How to overcome the six challenges for professional services organizations
Posted by Henk Jan Onstwedder
Every part of your business can be better managed, but there are a six major challenges — here’s how to overcome them all with a single system.
Every component of a professional services organization (PSO) can be better managed by modern business applications, from clients and people to projects and finance. Every barrier to engagement, productivity and growth can be smashed.
And, if you’re on a business transformation track, any new entity can be integrated into its business model with minimal disruption. But, to do this every people-centered, project-driven PSO first needs to look at how its people collect, analyze and manage data.
1. Mastering growth
While growing, your organization needs to to scale, restructure and integrate new entities with as little disruption as possible. When you expand sales, add service lines and change the way you deliver services, your business system should be capable of adapting to the changes.
Each time your organization enters new markets, follows its clients into new geographies or partners with other organizations, your business application should be able to flex and scale.
To meet this challenge your enterprise resource planning (ERP) solution should support you. It should keep projects, orders and resources in sync while keeping your processes running smoothly and providing relevant and complete information dissemination.
How well does your business system currently support your growth?
2. Killing tedious manual tasks
According to global industry analysis by DJS Research, office workers lose one third of their time to admin. So, this second challenge is about finding ways to improve the productivity of your people.
To overcome this challenge and improve operational excellence, the industry leaders introduce standardized and structured procedures. This allows their teams to spend less time on routine, administrative work and more time on managing exceptions. And everyone receives data on KPIs relevant to their role within a few clicks.
3. Winning more business
This challenge is all about knowing where to compete and learning how to break down silos while identifying the right data to help your organization bid for future projects.
The percentage of referenceable clients is 18 percent higher in PSOs which use customer relationship management (CRM) systems, according to the latest report from independent analyst, Service Performance Insight: 2019 Professional Services Maturity Benchmark (PSMB 2019).
But using standalone CRM software is only half the battle. A single, organization-wide ERP solution with a fully integrated CRM, on the other hand, will help your organization automate opportunities, predict costs on prospective projects and align sales and service teams.
Several firms in PSMB 2019 credit the tight integration between their CRM and professional services automation (PSA) applications as a catalyst in building collaboration between sales and service delivery.
4. Executing profitable projects
This challenge focuses on gaining visibility over project metrics to improve your chances of hitting targets on every project.
PSMB 2019 claims the top-performing PSOs “rely on” a PSA solution to hit revenue and margin targets and execute profitable projects. It’s all thanks to 360-degree visibility and control over their project plan, schedule, cost and budget.
According to PSMB 2019, the average revenue per project is 91 percent higher in the best-performing professional services organizations which rely on a PSA. These businesses are able to execute more projects concurrently, with faster project staffing times, longer projects durations and higher average price per project; as well as delivering more projects on-time.
5. Solving the talent puzzle
This challenge is about optimizing billable resource utilization and retaining your best talent. The right PSA application helps PSOs match the right consultants with the right skills and seniority to the right projects automatically.
Consultants can update their costs, availability and requests remotely (the data is recorded automatically via integrated apps). This data is synchronized with the project backlog, all within the same system.
Everything can be tracked, updated and analyzed in real-time. The results are self-driving resource projects, greater collaboration, better communication and more flexibility.
6. Billing with precision
This challenge focuses on how to collect, bill and report financial transactions more efficiently.
The solution lies in the automated collection of data and issuing of invoices. Capturing actuals as they occur and ensuring contract details make it to the invoicing software streamlines the collections and payment process, reduces errors, invoice disputes and the amount of days sales outstanding to immediately improve cashflow.
With a project and billings system integrated within a single system of record you can also track costs, revenues and profitability.
Six challenges, one solution
To accelerate its growth and digital transformation, your organization may also need to challenge its own status quo — easier said than done — to make the leap towards a modern ERP platform.
This new type of business application is powered by emerging technologies, it enables automation and comes with built-in best practices for people-centered and project-based sectors like accountancy, consultancy, engineering and IT services.
To learn more about the six challenges for PSOs and how to overcome them, download the e-guide: Transformation time for professional services organization — how to manage clients, people, projects and finance with a single system.
2019 Professional Services Maturity Benchmark (free download)