formerly FinancialForce
formerly FinancialForce
Professional Services Automation (PSA) refers to the automated management of core business processes by professional services organizations in management consultancies, software, cyber security, financial services, internet information services, and other services providers.
PSA software can efficiently optimize multiple business processes to enhance delivery execution and overall profitability. By offering a single source of certainty, PSA cloud software consolidates management of the entire lifecycle of service engagements—everything from initial point of contact with clients and creation of proposals to project delivery, billing, and analysis. This comprehensive view of delivery provides valuable insights and improves business agility.
A central system for managing the end-to-end lifecycle of service engagements, PSA is a modern solution for business planning, offering a consolidated view of the best services, projects, clients, and people to translate a business plan into reality.
While PSA began as a tool largely focused on enabling project- and services-driven organizations to better plan, staff, execute, and collect relevant information related to projects, it has evolved into much more than that. From multinational professional services firms to rapidly growing technology companies, today’s PSA solutions help organizations fill gaps in business processes.
Professional Services Automation software functionality includes:
At the heart of its functionality, a PSA solution can help professionals manage projects effectively, with the means to plan, execute, and monitor projects with precision. Features such as time tracking, task allocation, and progress monitoring are integral, ensuring that projects are delivered within their allocated time frames and budget.
That is, of course, a critical driver of successful Customer Relationship Management (CRM), because it enhances management of interactions with clients and prospects by meticulously tracking opportunities, proposals, and contracts. This not only improves client relations, but also supports the growth and development of business opportunities.
A world-class PSA solution goes beyond simple task-tracking, it drives improvements in:
Another critical functionality of PSA software is resource management, assigning personnel to projects based on a comprehensive understanding of their skills, availability, and appropriateness for specific requirements. This kind of workforce optimization both enhances the efficiency of current execution and facilitates better pipeline planning for future resource needs.
On the topic of resource management, a PSA solution can streamline the tracking of time and expenses through features that improve monitoring of project-specific resources. This precision plays a crucial role in facilitating accurate billing and expense management, ensuring transparency and fairness in financial dealings.
Other key areas that also benefit from a comprehensive PSA solution include:
Financial management is also a key component of PSA, enabling organizations to maintain a firm grip on their financial health. With functions for budgeting, financial forecasting, and integration with existing accounting/ERP software, a solution can ensure that both project-specific and organizational finances are well managed.
Under the financial management umbrella, invoicing processes further exemplify PSA software’s utility. By supporting various billing models—including hourly, fixed fee, and retainer-based billing—it simplifies and streamlines the services financial processes, reducing the margin for error and enhancing efficiency.
The utility of PSA software extends beyond efficiency, it includes key improvements in project financials, including:
Moreover, overarching these components is valuable business intelligence. Through advanced analytics and reporting tools, a PSA solution can offer deep insights into project performance, profitability, resource utilization, and other key performance indicators (KPIs). This analytical capability can be a boon to strategic decision-making and help organizations navigate the complexities of the services landscape with confidence and clarity.
In conjunction with these insights, PSA software is a powerful tool for business planning and forecasting. It provides a comprehensive platform that integrates various aspects of the business, from project management and resource allocation to financial management and reporting.
PSA systems offer a wide range of business benefits that can significantly impact the efficiency, profitability, and client satisfaction of services organizations. A well-oiled solution can improve:
When services organizations shop for PSA software, they generally analyze and choose between two main types: standalone and integrated.
Standalone PSA software is a specialized solution that is characterized by its focused functionality, offering features specifically for project management, time tracking, billing, and other tasks. It operates independently from other business management tools or systems like CRM, ERP, and accounting software, which may necessitate manual data entry or data transfer processes to maintain synchronization across systems.
Because it doesn’t require integration with existing software, adopting and implementing standalone PSA software can be simple and cost-effective.
Integrated PSA software is either part of a broader suite of business management tools or designed to be seamlessly integrated with an organization’s existing CRM, ERP, and financial software. It provides a comprehensive solution that covers all aspects of PSA while facilitating direct data exchange (ideally sharing the same customer record) and integration with other business management systems.
As a unified platform, integrated PSA software reduces the need for multiple standalone solutions. It streamlines operations with a single source of certainty for project and business management, so it can:
Ultimately, the choice between standalone and integrated PSA software depends on an organization’s specific needs, size, and existing software ecosystem.
Organizations aiming to effectively manage the entire lifecycle of billable hours, from contract and forecasting to delivery, billing, and revenue, can benefit from PSA systems. Professional services teams across various industries, including health and life sciences, media and communications, and software and high-tech, can enhance project handoffs, delivery, accounting, and more through PSA.
PSA systems can be seamlessly integrated with CRM and other essential software to manage accounting, billing, revenue management, and analytics, creating a more end-to-end solution.
In a world where remote work is essential, businesses often manage services delivery and resource management using custom-built applications and spreadsheets. PSA offers a superior alternative.
From multinational professional services firms to rapidly scaling technology companies, PSA systems help organizations fill gaps in business processes. Integrating CRM and PSA provides better visibility and alignment for sales and delivery teams, leading to higher margins, accurate customer expectations, increased satisfaction, and improved cash flow.
Service Performance Insight (SPI) reports that organizations using PSA achieve, on average, 12% higher EBITDA compared to those not using PSA. This growth is attributed to increased billable utilization and the efficiency gained from connecting the front and back office.
4%
Average increase in utilization, leading to increased revenue*
$450K
Cost savings from productivity enhancements for project and resource managers**
$225K
Savings from productivity enhancements to reporting and billing functions**
* 1% utilization increase at an average rate of $200/hour leads to $280K additional revenue per 100 consultants
** Actual results from a publicly traded, US-based software company with approximately 1,000 employees