Authored by Sarah Edwards, Chief Product Officer at Kantata

Every professional services leader has experienced that uncomfortable board meeting. The one where someone asks, “How do we compare to our competitors?” and the room falls silent. Not because the firm is performing poorly, but because no one actually knows.

This knowledge gap is more common — and more costly — than most firms care to admit. In professional services, where intellectual capital and operational efficiency drive profitability, flying blind on comparative performance is a significant competitive disadvantage. 

And the stakes are only rising. Top talent evaluates potential employers based on how firms operate, not just what they offer. And investors — particularly in private equity-backed firms — demand clear evidence that leadership can optimise operations against industry standards.

So despite the proliferation of data and analytics tools, meaningful industry benchmarking remains frustratingly elusive for many firms. Why is this?

The benchmarking blindspot

Professional services firms excel at strategic analysis for clients but often resist turning that same analytical lens on themselves. There are several reasons for this reluctance.

First, there’s the data challenge. Many firms operate on fragmented systems where resourcing data lives separately from project delivery information, which in turn is disconnected from financial reporting. Assembling a coherent picture of performance requires significant manual effort, making regular benchmarking impractical.

Second, there’s a cultural dimension. Professional services firms pride themselves on unique approaches and bespoke solutions. Benchmarking against industry standards can feel reductive, as though it diminishes the firm’s distinctive value proposition. This is a misunderstanding. Benchmarking operational efficiency doesn’t constrain strategic differentiation—it enables it by freeing up resources for higher-value activities.

Third, many firms simply don’t know where to start. Which metrics matter most? What constitutes “good” performance? How do you find reliable comparison data? These questions, while reasonable, often become roadblocks to taking meaningful action. 

Focus on what matters

The path forward begins with identifying the metrics that most directly impact your firm’s business model and profitability. While every firm is unique, several core benchmarks are universally relevant in professional services. To begin, focus on these three: 

1. Billable Utilisation rate: the percentage of available hours that are billable — provides immediate insight into resource efficiency. Industry standards vary by sector, but most successful professional services firms target utilisation rates between 70-80%. If your firm is significantly below this range, you’re likely carrying excess capacity or struggling with effective resource allocation.

2. Realisation rate: the percentage of quoted fees that are actually collected. This reveals pricing effectiveness and project delivery discipline. Poor realisation rates often indicate scope creep, inadequate change management processes, or pricing that doesn’t reflect the true cost of delivery.

3. Project margin: perhaps the most direct indicator of operational health. Understanding not just firm-wide profitability but project-level margins allows you to identify which types of engagements genuinely contribute to the bottom line and which are destroying value despite generating revenue.

For many organizations today, these three measures function as true north star metrics — the core signals leaders use to judge operational health. But continuous benchmarking also matters because the industry itself is changing what it measures. As AI reshapes delivery models, many firms are placing greater emphasis on revenue per head rather than billable utilisation alone, to understand how technology scales output beyond hours worked. Benchmarking over time helps leaders spot these shifts early—and identify the metrics that will define success in 2030 and beyond.

Building the benchmarking habit

Successful benchmarking isn’t a one-off exercise; it’s an ongoing discipline. The goal is to embed comparative performance analysis into regular business rhythms — quarterly business reviews, annual planning cycles, and operational meetings.

Start by establishing your internal baseline. Before comparing externally, ensure you have reliable, consistent measurement of key metrics across your firm. This often requires addressing data infrastructure challenges, either through better system integration or, increasingly, through purpose-built professional services automation (PSA) platforms that consolidate resourcing, delivery, and financial data.

Once you have confidence in your internal metrics, seek external benchmarks. Where to look? Industry associations often publish anonymised performance data. Peer networks and consulting groups provide informal comparison opportunities. Research firms specialising in professional services like Service Performance Insight (SPI) regularly release sector-specific benchmarking studies.

Don’t let perfect be the enemy of good. Many firms delay benchmarking because they want comprehensive data coverage before they begin. This is counterproductive. Start with the metrics where you have reasonable data quality, even if the picture isn’t complete. You can expand and refine over time.

From insight to action

The true value of benchmarking emerges when it drives decision-making and accountability. When benchmarking reveals that your average project duration exceeds industry norms by 25%, that becomes a concrete improvement target for delivery teams. When utilisation data shows significant variance across practice areas, it prompts strategic questions about resource allocation and hiring plans.

What’s the ideal state? Leading firms create closed-loop processes where benchmarking insights directly inform operational changes, which are then measured in subsequent benchmarking cycles. This transforms benchmarking from a reporting exercise into a continuous improvement engine.

Why waiting is no longer an option

As the saying goes, the best time to start was yesterday—but the second-best time to start is today. Professional services firms can no longer afford to operate on intuition alone. Evolving and continuously adapting is the new norm, and you won’t survive unless you start benchmarking now. 

With benchmarking, you will better know how quickly you are evolving, and if you are moving fast enough. The PS firms that will not only survive but lead are those that embrace data-driven decision-making, with industry benchmarking as a foundational element. The barriers to getting started are lower than many firms assume. The cost of remaining in the dark, however, grows steeper with each passing quarter. 

In her role as Chief Product Officer, Sarah Edwards oversees product strategy across all solutions for Kantata, ensuring a unified, customer-centric approach to product innovation that addresses professional services organizations’ unique challenges. As an experienced consultant, project manager, global practice manager and business leader, Sarah has extensive experience from the ground up on how to manage a successful services business. With more than 27 years in the PS industry, Sarah has lived and worked both in the U.S, and Europe to help customers achieve services success and deliver significant business value.