To maximize revenue, companies must extract the greatest value possible from their resources. Two industries recognized for meticulous revenue management practices are airlines and hotels.  Both devote entire divisions to the discipline, relying on complex systems to track inventory and demand. Can that kind of discipline be used in Technology Services organizations, where the “product” is people’s time rather than airline seats or hotel rooms? We firmly believe the answer is yes.

In the following pages, we will:

  • Explore how the technology industry’s move to the Cloud is making labor resource management more important than ever,
  • Outline how a Professional Services Automation (PSA) system can help maximize the value of this critical resource, and
  • Offer seven steps a Services organization should take to ensure its PSA system implementation delivers the desired results and the greatest value.


The Evolving Nature of Services

Historically in technology firms, Professional Services has been responsible for initial implementation, completing a large multi-year initiative to configure the product to meet the client’s project requirements and bring the product live. In this environment, Professional Services has often been viewed as a necessity for facilitating license sales but not a for-profit sport in its own right. Consequently, technology firms didn’t put much thought into managing these projects in the most effective, revenue-maximizing way.

However, the world is changing. Thanks to the advent of the Cloud and subscription pricing, technology firms must continually prove their worth to customers by adding value throughout the customer lifecycle, not just at initial implementation. They must offer a wider range of services that contribute to the success of their customers, whether they are large or small, with a custom or out-of-the-box product, delivered via the Cloud or on premise.

Instead of completing one large multi-year implementation, Professional Services must now manage an on-going stream of smaller and increasingly diverse customer projects, each with different skill and geographical requirements. Efficiently acquiring and managing in-house and subcontractor staff can be very challenging in this project-driven environment, where needs change quickly, project ramp-up and wind-down times increase, and there is significant downtime risk and cost. To survive, Professional Services resources—and the great headcount expense that comes with them—must be actively managed in order to maximize revenues and compete profitably.


PSA Systems to the Rescue

Professional Services Automation (PSA) systems help manage a service organization’s key input resource and its largest cost—people. They can help a leader understand what resources are available to them, what those resources have been doing, what they will be doing, and what they could be doing more efficiently or profitably.

Such systems can be thought of as an enterprise resource planning (ERP) system for Services. If this conjures bad memories of the ERP systems of old that were massive, complex, expensive, and took years to implement, rest easy: PSA systems are almost certainly much easier to implement and more cost effective than a traditional ERP.

PSA applications come in a variety of shapes and sizes. Systems like Netsuite OpenAir and Financial Force can manage tens of thousands of Services personnel at once and can integrate with other enterprise applications and ERP systems. At the smaller end of the scale, PSA systems like Projector can help small- and medium-sized businesses streamline and automate processes and provide new insights into workforce productivity and profitability.

In all cases, a well-implemented PSA system should function as the backbone of the Services organization: It should help it fully understand what happened in the past, gain better insight into what is happening today, and best plan for what is anticipated to happen in the future.


PSA Systems Benefits Checklist

The checklist below outlines the key benefits that a PSA system should deliver. As a Services leader assesses system performance, if any of the benefits below aren’t being realized, then it is a clear indication that the PSA system implementation is not doing all that it could—and should.

  • Increased Resource Efficiency: Identifies under-utilized resources that can be leveraged on existing and anticipated projects
  • Optimized Resource Deployment: Provides a global view of resource needs, resource availability, current project deployment, and the pipeline of expected work that can be factored into the deployment of resources across new projects and work queues
  • Enhanced Skills Capacity Forward Planning: Assesses existing skills base against anticipated skills needs for existing projects and pipeline
  • True Insight into Individual Project Performance: Gauges project profitability, allows for directing project progress through the lifecycle (e.g., requesting additional resources for behind-schedule projects)
  • Enhanced Performance Tracking: Gives team supervisors, project managers, and senior leadership the ability to track performance in near-real time by individual, team, office, role, etc.
  • Streamlined Project Administration, Including:
    • Reduced project-lifecycle time burden on the individual and the central support teams through automation and better self-service tools
    • Quicker new project start-up through provision of a central tool containing key project information, project ownership, staffing needs and allocations, project documentation, etc.
    • Increased accuracy in data collection and associated downstream systems and reports through increased transparency in time recording and compliance
    • Increased automation of billing calculation and invoicing processes through automated feeds

Successfully Deriving PSA System Benefits

While PSA systems can deliver real, tangible benefits to a Services organization, Waterstone Management Group’s experience in this field shows that these systems often don’t provide the level of insight that was originally expected. Many firms use it merely as a timesheet tracker to facilitate billing and to derive high-level workforce statistics such as utilization.

