Most companies in the IT service industry have suffered from low profitability although this industry is highly value added, which may result in losing the competitiveness of the industry. The purpose of this study is to identify the influencing factors on the profit improvement rate of IT service projects and suggest how to improve the profit improvement rate, thus recovering the competitiveness of the IT service industry. The 273 IT service projects conducted by an IT service company in Korea during the past three years were analyzed and the project managers who performed these projects responded to the questionnaire developed in this study. The result from the analysis of data collected shows that the influencing factors on the profit improvement rate of IT service projects include scheduling, experience in similar projects, the leadership of project leaders, the level of team skills, relationship with clients, and clients support.