Customers want more interaction, competition is increasing and being more data-driven is becoming a top priority. The pressure on the service industry is constantly rising.
But are you ready for it?
Are you moving as fast as the market does?
Don’t miss the 2019 trends in professional services automation (PSA) market.
A little reminder of PSA’s definition.
Professional Services Automation software is too often considered as a stand-alone implementation, when in fact it integrates with the entire project life cycle (or quote-to-cash in this case), from CRM to ERP.
Thereby, a PSA software solution is a suite of applications that covers the 3 main phases of the customer life cycle and aims to improve efficiency, client satisfaction and tracking:
It’s about assigning the right people (according to skills and experience) to the right projects. And also using key metrics (like utilization rate and rate realization) while making those assignments, in order to maximize profitability when scheduling resources.
With a PSA angle, the focus is on the proactive management dashboards, as they give real-time info on what’s going on.
It allows you to see directly if you are missing something or if the margins are not as expected, so that you can put your project back on track before it’s too late and avoid bad surprises at the end of the project.
As you see, it is not only about than gantt charts, project plans and milestones.
Streamlining and automating the billing process will allow your customers to pay much faster and you’ll get a lower DSO.
Now let’s talk about the trends…
Real Time Collaboration
Things are changing in organizations as younger generations are joining the workforce in numbers. In 2017, 35% of the American labor force participants were millennials, making them the largest generation in the U.S. labor force.
They grew up in the social era and one of their main characteristics is their very collaborative mindset. They believe that they don’t need to know anything that someone else knows, knowledge is made to be shared. They just need the right team collaboration tools to reach out to other people in real time.
What does that concretely mean for PSA?
Investing in collaboration software is a lot more interesting for professional services organizations that have a big field component or remote workforce.
If a consultant runs into a problem while being on site, having the right tools can save him a lot of time (and credibility). He can just pick his phone and use his collaboration tools to reach out to a group or a specific expert in real time. No need to start calling people and trying to track down someone to solve the problem.
But that’s not all. We all know managers don’t like surprises. Hence, these collaborative tools are also very handy to keep your managers in the loop. A consultant on the road can easily empower his project manager with real-time status and performance indicators.
Let’s talk about emails.
They are not very convenient when it comes to sharing information with a bunch of people and discussing about it. Also, finding some information shared by email a while back can be quite difficult as it eventually disappears or gets lost.
Collaboration tools like Slack or Salesforce Chatter are bringing a way more efficient solution than sticky notes and emails going on forever. Slack channels or Chatter feeds offer an easy and fast way to share information, or ask for some. And overtime, those channels/feeds become repositories of information that are also open to a wider audience than emails.
Which means that, after a while, when you need information, you can just consult the relevant channel/feed where the info had been post before. Thereby, shared knowledge won’t disappear like it does with an email.
For the record, Slack is generally prefered to Chatter, even though less organized than Chatter for long term information stockage. That is because Slack offers true real time communication and notification, it works on any device and it is easy to use across the whole company (no need of a Salesforce licence).
Collaboration tools are great as they considerably diminish project risk. They enhance communication across departments, they allow to solve problems in real time and they are also a great way to save you and your colleagues some precious time. You can share the work you’ve done that could benefit any other member of your team (application extensions, integration code…).
Same way around, you can reach out to your team and ask them if they have any script, any code or whatever that could help you and save you some time when starting a new project.
It gets even more interesting when you bring collaboration tools to the next level.
It doesn’t have to be limited to your team, these tools can also be used to collaborate with customers, consultants, contractors and partners. When working on a project, you can include your clients in the channels related to milestones, timelines, reports etc. That will give them a real-time idea of the advancement of the project.
Integrating your CRM and Capacity Planning Tools
As we already said, it would be a mistake to consider PSA as a stand alone implementation. In reality, the real power and importance of PSA lies the automation of the whole customer life cycle and the integration of PSA to other parts of an organization, especially the CRM.
Studies show that organisations with PSA coupled to CRM perform way better than companies without PSA, in terms of revenues, margins and utilization.
Let’s say you identify a capacity issue in your organization, on average it can take up to 4 or 5 months to hire new resources, train them and make them productive. Thereby, when it comes to capacity planning, it’s not enough to have a stand alone PSA.
