The typical IT service provider (with a blend of MSP and VAR revenue) generates about 8 percent to 9 percent EBITDA profit margin, according to Service Leadership Inc. Top MSPs push toward 20 percent EBITDA profit margin and beyond. So how do those figures compare to the overall professional services market -- involving consulting firms and service providers across all industries?
The latest Service Performance Insight (SPI) readership, based on a survey of 416 organizations, reveals some interesting data points (see chart below). Chief among them: Professional services firms (consulting companies in multiple verticals) can march toward 20 percent EBITDA profit margins, SPI found. That's pretty darn impressive. Plus, professional services firms can grow at a healthy 20 percent per year -- though managing project growth (vs. more predictable recurring revenues) can be tricky. Here are more stats from SPI's 2017 report:
Top 20 Most Profitable Professional Services Firms 2017 (Based On EBITDA Profit Margin)
The top performers revealed in SPI’s 2017 benchmark study are listed below. ChannelE2E has sorted them alphabetically, and EBITDA margins for each company remain confidential.
3. Aspect specializes in contact center, self-service and workforce solutions.
4. Centrify specializes in Privileged Identity Management and Identity-as-a-Service across across hybrid, cloud, mobile and on-premises IT environments.
5. CirrusOne is a consulting firm that delivers CPQ (configure, price, quote), CLM (contract lifecycle management), billing and revenue-centric solutions.
6. Collaborative Solutions is a global finance and HR transformation consultancy focused on cloud solutions -- particularly Workday offerings.
8. e4 Services is a healthcare information technology consulting firm specializing in clinical, hospital information management and revenue cycle services.
10. Integrated Project Management Company, Inc. (IPM) is a project management consulting firm.
Continue to Page 2 for companies ranked 11-20.
The Top 20 Professional Services Firms: Companies 11-20
11. Jacobus Consulting is a healthcare consulting firm focused on improving patient care and quality, system and workflow operations, and financial performance.
12. LDS is a consulting firm that envisions and designs digital solutions for global organizations.
13. Mason Advisory is a UK-based IT consulting firm focused on everything from architecture and technology to cybersecurity.
14. Neueda is a global IT consultancy, training and software development company with specific industry focus on public sector, utilities and capital markets.
15. Pariveda Solutions is a management consulting firm specializing in performance improvement. Key focus areas include strategy, mobility, cloud, data, portals, CRM, enterprise integration, user experience and custom software.
16. SaaSfocus Inc. is a cloud services consulting company focused on Salesforce.com deployments.
17. Stoneridge Software is a Microsoft Dynamics partner, with an emphasis on ERP implementation and support.
18. Superior Controls, Inc. delivers automation and control systems integration services. The company is working with Banks Integration Group , a systems integrator headquartered in Vacaville, California.
Two companies within the top 20 declined to be listed. If you'd like to see Service Performance Insight's complete report you can find it here.