Professional services providers need to keep track of billable hours and evaluate real-time data to measure the profitability of each project and service throughout its entire life cycle. Cost overruns can slip by unnoticed unless time and expenses are rigorously recorded and measured.
A variety of professional services automation (PSA) software solutions are available that will improve your business’s bottom line.
Our buyer’s guide will cover:
PSA software assists with project and resource management for service-based companies like consulting, architecture, engineering, accounting, IT, and legal firms. PSA software will help you:
|Billing & Invoicing||Creates client-facing documents that describe the services provided, the client’s payment responsibility, and payment due date.|
|Time Tracking||Tracks how many billable and non-billable hours were used and what project or service the hours were logged towards (if applicable).|
|Expense Tracking||Tracks the costs of services provided including labor, and materials and tools used for a project.|
|Project Management||Allows you to see real-time costs of the services provided vs. the estimates to ensure profitability at any stage of the project, manage project schedules and team assignments, and view real-time project status updates.|
|Customer Relationship Management||Keeps track of customer contact information and service history, and also includes issue ticketing, invoice and quote creation, and lead & opportunity tracking.|
|Budgeting & Forecasting||Creates detailed corporate financial plans that estimate future revenue and expenses.|
|Resource Management||For professional service industries, resource management tracks human resources and keeps information on employee certifications and experience to assign specific employees with relevant clients. Includes rolling, predictive, collaborative, and departmentalized budgeting, as well as comparative data on estimated budget vs. actual cost.|
|Document Management||Keeps track of files and documents needed for a project including CAD drawings, tax returns, legal documents, contracts, and other important information you need to store securely and access easily.|
|Reporting||Provides insights into resources used for service calls and projects, real-time visibility into profitability at any point in the service, and analyzes expenses and revenue, so you can determine which services are the most profitable.|
|Help Desk||Sends alerts to technicians when an issue or ticket is submitted, updated, or closed to ensure prompt responses.|
|Procurement||Create purchase orders of materials and products needed to perform a specific project or service. Track vendors, items and services purchased, purchase quantities, and delivery timeframes.|
Real-time reporting and analytics - PSA software’s real-time analytics and reporting functionalities give you the ability to make informed decisions based on current operational and financial data.
Lower administration costs - Manually updating and tracking data in spreadsheets or on paper is time-consuming and inefficient. PSA software automates many processes including some data entry. Once you have data entered into the system, it can populate in other places automatically.
Company-wide document and information sharing - Document sharing lets all departments from sales and customer support to billing see essential information like customer contact info, project status, and invoices.
Designed specifically for service industries - PSA software has industry-specific features tailored to service industries. These systems track and manage both sales and fulfillment, so you don’t have to switch been a customer relationship management system and project management tool to find important information.
Track profitability - PSA software tracks both revenue and profitability, giving you a better insight into how your business is doing as a whole. Revenue only looks at the amount of money your company brings in and doesn’t include expenses. To measure profit, you have to evaluate revenue minus the cost of services provided and related expenses like sales commission, taxes, and operating expenses.
SPI Research’s “2017 Professional Services Automation End-user Survey” asked 68 organizations how PSA benefitted their businesses. The survey found that respondents reported significant improvements in some core performance metrics after implementing PSA software:
|Key Performance Indicator||Pre-PSA||Post-PSA||Absolute Improvement|
|Project Staffing Time||6.96 days||5.52 days||1.44 days|
|Percent of Projects Cancelled||2.2%||1.7%||0.5%|
|Percent of On-Time Project Delivery||72.5%||81.5%||9.0%|
|Percent of On-Budget Projects||71.3%||79.9%||8.4%|
|Employee Billable Utilization||63.6%||69.6%||6.0%|
|Time to Generate Invoices||5.87 days||3.13 days||2.74 days|
|Days Sales Outstanding||46.1||39.0||7.1|
Source: Service Performance Insight, “2017 Professional Services Automation End-user Survey”
|Industry/Business Type||Some Software Features To Look For:|
|Consultants||Scheduling that lets you match particular consultants with specific projects based on certifications, preferences, experience, and skills.
Billing that lets you charge clients by the hour or day, or a fixed price based on delivery milestones.
|Architects & Engineers||Project management that gives you visibility into scheduling and costs to avoid going over deadlines and budgets, as well as giving you the ability to adjust project details as client needs change.
Document management that makes it easy to share large files and project information with clients, members of your team, and third parties. You can also obtain digital signatures and store service contracts in one place.
|Legal Firms||Resource management that lets you assign specific lawyers with clients based on their specialty and the clients’ needs.
Time and expense tracking to monitor billable hours and track profitability.
|IT||Tracking and managing product sales, maintenance services, ongoing retainer-based support fees, and licensing.
Tracking status and resource assignments for billable consulting projects and non-billable development.
|CPAs||Tracking progress on projects for client-specified deliverables like company audits or tax returns.
Resource management that ensures the right accountants are working with clients that fit their expertise.
Increased competition - Modern technology allows potential customers to communicate with companies around the world. Your business needs to not only keep up with the latest technological trends but also needs to meet the ever-increasing expectations of your clients. Mavenlink and Research Now surveyed 576 service-based industries and found that 80% of respondents stated competition grew over the past year, and 93% stated client expectations have been increasing. Quality of work, the speed of delivery, cost of work, transparency, and accountability were the most common areas where client expectations are increasing. Meeting client expectations will help your business grow a loyal customer base and stay ahead of your competition.
Managing billable hours - Professional service industries often rely on billable hours for projects. Not knowing how long something should take or having employees taking too long on a project is costly. Clients will also get upset if they were billed for a longer amount of time than the project should have taken. PSA software features time & expense tracking so you can monitor how long specific projects are taking. You’ll be able to compare projects and set maximum time lengths to keep projects from going over.
Bringing in new business - A survey by Hinge Research Institute found that 72.1% of 523 professional services firms identified generating new business as their biggest challenge. Having PSA software that automates admin processes gives your staff more time to focus on providing better customer service to bring in new business. Satisfied customers are more likely to be repeat business and provide referrals to your company. Your team will also have more time to focus on sales to generate business.
Finding and retaining good employees - The next biggest challenge facing professional service firms according to the Hinge Research Institute survey mentioned above was finding and keeping good employees at 35.9%. Some software solutions will let you match employees with specific projects that fit their interests to keep them motivated and reduce turnover.
Virtual firms - Evolving technology and increasing accessibility with connected smartphones and mobile devices make virtual firms a more viable option for professional service industries. Having remote workers will give you a broader talent pool to pick from and save money on real estate and utilities. PSA software will keep you and your employees organized no matter where they’re located.
PSA software expected to grow to $17.33 billion by 2025 - According to a report by Accuray Research LLP, “the Global Professional Service Automation Market is poised to grow at a CAGR of around 10.1% over the next decade to reach approximately $17.33 billion by 2025”. The study evaluated market trends, supply chain trends, and technological advancements, and details market analysis from industry professionals in 23 countries.
Automation of back-end office processes - More businesses are automating back-end processes to save money and improve efficiency. For example, more professional service companies are keeping electronic check records and managing documents online instead of storing large amounts of paper files.