Every year, SPI Research releases their Professional Services Maturity Benchmark—the most comprehensive study of how services firms actually perform. The 2025 report landed with some sobering numbers.
That number should give every services leader pause. It's below the 75% threshold that historically separates healthy firms from struggling ones. And it represents a steady decline from 73.2% in 2021.
But here's what the headline misses: utilization is a symptom, not the disease. The real question is why—and what it reveals about how professional services firms operate.
The Numbers Tell a Story
The 2025 benchmark surveyed 403 firms representing over 150,000 consultants and nearly $60 billion in revenue. Beyond utilization, the data reveals a broader pattern:
- EBITDA margins fell to 9.8% — the lowest in over a decade, down from 15.4% in 2023
- Revenue growth slowed to 4.6% — well below the 8.7% five-year average
- On-time delivery dropped to 73.4% — meaning 1 in 4 projects are running late
- Revenue per consultant fell to $199K — a direct consequence of underutilization
These aren't independent problems. They're interconnected symptoms of operational fragmentation.
The Gap Between Top Performers and Everyone Else
What's striking in the data is the variance. Firms at SPI's "Level 5" maturity see dramatically different results:
- 739% higher revenue growth than Level 1 firms
- 537% better profit margins
- 71% improvement in billable utilization
The difference isn't talent or market position. It's operational structure. Level 5 firms have systematized how they scope, price, sell, and deliver services. Level 1 firms are still running on spreadsheets and tribal knowledge.
"Firms using professional services automation (PSA) see 10% higher utilization, 24% better project margins, and 28% higher EBITDA than those without."
Why Utilization Is Falling
The surface explanation is economic: cautious client spending, longer sales cycles, hiring slowdowns. But these pressures have existed before without the same impact.
The deeper issue is that most services firms have never built the operational infrastructure to weather volatility. When every engagement is scoped from scratch, when pricing lives in spreadsheets, when delivery knowledge exists only in people's heads—there's no resilience in the system.
Consider what happens when utilization pressure hits:
- Sales rushes to close deals, accepting work that doesn't fit the team's capabilities
- Scoping is compressed, missing complexity that surfaces during delivery
- Resources are assigned without visibility into actual capacity
- Projects overrun, further compressing available capacity
It's a flywheel—but spinning in the wrong direction.
The Path Forward
The firms that will emerge stronger from this period share common characteristics:
1. Service Definitions That Encode Reality
Not marketing descriptions—actual operational definitions of what gets delivered, what it requires, and what drives complexity. This creates the foundation for everything else.
2. Pricing Logic That Reflects Costs
When pricing is disconnected from delivery reality, margin erosion is inevitable. The best firms have explicit pricing rules that account for resource requirements, complexity factors, and risk.
3. Connected Systems, Not Silos
Sales context needs to flow into delivery. Delivery outcomes need to inform future sales. Most firms have a chasm between these functions. The data shows it's costing them.
4. Knowledge That Compounds
Every engagement should make the organization smarter. What was the actual effort versus estimate? What drove overruns? What worked well? Without structure, these lessons evaporate.
Build operational resilience
See how Servantium helps services firms encode their expertise and compound their knowledge.
The Bottom Line
The utilization crisis isn't about working people harder or cutting costs. It's about building the operational infrastructure that lets services firms deliver predictably, price accurately, and learn continuously.
The SPI data is clear: firms that invest in this infrastructure dramatically outperform those that don't. The question isn't whether to build it—it's how quickly you can start.
The industry is going through a correction. The firms that emerge stronger will be the ones that used this moment to build something more resilient than spreadsheets and good intentions.
