PSAs and their place in the SME toolset

We explore what professional services automation (PSA) software does and where it can help. We look at how PSAs and ERPs intersect and consider how they fit into the technology ecosystem of small and medium sized businesses.

What is professional services automation?

Professional services automation (PSA) software is business software developed specifically to support organisations which deliver billable projects or managed services to their clients. More specifically, it is software designed to make core business processes more efficient and people more productive — specifically for businesses whose saleable product is people and their time.

How do I know if a PSA is relevant to my business?

There are two key questions to ask:

1. Is there a relationship between the time your people spend and the value you can invoice?
2. If you are selling something for a fixed price, does time spent to deliver that something play a significant role in determining your overall profitability?

If you have any services aspect to your business the answer to at least one of these questions is almost certainly yes.

What do PSAs offer?

Professional services automation software typically provides facilities across eight core areas:

• Sales Opportunity Management: Track and manage sales opportunities, their status, and the time and cost committed to them.
• Resourcing: Manage the allocation of your workforce to projects and tasks based on skills.
• Project Delivery: Tools supporting estimation, costing, and status tracking.
• Project Accounting: Financial tracking at the project level overlaying forecast and actual time and costs.
• Time and Expenses: Track time spent across projects and non-labour costs incurred.
• Finance and Billing: Consolidated views of sales, revenue and cost across portfolios of projects.
• Forecasting: Overlaying forecast sales, revenue, resources and costs to actuals for longer-term planning.
• Integrations: How well the software connects with your wider technology ecosystem.

What is the ultimate goal of professional services automation?

PSAs are about increasing profitability. By improving process efficiency and employee productivity you do more, more quickly and with less effort. Through connecting people and processes through a central tool or set of tools you consolidate data about what you’ve done and what you forecast to do — enabling better reporting, faster issue identification, and ongoing improvements.

What’s the difference between an ERP and a PSA?

ERPs are designed for businesses delivering products, managing financials, supply chain, operations, manufacturing, and HR. PSAs focus on the process of delivering projects and services, bringing control and consistency to operational processes.

PSAs don’t concern themselves with defining exactly how any given project or service is delivered — they help bring control and consistency to the process of delivering them.

Pick the best tools for each job. Build incrementally.

Either a PSA and/or ERP could be the right choice for your business. The key question is whether you really need one or two highly feature-rich tools, or whether you’d benefit from a more decoupled toolset — best-in-class tools for each individual job, connected through integration. This allows you to digitalise different parts of your business step by step, avoiding the challenge of changing everything at once.