5 Tips for Selecting a Professional Services Automation Platform

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Ten years ago when you asked a professional services (PS) executive what tool they used to manage PS resources, projects, and billables, the answer was almost always the same: spreadsheets. Professional services automation, or PSA, was just being introduced a decade ago, and while it took a few years for PS organizations to realize the benefits of automation, today questions about selecting PSA platforms have become my most frequent inquiry topic from TSIA members. In this blog post, I will share the information I provide to members in these inquiries, and hopefully give you a head start on your next PSA implementation!

Recent Trends in Professional Services Automation

Adoption has grown over the years, and according to my 2015 Global Technology Survey, over three-fourths of PS members, 77%, currently have some sort of PSA system in place, up from just 58% in 2014.

PSA_Adoption.png

PSA adoption is becoming mainistream.
Source: TSIA Global Technology Survey.

While some companies are shopping for their very first PSA, many members are now looking for a replacement to a “starter” system they have now outgrown, wanting more scalability and sophistication than their legacy system possesses.

How Automation Can Help

PSA is a must-have technology for professional services organizations. (Tweet this!) Not only does it automate core tasks like resource assignments and project management, it can provide granular information on the profitability of individual service offerings, projects, or teams, and help companies understand which bundles of services have the best success rates with customers as well as the most attractive margins for delivery. PSA technology provides automation in three major areas:

Resource Management

By creating an inventory of consultants, along with their experience, training, and certifications, and target billable rates, projects can be automatically resourced while keeping an eye on all parameters. This maximizes the rate realization while providing the right set of skills and mix of experience required for a successful project team.

Project Management

Beyond Gantt charts, PSA project management tools include project activity tracking and milestone dates as well as management dashboards to identify projects going out of bounds early enough to take corrective action.

Project Accounting

Billing for PS projects can be very complex, especially with payments tied to project milestones, pay-as-you-go contracts, and longer-term contracts verging on managed service agreements. PSA software can tightly integrate to your enterprise resource management (ERP) system for billing customers and tracking days sales outstanding (DSO) for PS projects, a key indicator of customer satisfaction.

5 Criteria to Consider When Choosing Your PSA Platform

Based on many conversations with members about how they selected a solution, and whether they ultimately selected the right platform, five criteria have emerged as the top considerations when selecting a PSA platform: your existing CRM platform, your existing ERP platform, deployment model, analytics and dashboard requirements, and mobile and social requirements.

#1: CRM Platform

Based on conversations with TSIA members and those experiencing the best success one year following a PSA implementation, the most important criteria for selecting a PSA platform is identifying a vendor who can integrate to your existing CRM system. (Tweet this!) Sharing data and processes between PSA and customer relationship management (CRM) is a critical part of automating the quote-to-cash process. This integration provides visibility into the quoting process, account and contract details, and visibility for sales into active projects. Integrating CRM and PSA also allows project information to be passed back into CRM, so sales account managers can easily find the current status of all live projects without having to search in multiple systems or lob a call to the project team.

Major CRM players offer pre-integrated PSA modules that should save you on deployment costs. Cloud CRM vendors may offer multiple PSA partners within their partner ecosystem, again cutting the time and cost of integration. Best-of-breed PSA providers offer packaged integrations to popular CRM platforms, so ask for customer references who have integrated to the same system you have to judge how robust the integration is. What you want to avoid is becoming the beta site for a first-time integration, which definitely brings additional risk to any implementation project.

#2: ERP Platform

The second most important decision factor in selecting a PSA platform is identifying providers who can tightly integrate to your existing enterprise resource planning (ERP) or billing system. ERP integration automates project billing, vendor-specific objective evidence (VSOE), and DSO tracking. While TSIA considers CRM integration as the most important consideration when selecting PSA, multiple members who were struggling with PS billing problems have considered ERP integration as a bigger priority during platform selection. As with CRM, when evaluating PSA providers you should look at tools with predefined integration to your existing ERP system. For highly customized legacy ERP systems, talk to references who have the same ERP system that you have to find out how much initial and ongoing effort has been required to create and maintain the integration.

#3: Deployment Model

As IT departments have been shrinking over the last decade, more PS organizations are interested in a cloud PSA solution to lower upfront investment and eliminate much of the cost of ownership for the platform. (Tweet this!) Be realistic about your available IT resources, but also be realistic about the breadth and depth of functionality required, and be certain the solution you select can meet requirements in both areas. Currently, PSA solutions are available in three deployment models: On-Premise, Hosted, and SaaS/On-Demand.

Cloud solutions are becoming very popular, in many cases opening up PSA functionality to smaller firms for the first time. If you are using a cloud CRM platform, you may want to start your PSA search with the PSA vendors available pre-integrated in the CRM vendor’s partner ecosystem. Cloud PSA tools vary in depth and breadth, so be sure that the advantages of selecting a cloud provider (lower upfront and maintenance costs, little or no administration) outweighs any functional tradeoffs.

#4: Analytics/Dashboards

Professional services organizations are rapidly becoming more demanding with requirements for reporting, moving from Excel-based reports to more complex analytics and real-time dashboards. Dashboards can be created to prompt managers when projects are going off kilter before things get too bad, as well as provide trend information on most successful and most profitable projects and bundles, and which to avoid.

Best-of-breed PSA platforms are evolving reporting and analytics in each release, either through internal development or by OEM-ing a third-party analytics platform. A common complaint from TSIA members is that their company has invested in analytics, but the system does not lend itself to adoption by business users. PSA solutions, however, create out-of-box dashboards with configuration controls targeting PSA management—not data scientists.

Note that some cloud solutions are designed with smaller firms in mind and are less sophisticated, particularly around reporting and analytics. If you are progressive in this area, be very clear about your requirements and expectations up front, and fully understand what reporting capabilities are available out of box and what skills are required to create or customize dashboards.

#5: Mobility

Professional services consultants spend a lot of time on site with customers and traveling to and from appointments. Increased mobile capabilities are emerging as a driver for PSA spending, allowing consultants to be as productive as possible, even when flying coast to coast with no Internet connection. When evaluating PSA platforms, consider mobile capabilities in three areas: mobile clients, off-line access, and collaboration tools.

While increased mobility is on every PSA vendor's road map, some providers are farther ahead than others, so if this is a key criterion for your project, ask what functionality exists and check with customer references to verify. Be especially careful if you have standardized on a particular smartphone or tablet to make sure this mobile operating system or device is a priority for the vendor.

Hopefully this will give you a good idea of what to consider when shopping for a PSA platform. For TSIA members, I have collected quite a few RFI/RFP templates for PSA from both TSIA partners and members. If you are considering launching a search for PSA, please let me know and I would be happy to share the RFP library with you. It is always helpful to see requirement lists deemed important by other companies to help you decide what capabilities you should prioritize in your own technology search.

About the Author 

John_RagsdaleJohn Ragsdale is vice president of technology and social research for TSIA. His area of expertise is in creating strategies for improving the service operations and overall customer experience by leveraging innovative technology. Ragsdale drives TSIA's highly regarded technology research agenda, delivering insightful, thought-leadership research and analysis on the most pressing business issues facing services leaders to enable them to better plan and execute their service strategies.

In 2012, Ragsdale released his first book, Lessons Unlearned, which chronicles his 25-year career inside the customer service industry. Filled with best and worst practices, insider gossip, and sometimes-shocking real-world stories, Lessons Unlearned helps support managers, company executives, and even customers improve service interactions.

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Topics: professional services, professional services automation (PSA)

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