Professional services automation (PSA) software offers an alternative to the array of separate project management, time tracking, invoicing, resource planning, business intelligence, and collaboration tools used by many project teams. This guide provides you an introduction to PSA software and offers resources for organisations considering an integrated software solution for managing project delivery.

PSA applications help professional services providers manage client engagements throughout the project lifecycle. A project starts when a sales opportunity is created, the deal is closed, and resources are allocated to deliver the work. The cycle nears completion when invoices are issued and cash is collected.

PSA software establishes a consistent process for planning, managing, and measuring the performance of each project throughout its lifecycle. By centralising business processes and data, services can be delivered more predictably, and repetitive manual processes streamlined or automated. It is analogous to Enterprise Resource Planning (ERP) software, and PSA is sometimes referred to as ERP for services organisations.

What are the Advantages of PSAs?

While the advantages of a specific PSA solution depends on its capabilities (and how they are used), the central benefit of PSA software is enabling people who are responsible for business performance to manage and measure service delivery at scale. Reporting features enable account and resource managers to identify trends and allocate staff to match demand. Executives can see where the business is performing well and where there are opportunities to improve certain areas.

Effective PSA applications help organisations do three things:

Easily Manage Projects (e.g., by reducing spreadsheet time)
Optimise Resource Use (e.g., by improving utilisation rates)
Drive Stronger Margins (e.g., through greater reporting and visibility)
PSA tools can also help organisations gain control over their project, financial, timeline, and resource data. organisations often choose to adopt and/or upgrade their PSA tools when they need to increase headcount, when their demand increases, when their range of services needs to grow to meet client needs, when they expand their market geographically, or when projects, deadlines and timelines become more numerous and difficult to manage using manual processes. A great PSA tool keeps top thinkers out of spreadsheets and more engaged with the data at a high level, to make decisions that drive greater profitability.

What are the Disadvantages of Professional Services Automation (PSA) Software?

PSA software can be purchased commercially off the shelf (COTS) or built in house. Both require implementation, business process reengineering, and user training, all of which incur costs in staff time or budgets. COTS solutions may have limited integrations and limited customisability; organisations opting to purchase PSA software must select an option that fits a majority of their feature needs, integrates with the systems they already use, or offers an API to build their own integrations. Homegrown solutions come with their own limitations, including costly maintenance, upgrades, and integration build-out costs. Homegrown solutions are ideal for organisations that have a great need for custom functionality combined with significant internal expertise and financial resources to sustain a custom software application indefinitely.

Choosing a Professional Services Automation (PSA) Software

PSA applications typically advertise similar capabilities (e.g., accounting, resource planning, project collaboration) but vary widely in the depth of those capabilities. User interfaces also differ significantly, which has implications for user adoption and team morale.

At a minimum, the system should:

Include details about current and future availability to better understand who is available to take on project work at the task level
Track skills and proficiencies to improve the matching of consultants to projects and key financial data related to resources (e.g. cost and bill rates) that will impact the profitability of projects.
To select the right PSA solution for your team, start by identifying your organisation’s objectives and needs. Try to state your requirements in terms of business objectives (e.g., “organisation will use this PSA to see who is spending time on which projects”) rather than in overly prescriptive features (e.g., “organisation wants a button that generates a PDF of today’s time entries”). Next, prioritise your requirements into must-haves and nice-to-haves. You will likely need to make tradeoffs between different applications that offer different capabilities. Remember to consider qualitative requirements like user experience, since this will impact the success of your software implementation.

Make a Final Evaluation

Once you have a draft list of requirements, you can begin evaluating software providers. Software comparison sites like GetApp and Capterra provide lists of leading applications and reviews where current customers describe their experiences.

Once you’ve developed a list of vendors to consider, schedule personal demos to see how the applications perform. After each demo, ask yourself (or your team) core evaluation questions.

Here are some to get you started:

1. Does this app meet my team’s key requirements?

2. Would my team enjoy using this app on a daily basis?

3. How would my stakeholders access the app? (Can I get mobile access?)

4. How does the app handle security?

5. How does the app link to my other applications (e.g., accounting, billing, CRM, sales)?

6. What tracking functions (e.g., budget, invoices, milestones, resource utilization) does the app offer and how well?

7. How does the app handle the unique aspects of my business (e.g., custom fields)?

8. How easy does the app make it to build custom reports?

9. How does the app display information? Can my stakeholders easily spot trends?

By: Tim Barton-Wines