Large companies wouldn’t be able to function without enterprise resource planning (ERP) software to automate the thousands of routine business tasks that arise in a given workday. However, the features, complexity, and cost of ERP systems make them unsuitable for most professional services and other smaller firms.
That doesn’t mean service-oriented businesses are stuck using outdated manual processes to keep their operations running. Professional services management software is designed to meet the needs of these organizations by supporting and integrating resource and employee management, time and expense tracking, and other core processes of service companies. Also called professional services automation (PSA) software, the systems help small and midsize service companies take advantage of the latest technologies without requiring any large up-front payments.
Useful Features of Professional Services Management Software
Automating business processes such as resource management, timesheet management, and accounting allows service companies to focus on meeting the needs of customers and strengthening their relationships with customers and partners. Software Advice explains that professional services management software benefits many businesses that offer accounting, consulting, engineering, construction, marketing, and computer services.
The capabilities of professional services management software match the range of activities involved in running a service business:
- Procurement and maintenance: The systems ensure that supplies and equipment are readily available, in compliance with regulations, and protected against loss. They automate the management of vendors, commodities, and contracts. The software also tracks and logs inventory, generates purchase orders, and sends alerts when supply levels reach preset thresholds.
- Customer and account management: Service companies can track past transactions and compile other customer information that lets them personalize their marketing programs, generate leads, and analyze buying trends. Other features allow firms to offer automatic discounts and credits.
- Time and expense tracking: The software lets companies specify the times that staff members will be available, record the various roles of employees in a given workday, and offer web-based timesheets for ready access from mobile devices and remote locations. The systems also support multilevel access for employees and labor cost reporting.
- Resource management: Tap the capabilities of workers by creating databases of their skills that can be used to match employees’ qualifications with the business’s projects, tasks, and processes. Generate reports on labor costs and staff utilization, track services by staff member, and assign multiple roles to each employee.
How Businesses Benefit from Professional Services Management Software
By automating many business processes, professional services management software delivers a competitive advantage. A survey by Aberdeen Group found that service companies rated as “best in class” were 80 percent more likely to use professional services automation software than all firms, as Technology Advice reports.
These are among the areas that can be improved by automating services management:
- Responding to market changes: The systems help companies identify new markets to target for expansion and accurately gauge demand for their services. The functions and features expand as the operation grows, and the reports the software generates make revenue forecasting more accurate.
- Managing teams and projects: By facilitating communication between team members and clients, the systems ensure that contracted services are delivered on time and to specification.
- Scheduling and managing tasks: The systems sync time and expense data with customer records to link accounting, payroll, and marketing functions.
By serving as complete business management suites, professional services management software combines document management, reporting, expense tracking, and budgeting and forecasting in a single dashboard interface. This makes critical business information easy to access, customizable, and scalable to meet the specific management needs of each company.
Software Advice lists the key benefits of integrated management systems for professional service firms:
- Decision-making is improved through the use of real-time analytics and reporting that is based on up-to-date operational and financial data.
- Automated data entry lowers administration costs and reduces errors by eliminating manual processes. The systems also facilitate data sharing between departments and operations.
- Easy information sharing across departments to coordinate sales, customer support, and billing functions.
- More accurate revenue and profit tracking gives companies a complete view of their financial status, including information on sales commissions, taxes, and operating expenses.
These are among the key performance indicators (KPI) for professional services management software:
- Percentage of on-time project deliveries
- Percentage of on-budget projects
- Utilization of employee billable hours
- Revenue leakage
- Time required to generate invoices
- Days sales outstanding
A Rosy Outlook for Professional Services Management Software
Market research firm Grandview Research reports that the market for professional services automation software will experience a compound annual growth rate (CAGR) of 11.7 percent through 2025. The total market value that year will reach $16 billion, according to the study. The report identifies several factors that are driving the market growth:
- The need for professionals services to make their operations more efficient by aligning resources with areas of greatest potential profitability.
- The ability to integrate knowledge management with business processes via enhanced collaboration, employee utilization, and strategic planning.
- The shortcomings of the spreadsheets that many service companies and other small businesses currently rely on to manage tasks and resources.
- The growing popularity of cloud services as cost-effective solutions for enhanced resource and employee management via mobile platforms.
Grandview Research’s survey found that technology companies accounted for 46 percent of the total market for professional services management software in 2018. However, marketing and communication services will experience the fastest increase in the use of the systems: the study forecasts a CAGR of 15.5 percent from 2019 through 2025 for this market sector.
In the future, professional services will depend increasingly on mobility and virtual technologies to take advantage of the cost savings and efficiency that cloud and other innovations make possible. By adopting cloud-based management suites that integrate reporting, accounting, analytics, resource management, and employee management, service firms are able to realize a competitive edge while also being positioned to adopt new business-process technologies and techniques quickly and affordably.
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