fee for each customer.

For example, let's say a software company has 100 customers, each paying $50 per month for the service. Their MRR would be $5,000 (100 customers x $50 per month).

MRR is an important metric for subscription-based businesses because it provides a more predictable and stable revenue stream than one-time purchases or variable sales. It can also help businesses to forecast revenue and make decisions about growth and investment. By tracking changes in MRR over time, businesses can gain insights into their customer acquisition and retention strategies and identify areas for improvement.

Net Dollar Retention (NDR)

Net Dollar Retention (NDR) is a metric used by businesses to measure how much revenue they are able to retain from their existing customers over a given period of time. It's calculated by dividing the total revenue generated from existing customers at the end of a period by the total revenue generated from those same customers at the beginning of that period.

NDR is important for businesses because it shows how effective they are at keeping their customers and generating repeat business. A high NDR means that customers are happy with the company's product or service and are willing to continue buying from them, which can lead to more revenue and growth in the long run.

For example, let's say a company starts a quarter with $100,000 in revenue from existing customers, and by the end of the quarter, they have generated $110,000 in revenue from those same customers. If we divide $110,000 by $100,000 and multiply by 100, we get an NDR of 110%.

NDR is sometimes also referred to as Net Revenue Retention (NRR).

A high NDR means that a business is able to retain a significant amount of revenue from their existing customer base over time. This can be a positive sign for investors, as it suggests that the business has a loyal customer base and is able to generate recurring revenue. On the other hand, a low NDR may indicate that a business is struggling to retain customers and may need to focus on improving customer satisfaction or retention strategies.

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Project Manager Role in Agile Development

Agile project management often puts the traditional project manager in a difficult position. He or she is told, for example, to make scope/schedule tradeoff decisions knowing that a product manager or customer might second-guess those decisions if the project goes poorly.

Agile acknowledges this difficult position, and distributes the traditional project manager's responsibilities. What is agile about this new paradigm is that many of these duties, such as task assignment and day-to-day project decisions, revert back to the team, where they rightfully belong.

Responsibility for scope and schedule tradeoff goes to the product owner. Quality management becomes a responsibility shared among the team, a product owner and ScrumMaster. Other traditional tasks are distributed as well among a team’s agile project management roles.

In a very large agile project with 200 to 500 – even 1,000 people, we must introduce more points of coordination and agile project management than small-scale implementation.

To coordinate the work of many teams, larger projects sometimes include the role of a traditional "project manager." While involving someone on the project with this title or background can be very helpful, we need to be careful of the baggage associated with the project manager title.

Even on a very large agile project, the team will still do much of the project management. For example, teams decide how to allocate tasks, not a project manager; so the project manager role becomes more of a project coordinator.

Duties would include allocating and tracking the budget; communicating with outside stakeholders, contractors and others; maintaining the risk census with guidance from the teams, ScrumMasters and product owners; and so on. This is a true agile project management role.

Via Mountain Goat Software

Aik Alif by Bulleh Shah

Parh parh ilm te faazil hoya
Te kaday apnay aap nu parhya ee na

(You read to become all knowledgeable
But you never read yourself)

You read so many books to know it all,
yet fail to ever read your heart at all.

Bhaj bhaj warna ay mandir maseeti
Te kaday mann apnay wich warya ee na

(You run to enter temples and mosques
But you never entered your own heart)

You rush to holy shrines to play a part,
Would you dare enter the shrine of your heart

Larna ay roz shaitaan de naal
Te kadi nafs apnay naal larya ee na

(Everyday you fight Satan
But you never fight your own Ego)

You are quick to attack the evil one,
yet pride is a battle you have not won.

Bulleh Shah asmaani ud-deya pharonda ay
Te jera ghar betha unoon pharya ee na

(Bulleh Shah you try grabbing that which is in the sky
But you never get hold of What sits inside you)

You grab for a star you can control,
yet fail to grasp the light in your soul.

Bas kareen o yaar

(Stop it all my friend)

Let the race end, my friend

Via FAiz

Power of Intuition

I totally agree with what Steve Jobs had to say about his 7 month stay in India and the profound effect it had on him.

“Coming back to America was, for me, much more of a cultural shock than going to India. The people in the Indian countryside don’t use their intellect like we do, they use their intuition instead, and their intuition is far more developed than in the rest of the world. Intuition is a very powerful thing, more powerful than intellect, in my opinion. That’s had a big impact on my work.

Western rational thought is not an innate human characteristic; it is learned and is the great achievement of Western civilization. In the villages of India, they never learned it. They learned something else, which is in some ways just as valuable but in other ways is not. That’s the power of intuition and experiential wisdom.

Coming back after seven months in Indian villages, I saw the craziness of the Western world as well as its capacity for rational thought. If you just sit and observe, you will see how restless your mind is. If you try to calm it, it only makes it worse, but over time it does calm, and when it does, there’s room to hear more subtle things—that’s when your intuition starts to blossom and you start to see things more clearly and be in the present more. Your mind just slows down, and you see a tremendous expanse in the moment. You see so much more than you could see before. It’s a discipline; you have to practice it.”

Excerpt From: Isaacson, Walter. “Steve Jobs.” Simon & Schuster, 2011.

Reality Distortion Field

I recently discovered that Dilbert has already taken a gibe on Steve Jobs' "reality distortion field." For the unaware, reality distortion field is a term used to describe Steve Jobs' charisma and his ability to convince himself and others to believe almost anything.