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Professional services automation (PSA) platforms have continued to mature and expand since these tools were first introduced more than fifteen years ago. As noted by TSIA’s John Ragsdale in a previous post, the adoption of PSA applications continues to grow at a rapid pace, including expanding the definition of what PSA tools can deliver for services organizations. Existing PSA solutions built a decade ago don’t deliver the breadth of functionality required to effectively manage a services business today. As a result, services organizations have been forced to turn to non-integrated and disparate systems to manage day-to-day activities, including project management, collaboration, and resource planning, among others.

Many customers are now looking to replace these original products with the more robust and integrated solutions now available on the market, offering enhanced features and functionality available in one unified platform to manage the entire services business.

Here are ten key requirements to consider when selecting a professional services automation platform that will work best for your needs.

1. Project Management

Historically, PSA applications didn’t focus on delivering and managing the day-to-day project management activities and left the responsibility to third-party solutions, such as Microsoft Project or other online project management tools used by the Services team. The challenge with this approach is that it created a disconnect with PSA applications not having real-time visibility into the status of projects, often resulting in data integrity issues when manually updating project status and balances in the PSA application.

Today’s PSA applications offer robust project management functionality delivered as a core component of the overall solution, tightly integrated with the rest of the application. They offer one integrated solution and provide real-time visibility and project collaboration for all stakeholders–from Services and Sales to partners and customers.

2. Platform Integrations

The integration of PSA applications with the larger business has never been more important than it is today. Services teams are connecting and collaborating like never before with Sales, Finance, partners, and customers to ensure the successful delivery of projects.

Embedding PSA into a CRM solution such as Salesforce puts your Sales and Services teams side by side and on the same page. Projects can be automatically created from sales opportunities even before the opportunity has been won for pipeline forecasting. Sales and Services teams can work together on proposals and contracts, and Sales can have real-time visibility into the status of projects for key accounts. Traditional PSA applications not tightly integrated with CRM software routinely faced issues of siloed Sales and Implementation teams leading to customer dissatisfaction.

Financials integration is another key integration for PSA applications. Services data needs to be seamlessly integrated to your accounting system for accurate billing, invoicing, and revenue recognition. Today’s PSA applications offer robust and real-time integration into many popular accounting packages your business uses today, fully supported by the vendor. Building and maintaining custom integrations to accounting packages is fraught with potential integration headaches, with the vendor often not supporting this custom work.

3. Services CPQ (Configure, Price, Quote)

For many businesses, integrating proposals, quoting, and contracts is a critical requirement to managing the Services organization, especially when integrated with CRM as part of a larger sales opportunity.

Today’s service contracts can consist of many different and complex components, which are often the result of change requests or expansions of work resulting in the need to track multiple billing methods and even revenue recognition policies within one project engagement. An example of this would be a project that initially was time and materials, but with a revenue recognition policy based on project percentage complete. A change order is approved for this project to include a fixed fee component, with revenue recognized upon completion of this fixed service. Can the PSA solution handle this scenario to properly account for project profitability, margin on each component, and properly account for bookings and revenue? Can the PSA account for margins and billings for contracts that consist of multiple projects?

For these reasons, the integration of CPQ with PSA is critical to maintaining the accurate management, billing, and revenue recognition associated with client projects.

4. Resource Planning

Resource planning has transitioned to a more advanced discipline than a decade ago, with newer PSA applications evolving to support these changing needs. No longer simply focused on who is over or under-scheduled, today's PSA applications can deliver on sophisticated requirements including planning based on target utilization, availability backlog, as well as task level planning in addition to project level planning offering a more detailed and accurate depiction of a resources availability.

Features including searching and comparing qualified resources by skills, role, location, and rates with an intuitive and visual appealing comparison tool are table stakes for today’s robust PSA solutions. Some PSA applications are able to source external candidates in addition to internal resources with a built-in staffing and applicant tracking solution.

5. Utilization

While tracking resource utilization may seem like a straightforward concept, it’s only recently that PSA applications could support the details of calculating utilization to the extent necessary for many service organizations. Features including target utilization thresholds, determining what types of time-off should or should not impact utilization calculations, or reporting on utilization by project, practice, region, and roles are common requirements that must be considered in evaluating any PSA solution.

PSA solutions today include an integrated time off solution to accurately manage and account for time off with scheduling and utilization.

6. Project Billing

The delivery and billing of services has become more sophisticated and complex with the introduction of new and expanded delivery strategies including retainers, managed services, microservices, and many more beyond the traditional time and materials or fixed price engagements of the past. Additionally, services organizations are increasingly working with third-party vendors and consultants as part of the Delivery team.

The ability to support these complex billing scenarios and vendor payments is another key component of today's PSA applications.

7. Project Accounting

Leaving project financials to the accounting system poses significant risks to the performance of any service organization. Not having critical project financial data including bookings, billings, and revenue to report on project profitability leads to lack of real-time visibility for decision making, missed adjustments, and at worse reduced margins.

Today’s PSA solutions offer full support for project financials, billing, and revenue recognition in one unified solution, tightly integrated with your accounting solution.

8. Extensibility

Earlier PSA applications didn’t offer the flexibility required to manage the uniqueness of Services teams and projects. PSA applications today offer robust platforms to support the flexibility and uniqueness required by Services businesses working in various industries and verticals, tailoring the solution to their needs. No longer held back by system limitations, today’s solutions offer extensibility features including the ability to create new custom fields, build workflow notifications and approval processes on-demand, easily create user defined reports and dashboards, and even create custom applications as required, all working seamlessly on both desktop and mobile devices.

9. Collaboration

Today's Service professionals are using collaboration tools as an integral part of managing the delivery of client projects. By increasing collaboration, services organizations can dismantle the boundaries between teams and increase customer success. Popular tools including Salesforce Communities, Slack, and JIRA are staples for many organizations to collaborate on project activities.

Robust PSA applications available on the market today offer seamless integration with these productivity applications, offering users an integrated and seamless environment for project collaboration, ensuring all stakeholders have visibility of critical project data so issues can be resolved more quickly, keeping everyone on track.

10. Built for All Users

Legacy PSA solutions were designed primarily with top-down planning and management in mind, with the majority of actual services work being done outside the system. Features and functions for comprehensive project and task management, team collaboration, and project reporting were completely ignored or an afterthought resulting in poor adoption and lost margin.

The takeaway message is, you should look for PSA applications that deliver an intuitive experience for all stakeholders across all devices to ensure widespread adoption and collaboration, resulting in increased project profitability and customer success.

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David VanHeukelom

About Author David VanHeukelom

David VanHeukelom is the founder and CEO of Krow Software Krow provides of an intuitive and modern solution for professional services automaton built 100% native on the leading cloud platform from Salesforce, delivering the easiest way to manage services with one unified platform.

David was the also the founder and CEO of Vana Workforce, a leading provider of HR Software that was acquired in 2013. Previously David served in executive level positions in product management, marketing, sales, and consulting at leading enterprise software companies Infor, PeopleSoft, Oracle, Actuate, and IBM Cognos. David was named Entrepreneur of the Year from the Angel One Investor Network.