Professional Services Automation (or "PSA") software enables professional services firms to drive consistently strong business performance. In this post, we will take a look at the main features of a PSA platform and how those features help companies drive success. Before we jump into that discussion, let's take a step back and define what we mean by a "professional services company".

What are professional services companies?

Professional services companies provide in-demand, high-skill services to clients. There are countless types of professional services firms across the globe, with areas of focus ranging from software engineering, marketing, legal, accounting, and so on. Professional services firms in the United States generate an estimated $2 trillion in revenue annually and account for roughly 10 million jobs.

A defining characteristic of professional services firms is customization - the work they deliver is often tailor-made for each client's specific business needs. Professional services companies hire and train highly-skilled employees who then utilize their expertise to provide customized services and deliverables to clients. It is this ability to deliver high-value services that creates, and sustains, the economic opportunity for professional services firms.

Clients typically engage a professional services company because they lack the expertise or capacity to deliver a service internally within a desired timeframe. When a company hires a software engineering firm, for example, it’s usually because the company doesn’t have the internal bandwidth or expertise to deliver on near-term software projects. When customers need high-quality services in a timely manner, the professional services firm comes to the rescue.

What exactly does Professional Services Automation software do?

PSA software manages the key operational functions that enable the professional services firm to generate revenue and maximize profitability. These operational functions include, but are not limited to:

• Time management - Professional services firms often charge by the hour and thus need to capture work by project team member, role, and task.
• Expense management - Employees need to create expense reports and charge appropriate expenses back to clients.
• Project accounting - Firms need to deliver projects in a variety of billing methods including time and materials, fixed fee, and fixed monthly.
• Project budgeting - Firms need the ability to create top-down or bottoms-up budgets for hours and services revenue as well as budgets for expenses and other items (such as products).
• Project management - Project managers need the flexibility to structure a project by breaking out roles, team members, phases, tasks, and milestones.
• Resource management - Resourcing personnel need to carefully allocate the backlog of work to delivery team members in order to maximize billable utilization while maintaining service quality standards. Additionally, recruiting personnel must ensure the recruiting pipeline is filled with in-demand skills.
• Utilization management - Practice and company management need to monitor and predict billable utilization. Utilization has a tight correlation to revenue generation.
• Forecasting - Senior leadership needs to evaluate the revenue backlog and sales pipeline in order to effectively forecast the future billable hours, utilization, revenue, and profit.
• Invoicing and payments - The accounting team needs to generate invoices, send them to clients, and record payment.
• Performance analysis - Personnel ranging from project managers to executives need to be monitoring a variety of metrics on a per-project basis and across the portfolio of engagements. These metrics include revenue, gross margin, profit, effective bill rate, realization rate, utilization rate, and the like.
• Reporting and analytics - Essentially all of the operational functions listed above need useful reports and analytics in order to be properly managed by firm personnel.
• Integrations - A PSA platform doesn't live on an island. It needs to integrate with other mission-critical business applications including CRM, accounting, HRIS, expense, and collaboration platforms.

How does PSA software differ from "time tracking" software?

Time tracking software can be thought of as the "little brother" of PSA software. Time tracking software is often less expensive but also far less capable than PSA software. Just about any business that tracks time can use a basic time tracking application to capture that time and bill customers. But, those basic applications rarely include the sophistication that a growing professional services firm needs to maximize business performance.

What are the important considerations when purchasing PSA software?

When purchasing any type of software, it is important to engage in a detailed cost-benefit analysis. With PSA software, the following are usually key drivers in the selection process:

• Platform capabilities - Does the platform meet the business needs? An SMB platform won't be ideal for an enterprise firm and an enterprise platform won't be ideal for an SMB firm.
• Platform integrations - Does the platform integrate with the other primary software products in use?
• Ease of use - Will the team easily adopt and enjoy using the system? Is it overly complex and convoluted? Will it waste time and billable throughput?
• Subscription cost - How much does the software cost on a regular basis? Do all users incur a fee or just certain types of users (ie - billable personnel)?
• Onboarding effort and cost - Will the onboarding effort take 2-4 weeks or will it take 2-4 months? Also, what will it cost?
• Pricing policy - If 20% of the workforce leaves tomorrow, are you stuck paying for seats that you aren't using?
• Customer support - How well does the vendor support its customers after onboarding? Are there multiple forms of support ranging from chat, video conference, and email? How do other customers rate the quality of customer support in reviews?
• Ratings - How does the product and vendor rate on B2B software review sites such as G2 Crowd? Click here to see the Professional Services Automation category on G2 Crowd.

How does Ruddr earn the trust of customers in such a competitive market?

Ruddr wins by providing a comprehensive feature set, an unmatched user experience, and highly-competitive pricing. On top of that, we are simply obsessed with customer satisfaction. Sound interesting? Check us out and enjoy a 30-day free trial.