Professional Services Automation or PSA solutions yield several core benefits to service organizations, but most executives only need to look to the 3% increase in billable utilization as a primary reason to select PSA.
For project managers, business and finance leaders and end customers, finishing projects on time and on budget is always the end goal. As services businesses grow, however, projects become more competitive to win and complex to manage. Leaders often find that the entry-level applications and spreadsheets that helped them get where they are, no longer support efficient project delivery or strong revenue growth.
For many, investing in a professional services automation, or PSA, solution seems like the logical answer. Yet choosing the right system to manage projects and project finances can be complicated, especially if the business is using multiple applications to run project delivery.
When PSA and financial management solutions run on a unified cloud-based suite, businesses can set up project billing rules, track milestones and manage resources more efficiently while billing time and expenses accurately and promptly. As a result, project managers can actively take on more project work thanks to improved collaboration and resource utilization and simplified billing. The outcome: a more effective project management lifecycle.
Entry-level project planning tools can leave out critical components, like historical data from similar past projects. They often lack features to pinpoint the best resource for a given task, which can lead to wasted time, higher project costs and lower profits.
Good project planning with PSA can pave the way for on-time and on-budget delivery because it lowers the chance of scope creep, budget overruns and resource overutilization via more effective reporting and use of preconfigured templates that fit the specific requirements of the project.
PSAs also allow project managers to proactively forecast and react to change. For example, project task placeholders make it easy to set budgets. In contrast, firms with only simple project-tracking tools are often forced into reactive mode.
Establishing collaboration among internal teams is another barrier to successful projects. Without collaboration, work stagnates, tasks don’t get completed and time is wasted.
A PSA improves collaboration among project team stakeholders by ensuring data comes from a single source that all project managers, finance team members and other resources can access. Now, work processes, like time and expense approvals, are completed accurately and on time.
Tracking & Forecasting
Reporting and tracking are paramount to efficient project delivery. The advanced project-tracking and reporting capabilities PSAs provide can lead to better success rates and greater visibility throughout the project lifecycle.
When organizations use only spreadsheets to manage projects, they are limited to a few data points to record what is happening at a given time. Typically, a project manager looks only at what actually happened, neglecting the “what if” scenarios. Project managers with advanced management solutions, like a PSA, can look at all data points from planned or budgeted work, or time and expenses, and compare that data with the actual work completed. This in-depth reporting gives organizations greater visibility into how certain resources affect the project and helps staff work proactively instead of reactively.
Managing these fundamental project processes in a PSA solution creates two main benefits. First, with one data source, it’s easier to track tasks, reducing confusion and inaccuracy. Additionally, by automating workflows, teams are notified when work should be started or billed, which reduces delays.
Now, projects are always up to date.
Increase Utilization with Resource Planning
In project management, a “resource” is anything that is needed to complete a task or project. That list includes people, time, materials and expenditures. Because organizations don’t have unlimited assets, project managers need to deploy resources strategically and efficiently to optimize billable utilization and keep projects profitable.
From a project management standpoint, increasing utilization is one of the best ways to become more efficient and profitable. Automation simplifies processes and eliminates redundancies. Before a project reaches the execution stage, project managers can take an inventory of resources and look ahead at what they will need throughout the project lifecycle.
A PSA solution helps by providing better visibility into workloads and forecasting demand while evaluating archived project data to set the right budgets and expectations.
With the right PSA solution, services organizations can search expertise and match people to tasks through intuitive skills tracking and capacity reporting, so that human resources are more efficient and productive.
When resource planning is paired with robust reporting on metrics like allocated and assigned hours, it is easier to ensure that resources are not overbooked and projects are running as efficiently as possible.
Project Billing Strategies
For project managers, ensuring that finance teams have the needed information to bill clients for the work that is performed seems straightforward. But when more complex contracts are in place or when financials are disconnected from your project solution, choosing the right billing model and managing invoicing becomes a thornier task because every billing situation is not a one-size-fits-all.
A robust PSA solution can have a profound impact on the most common project-billing models in the services industry, including Fixed Price Billing. Project Milestone Billing, Time & Materials based Billing etc.
Importance of Financials & PSA Together
PSA drives profitability, and profitability helps organizations grow. When project financials from a PSA are incorporated into an ERP system, stakeholders gain a complete view of all their projects’—and the overall organization’s—financial health. All project costs, such as labor, cost of resources, billing rates, time and revenue, are easily captured and tied to a general ledger account.
Automating the exchange of this data allows teams to effectively monitor profitability so that organizations can adjust project schedules and resources as strategies shift. For example, when a change order is created on a project, it is easy to view how the variations affect the budgets, giving project teams better data to make adjustments that benefit the success of the project.
NetSuite PSA solutions make projects much easier to manage by keeping project and finance teams on the same page. Not only do they help align project activities with company financials, but they also ensure accurate accounting and billing throughout the project lifecycle. NetSuite PSA solutions also help deliver projects on time and within budget by providing collaboration tools and real-time visibility to increase resource utilization and profitability while reducing reliance on spreadsheets and the inherent revenue leakage created by data errors and disconnected financials.