Kimble Applications has announced the introduction of diagnostic analytics in its latest release of Kimble software. The company believes it is the first to offer such sophistication. The new functionality brings insights to business leaders about how their Professional Services business is performing.
Enterprise Times spoke to Rob Bruce, VP Sales, Kimble about the Winter 18 release. The tool analyses data both back and forward six months to analyse what is happening with the business. The forward looking analysis uses forecast and planning data from within Kimble. This can include a combination of firm probable and possible commitments. Though generally only the first two are used. Forecast data can include proposed changes in salaries. Although the tool does not yet include scenario and what if planning, though this is something Kimble may look to add in the future.
The executive tool allows users to identify trends quickly and dig down to find the underlying cause. One of the recognised issues with Professional Services organisations is that they are run with varying degrees of profitability. According to Bruce the lowest tier run on margins of 2.5% while the most successful operate at 32%. This tool should help to improve those margins as it highlights where the issues might lie.
Improving those margins is critical for any business leader. Understanding why profitability is reducing is often less than obvious and it is certainly not down to a volume of metrics. Bruce cited one CEO as saying when he joined a firm: ”You guys have got metrics coming out or your ears. Where is the margin on projects compared to what the margin we sold them at because I believe that is the problem.” Companies spend hours producing reports around key metrics without always getting to the bottom of the problem.
It is this problem that the diagnostics analytics aims to solve. Bruce said: “Diagnostics is a tool that a business unit manager or analyst will pick up and go through.” The system allows the user to answer the why question. They are able to drill down into profitability, which is made up at a high level of revenues and costs. They can then drill down further and look at elements such as business days in the month, average billing rate, resource count and utilization across several factors such as grade, location, or product type (fixed price or T&M, recurring).
Prescriptive Analytics next?
Kimble already produce some prescriptive analytics at a project management level. In fact they have more than 25 “charms” that deliver insights and suggestions to the front end workers. Will business leaders now get something similar?
The new tool delivers an understanding of the reasons for a downwards trend, the question is ‘what is next’? Bruce stated: “I have seen it on the roadmap. We are already at the stage where understanding the problem is more than half the battle. If what you are looking at is a trend where margin is going doing because revenue and utilization are going down, you need to look at utilization. That might be different from revenues going down because average rates are going down because we are doing increasing amounts of fixed price work.”
The problem is that business is never that simple. Impressively this solution is not built using Einstein. Something Kimble Application can’t wait to get their hands is the ISV package. This will allow the company to add a level of complexity to these analytics. The Kimble solution aims to deliver best practices for Professional Services Organisations. Understanding how successful that is, is important.
Bruce also revealed that Kimble would launch an app in the next few weeks for any organization. Its purpose, Bruce said, is: ”to look at performance in their business against benchmark data from one of the industry leading benchmark sources.“ According to Bruce this would allow leaders to compare growth rate, margin and overheads against peers to determine where they stood.
Winter 18 release is a landmark release
This is not a landmark release just because of the diagnostic analytics, though that is impressive. It is because this enables Kimble Applications to push releases. Bruce explained that from this release forwards updates could be completed in a matter of hours. Though it should be said that planning and testing could take longer.
Kimble will look to move all its customers onto this release as quickly as possible. The benefits are that it should enable the organization to scale. The challenge of software updates on a platform such a Salesforce is that Kimble currently support multiple versions. For Kimble, who want to rapidly expand their footprint in the US this is a serious challenge. In moving to a push update methodology they can reduce that number significantly. This will drive down their own costs.
Winter 18 is already GA, with one customer migrating last weekend. It will be interesting to see how quickly it can bring customers onto this version
What does this mean
For customers Bruce is clear on the benefits. He believes it will enable business leaders to see the wood and the trees. He commented: “Seeing the wood for the trees is very important because it allows them to take decisive action that will increase their profitability and scalabilty.“
Ultimately it will be those business leaders who determine whether this new feature is a success. While it may seem simplistic it is built on a hierarchy of understanding of profitability that Kimble Applications knows from its long experience in the industry. The next step, prescriptive analytics, may be further away than Bruce hopes though. The new benchmark app, when it becomes available, will be interesting but probably the most significant change for Kimble is the change to push releases. This should free up resources over time to help with expansion and developing additional functionality for the product.