Not too long ago, if you asked any professional services organization to tell you how they managed client projects, resources and utilization rates, the answer was always the same: spreadsheets. Someone would inevitably create an Excel document that included complicated formulas to identify resource and project needs against existing and projected revenues.

The problem with this system is that spreadsheets are fundamentally not designed for this purpose. Not only do spreadsheets increase access control issues, version control issues and data losses, any changes to a column or row to include a new team member, client or opportunity can change the formulas – leading to inaccurate information and a lot of head scratching by project managers. One study found that a whopping 88 percent of spreadsheets contain errors – and the math adds up on what these mistakes could cost any business.

Fortunately, today there is a plethora of professional services management tools to support the industry. Also known as professional services automation (PSA) tools, this software is more intuitive, modern and scalable to the changing needs of firms. A sophisticated and comprehensive PSA solution not only automates critical tasks such as resource and project management, but it also provides deep insights into areas including resource utilization and project profitability.

With so many tools available in the market, here are the things that firms should look out for when evaluating PSA solutions.

1. Effective resource management – including for global projects. The ebbs and flows of working in a professional services organization mean that the team needed throughout the year will also evolve. A solid PSA solution will not only identify resources required on a project and how many hours against their billable rate, but will also track skills and availability against their profiles. This is particularly helpful when identifying teammates across multiple regions and enabling greater billable utilization. For example, our customer Aon was able to match projects against employee expertise around the globe instantly, helping them increase project forecasts from one or two months to an entire year ahead.

2. Clear project management against activities and milestones. Arguably, one of the biggest challenges in managing so many projects is ensuring that they are completed on time, and on budget. According to McKinsey, large IT projects over $15 million run 45 percent over budget and seven percent over time, while delivering 56 percent less value than predicted. It’s therefore crucial to find a solution that goes beyond Gantt charts to track project activity and milestone dates, as well as include dashboards so that businesses can course correct if a project starts to go awry.

3. Automated and simple time tracking and expense management. Timesheets and expense reports are the backbone of managing project costs and evaluating budget estimates versus actual figures in real-time. Traditionally, project managers needed to contend with multiple spreadsheets containing information from different teams, which would then need to be reconciled to eventually provide the full picture of a project’s progress. Today, even as people become more virtual, remote and flexible in how they work, time and expense data can be easily entered and integrated into a centralized PSA solution, and provide automated notifications well ahead of time if a project is running over time or over budget. It makes a lot more sense to have your resource and time information in one place, rather than reinvent the wheel on every project, every time.

4. Easy invoicing and accounting. After all the time spent working on a project, billing clients is important to minimize the chances for revenue loss. However, billing against projects can be a complicated process – particularly when payments are tied to project milestones, pay-as-you-go contracts, or other complex service agreements. What’s more, all hours worked by staff – including contractors – as well as related client projects expenses need to be accurately captured to produce the right invoice. PSA solutions today can dramatically reduce the time it takes to bill clients by generating an invoice with a few mouse clicks, which can be customized and sent directly to the client from within the system. One of our customers, Xoomworks, was able to improve its invoice turnaround by 30-40 percent thanks to more streamlined time to reimbursement and client billing.

5. Additional software integrations. Besides integrating with timesheets, expense reports and invoicing, sharing data with other software is important to understand the lifecycle and business impact of a project. For example, integrating with a CRM system can better manage contacts, and streamline opportunities against future resource requirements, while integrating with an ERP system can further automate project billing and collection. When assessing a PSA solution, look not only at the project management needs but also at other systems to make sure that all essential project data “talks” to each other.

6. Built-in analytics. To drive business growth and profit margins, companies need real-time visibility into project performance – including insights on resource utilization, billing forecasts, budgets versus actuals, and other key reports. The best PSA solutions in the market have highly configurable and robust dashboards, reporting and analytical tools, which can instantly provide insights on virtually any project, user, and timeframe. These reports can provide at-a-glance data for senior management, or can zoom into focus on specific areas for greater business decision making.

7. Cloud and mobility. Professional services organizations are realizing the benefits of a cloud-based solution as a more cost effective, flexible and secure option. In addition, with so many professional services professionals traveling to and from client projects and other appointments, mobile capabilities are a must-have for a PSA solution. At Replicon, our collaboration with Apple to accelerate iOS adoption in the enterprise means that our mobile application is a consumer-grade and highly intuitive app that makes project management very straightforward for all end users.

A professional services firm can encompass many sectors, including legal services, financial services, marketing and public relations, and technology. However, each business shares common requirements in ensuring project effectiveness, reducing revenue loss, and driving customer satisfaction. As these firms aim to scale their operations, an extensive PSA solution must serve as the foundation for business growth and success.

By: Sangeet Saurabh at Replicon