A PSA system implementation may look perfectly successful on paper, but still miss the mark on delivering the anticipated benefits. The gap between the two can often be attributed to a successful technical implementation, but a less than stellar organizational implementation. To achieve full value from a PSA system, companies must focus on both the technical and the organizational implementation.

The good news for those seeking to get more out of their PSA system is that organizational implementation improvement is achievable—even if it takes place some time after the technical implementation itself.

Below are seven key steps to aid the organizational implementation of a PSA system:

  1. Understand the Investment Case: One Waterstone client with a $100M+ Professional Services business needed only a 0.8% increase in utilization for the PSA system license and technical implementation to pay for itself, all else being held constant. This can provide a powerful incentive to implement a PSA system, but also should serve as a clear target that must be reached in order to pay back the investment required.
  2. Set out the Overall Strategic Goals and Realistic Expectations for the PSA System: Identify upfront which are the priority benefits, and take a phased approach to implementation that acknowledges that not all benefits will be realized at once, nor will they be realized by the conclusion of Phase 1. Many will require process changes before the benefits can be reaped.
  3. Get Buy-in from All Levels of the Organization: From senior leaders eyeing improved profitability and resource managers who want to make more informed resource decisions to project managers seeking improved project performance and the resources themselves who want greater ease in managing their time and monitoring their performance, everyone needs to know how they stand to benefit. Buy-in should happen ahead of time in the road-show phase. It is vital that promises made to these groups are kept: Keep track of questions and requests from the very first design session, circulate implementation milestones and progress, share initial data cuts and reports, and seek and act on feedback.
  4. Create an Implementation Plan that Reflects a Measured, Persistent Approach: The phrase “don’t run before you can walk” describes the preferred approach perfectly: Tackle priority topic areas one by one, getting each individual element right before moving on to the next. Since so much of the data in a PSA system is interlinked, the step-by-step approach is especially important.
  5. Use the Opportunity to Improve and Standardize Processes: Because of the ad-hoc way in which many Services organizations have grown up, they often live with process differences across business units and regions. Rethink processes, roles, and structures to align them broadly across the organization. Not only does this make the technical implementation and configuration process go more smoothly, it also gives the Services organization an opportunity to become more service-oriented. The benefits are numerous: quicker response to Sales requests, faster project ramp ups, and increased transparency and accuracy in billing to name a few.
  6. Encourage Compliance by Leveraging PSA System Reporting: In many organizations, PSA systems offer a depth and timeliness of reporting that far exceeds anything that was previously available. As PSA systems inevitably require organizational process changes, the workforce often perceives this as an additional administrative burden (at least initially, until the systems become familiar). As a result, it is very common to see a lack of compliance and a low standard of data quality. Instead of trying to force compliance, publish and share the data as it stands – acknowledging that it may be only directionally correct. If a list of late timesheet offenders is published each week, very quickly resources will learn to accept and take part in the new process. If a list of project profitability statistics is circulated to management, they will very quickly be asking their project managers why certain projects are apparently not meeting expectations. This approach should be taken in lock-step with the implementation plan: Get one step right at a time, rather than force an entire new suite of reporting on an organization at once.
  7. Track Goals and Benefits: It is vital to keep track of the implementation in terms of the outlined investment case and strategic goals. At each steering committee meeting ask, “How do we get further along towards our original goals?” Key measures that support these goals should be periodically taken and tracked to ensure the benefits are truly being delivered.

While each firm will have its own areas of focus, these steps can serve as a reference point for developing an organizational implementation plan designed to deliver the desired results.


Seize the Opportunity

PSA systems can be incredibly useful in managing Services organizations—helping them not just survive, but thrive by maximizing the value of their greatest resource—their people. There is a real opportunity for firms without a PSA system to invest in one and for firms with a PSA system to ensure they are deriving as much value from those systems as they can.

Whether starting from scratch or seeking to get more out of an existing system, organizations must focus on the organizational implementation as well as a technical one. This organizational-focused view will help derive the original benefits sought and can provide a real competitive advantage against other less developed Services organizations.

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About the Author
Andrew Clark

Andrew Clark is a former Principal at Waterstone. During his time at Waterstone, Andrew advised clients on key strategic issues, including growth planning, new market entry, go-to-market strategy, and operations performance improvement. Andrew worked in a range of industries, with a focus on financial services technology, telecoms, and business services.