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Originally published at Internet.comPromising to do for service managers what sales force automation and CRM did for sales and customer service managers, PSA helps organizations staff projects, match experts to the projects that can best use their skills, and create visibility into the nitty-gritty details of each project.
For the service professionals themselves, PSA shields them from bookkeeping burdens-expense tracking, invoice generation, and reporting-allowing them to focus instead on their areas of expertise. With dozens of PSA solutions in the market, though, how do you find one the one that will best serve your organization?
One: Realize that Cost Can Be Deceiving
Many service organizations make the mistake of basing much of the decision on the most simplistic criteria: price. Price can't be ignored, of course, but it's often higher on the list of evaluation criteria than it should be.
According to a study commissioned by PSA service provider OpenAir and completed by SPI Research, Evaluating a Professional Services Automation (PSA) Solution , the typical cost of total deployment, including hardware, software, and services, runs between $500 and $1,500 per seat.
The first-year costs may very well rule out certain solutions, especially for smaller organizations, but organizations of any size are better served by looking at ROI than initial costs alone. Similarly, low-cost solutions must still perform. Cost only has meaning when taken in together with performance and functionality. Cheaper offerings may skimp on functionality, but the more expensive ones may pose a different problem: function overload.
Software vendors are often guilty of layering superfluous functions on top of their core offerings, just so they have those checkmarks on their features list. Those checkmark functions may never be used - despite those very functions being part of what led to the selection of that particular offering.
A better selection process is to match functionality to needs. That may sound obvious, but many organizations don't really understand what their needs really are.
Two: Study Yourself First
According to Bob Vogel, chief marketing officer for Autotask, a PSA provider that targets IT service organizations, when Autotask meets with a potential client, the first thing they do is nail down the underlying processes that drive the business. "People are often running their businesses on an ad-hoc basis. There are no documented workflows. If you sell into a situation like that, all you'll do is automate bad processes."
Larry Goldberg, director of professional services for OpenAir, agrees: "You need to understand in great detail what your outputs are. A common mistake is to look at PSA software from a technical standpoint. 'Here are these modules, how do we use them?' That's the wrong approach. What you should figure out first is what exactly you want to achieve."
Since many PSA clients are SMBs, companies like OpenAir and Autotask often have to help their clients document processes and internalize best-practices before discussing the nitty-gritty details of the PSA solution itself.
Three: Check for Vertical Solutions
After the organization understands its workflows and goals, it should next see if any PSA offering matches their business focus. Autotask, for instance, specifically targets IT service providers. "Vertical solutions will have additional features and functions that will be applicable to that specific vertical," Vogel said. Similarly, vertical solutions often remove superfluous features that could be distracting.
Beyond the vertical plays, what are the key features any PSA solution should have? All should help you manage personnel and resources, staffing projects with those most suited to them. All should provide project management features, including the ability to divide large projects into tasks and phases in order to come up with better staffing and billing projections. Time and expense tracking are important, as are invoicing, revenue recognition, and reporting features.
Finally, these are professional automation solutions, after all, so the level of automation is critical. At the very least, PSA solutions worth considering should automate previously cumbersome, time-consuming and error-prone tasks.
Four: Scrutinize Intra-Application Integration
But will all of those features work well together? Most people think of integration in terms of how well one system integrates with others, but that's not the point here. The fact is that too many PSA solutions integrate poorly internally.
"Depending on how software was built and architected, you could find yourself jumping around from module to module and having to re-input data in each," Vogel said. Poor integration, in other words, can undermine automation, and wasn't that supposed to be the point in the first place?
Five: Plan for Change
Ask whether the PSA software can adapt as your business changes. A case in point is OpenAir customer DCC Services. Two years ago, the company was a fairly standard consulting organization, and much of their consulting focused on Oracle. They soon realized that there was a market opportunity for someone who could provide services tailored to the Oracle user base, rather than an array of me-too technology services. The sheer breadth of Oracle products and functionality made it difficult for end users to keep up, especially in small-to-mid-sized organizations.
As DCC changed their business model, taking on projects as simple as creating a report to much larger application consulting projects and anything in between, they had the unfortunate realization their PSA solution no longer matched their business needs. DCC was using a PSA solution that was too rigid in how it handled project variables. For instance, for billing it allowed for either fixed rate per-project billing or hourly billing, and that was it.
DCC needed something with more fine-grained functionality, something that could account for its array of task-based offerings. "We may have 100 different billing rates, depending on variables such as when a client signed the contract, the complexity of the task, or the client's service volume," said Ronn Breaux, DCC Services' COO and VP of Professional Services.
Many service organizations don't want to and shouldn't consider that many variables, but DCC Services absolutely had to. Considerations like these eventually led them to OpenAir, which offers a wider array of billing and project staffing rules. The switch also helped with the invoicing and revenue recognition phases of the projects, since the finer-grained billing rules translated into more accurate and detailed invoices.
Breaux pointed out that something as basic as expenses could throw off invoice accuracy in a business like his. With so many project variables, allowable expenses could change drastically from project to project. In contrast, other service organizations often have a standard set of allowable expenses that never change.
"Before, consultants decided for themselves whether or not expenses were billable. Now, expense rules show up in the PSA system. Only expenses that are billable make it onto the invoice," Breaux said, adding that this has the added benefit of speeding revenue recognition, since invoices are accurate, detailed, and rarely challenged by their customers.
Author: Jeff Vance
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