United States

Automation's impact on margin and efficiency in professional services

Key questions to ask as you assess your technology and business needs

INSIGHT ARTICLE  | 

Organizations functioning in the professional services arena—consulting firms, architectural and engineering businesses, and tax and accounting firms—have unique needs in terms of how they achieve their profitability goals. Whether improving the revenue cycle, tracking projects or allocating resources, the leaders of professional services firms have a variety of complex systems and processes to manage. Taking an eye off one area, or not maximizing resources to the fullest extent in another, can mean project delays, write-offs or even project failures. Leveraging the right professional services automation (PSA) solution is one way a business can optimize the many moving parts of various business .

Game-changing benefits

PSA tools are designed to address the challenges and specific traits of project planning and execution, including resource scheduling, task and activity management, time and expense management, multifaceted billing, and project collaboration. The benefits of using a PSA solution include automating processes, and producing real-time project health updates, margin reporting and forecasting to support informed decision-making. In addition, the end-to-end architecture of a PSA platform can be integrated with your systems, providing simplified visibility into billing, accounts receivable and project tracking. Firms should consider the PSA tier solution level that best meets their needs, from basic project management functionality up to a fully encompassing operational platform. The best solutions work holistically within an organization and can deliver a number of game-changing benefits including improved margins and project scoping, higher utilization, improved project collaboration and effective resource planning.

Important questions to consider

While PSA can deliver a variety of improvements to organizations, it is important for firms to consider several key questions before getting started. Each professional services firm has individual challenges and concerns, and taking a moment to be introspective in terms of your own business issues will point you toward the best PSA solution level for your needs. Important questions to consider include:

  • How well do you measure project margin, both in terms of accuracy and real-time access to data?
  • How do you currently measure project health (e.g., timing, budget trends and critical path items)?
  • Do you undergo a regular resource planning process even if it is manual? Do you have resources dedicated to scheduling project resources? Do you forecast resource needs for future hiring decisions?
  • Do you already have an off-the-shelf or custom project management tool in place, or are project operations primarily managed manually through spreadsheets?
  • How complex are your billing requirements between services and hardware, and what is the impact on revenue recognition? How manual is the current billing process?
  • Do you already have a tool for expense management, or will a PSA solution need to be integrated to invoices?
  • How frequently do you require resources to enter time and at what increments?
  • Do you collaborate with external parties (clients, subcontractors) on projects?
  • Do you need to track skills, experience levels and certifications for managing project resources?

Weighing these questions will provide a foundation for assessing how PSA can improve efficiencies within your professional services firm. In addition, for a more thorough evaluation of the effectiveness of your technology strategy, consider a process and systems assessment to understand further how your organization, business processes and technology systems can work more efficiently within a professional services organization.

Originally published on May 8, 2019, updated and reviewed on August 18, 2021.


YOU MAY ALSO BE INTERESTED IN

CASE STUDY

RSM provides industry specific answers with flexibility to grow

The regional staffing company wanted a comprehensive back-office solution that was specific to their unique needs.

RECORDED WEBCAST

Use technology to effectively manage projects with 360 degree approach

Learn how professional service organizations are managing relationships from initial lead to multiple projects with a 360-degree approach.

RECORDED WEBCAST

Running your services business with NetSuite OpenAir PSA

Learn about NetSuite OpenAir PSA, the best-in-class professional services automation (PSA) software in this webcast on Jan. 31.

INSIGHT ARTICLE

How small to midmarket firms can capitalize on digital transformation

Digital transformation is a reality for SMB's. Middlemarket organizations using QuickBooks can leverage cloud ERP to transform their company

ARTICLE

Business and professional services trends shaping up for 2019

Business and professional services firms should pay close attention to these top ten impactful trends in 2019.

RSM CONTRIBUTORS


How can we help you?

To discuss how our team can help your business, contact us by phone 800.274.3978 or



Contact

Dan Whelan
National Practice Leader
410.246.9124