You need the ability to look into your sales pipeline, and look months in the future in order to be able to make strategic decisions around these staffing issues. Should you hire new staff, let some go, what clients should you prioritize?
Thus, integrating PSA to your CRM will provide you with the data you need to bring the right resources, at the right place, at the right time and with the right skillset. Moreover, PSA companies have be implementing machine learning to their solutions, which adds updated skills and availability to the equation.
Indeed, machine learning simplifies relations between organizations and sub-contractors such as consultants, allowing the latter to update their skills and apply directly for projects…and all that from their smartphone.
By integrating PSA to the CRM, you are also bringing your sales and services teams closer. That “union” will lead you to discover really interesting facts that ultimately should allow you to “deliver what you can sell, and sell what you can deliver”. Some of the facts you may look for are what takes of a project are being accepted by customers from what’s being quoted by your sales team.
You might discover that the sales team is not pushing the right bundles. They may just want to wrap up deals, without knowing what they can deliver, if they scope it right and price it right. Some other bundles may have higher customer satisfaction and margins, but if the sales team doesn’t have the right tools, they may not be positioning that project correctly, they may not even be offering it as an option.
Hence, getting that data on what’s being accepted and rejected is really important because you’ll get more insight on how sales operate. Then you can take advantage of that information and provide additional marketing material or some selling skills in order to help the sales team push the project that you want to deliver the most.
The evolution of this world also has a role to play here. We’re moving from an IT environment to a cloud environment. Hence it’s important to start getting insight on what’s coming, in order to be ready.
What skills will your Professional Services team need in a near future?
A good place to start looking at to figure that out are quoted project, that even if they are being accepted, will still require months to close the deal. That insight of the near future will enable you to do some capacity planning.
What resources and new skills are you going to need for that project when the deal is closed. Is there trending projects coming up that will require cross-training or new people?
Integrating PSA on the CRM side will allow you to understand better what’s going on with your current resources, but also what are the resources requirement for the future.
“Work doesn’t stop once you leave your desk”.
Most people working in services-driven organizations can relate to that sentence. Flexible schedules, being constantly on-the-go, increasing flexibility expectations from clients (and employers)… There are many reasons behind that need of efficiency outside the office. And smartphones, tablets enable people to do so, whenever and wherever they are.
It’s only logical that the mobility trend is now expanding to PSA.
That trend was first seen amongst the employees, as they want to maximize their time efficiency while being on the road. That way, when sitting on a train or waiting for a delayed plane, they could get some work done, filing expense reports or giving project updates for example.
Employees may also have to consult information such as online manuals or product details while on the move. And mobile PSA solutions will give them real-time mobile access to that corporate content and tools.
But lately, it’s mostly managers that have a growing interest for mobile PSA. Their responsibilities and the weight on their back encourage them to be active around the clock. And they want to run business with the same access, visibility and functionality on their mobile than on their office computer.
Also, an unexpected email during holidays or a visit to a customer, may require them to have mobile access to reports and dashboards in order to look for the information they need when they don’t have their computer at hand.
Finally, mobile PSA interfaces are proved to deliver a positive ROI such as an increase in productivity, better project deadlines and a financial impact. So when looking for a PSA solution, you should definitely consider one offering a mobile app.
Rejected invoices are a pain in the neck. They delay customer payments and end up increasing your Day Sales Outstanding (DSO). And lowering that DSO is a challenge for many organizations.
Fortunately, advances in PSA and its integration to ERP are allowing to better streamline customer billing. Through a dashboard, project managers and customers can review and approve the variables impacting the project. Thereby, project managers can automate the generation, approval and distribution of more accurate and transparent invoices, reducing customers’ possible questions and rejected invoices.
Talking about transparency, now it is also possible to integrate tasks and deliverables into team members’ calendars. Not only will it increase efficiency, but it will also allow you to provide real time financial data to customers about their currents projects, so that they can propose timely corrective actions, if necessary.
It’s an exciting time for the PSA market. PSA softwares are evolving into complete solutions and integrate most tools within the whole organization. They enhance real-time collaboration, offer a clear view of your resources and projects, allow more transparency and ultimately, they increase profitability.
In fact, PSA adoption by companies is on the rise every year since 2012, and the Professional Services Automation (PSA) software market is expected to grow at a Compound Annual Growth Rate of 11.87% from 2018 to 2024.
Have you taken the leap yet?