Projects in the professional services industry are often lengthy and multifaceted. They need differing skill sets, various milestones, targeted goals, locations they are operating in, and a very complex billing system.
If they can’t manage all these, any professional services firm can find itself struggling to keep its profitability.
Until today, most services firms have tried to handle their projects using various software tools—billing and accounting, project management, HR, CRM—none of which could easily share information with the others. They were quite disconnected.
Their project managers needed to switch between multiple applications and spreadsheets.
This usually resulted in plenty of wasted time that were spent re-entering data from one application to another, lost opportunities, unpaid work in progress, and plenty of underused resources.
IT Challenges of Software Companies
This is not just an isolated issue. The entire professional services industry is plagued with this the problems brought about by disconnected and disparate solutions, explained Forrester Research Vice President and Principal Analyst George Lawrie.
He listed a number of business issues that result from having separate enterprise applications and project management systems:
- More manual administration
- Lack of a single view of project data
- Inaccurate, outdated or duplicated data
- Inability to adjust resources and capacity to market conditions
- Risk of non-compliance in revenue recognition
John Hossack, a senior partner at US-based consulting company Cardinal Path, recounted his struggle to standardize the disparate applications used by Cardinal Path's project managers.
Basically, the company had been formed by the merger of three smaller firms, resulting in a large collection of accounting, CRM, ERP and project management programs, including Autotask, Basecamp, Microsoft Dynamics GP (Great Plains), Project Insight, Salesforce.com and QuickBooks.
This resulted in a lot of redundant processes. Their employees often had to re-enter the same data into multiple applications. Further complicating things, Cardinal Path has contractors as well as staff consultants who travel around the globe on projects and need access to corporate applications and data. It was clear that increasing profitability in the service industry with automation was needed.
The Solution: An Integrated Cloud SRP
Faced with difficulties, Cardinal Path decided to migrate to NetSuite's cloud-based Services Resource Planning (SRP) and NetSuite OpenAir Professional Services Automation (PSA).
This gave the company with a single view of project-related data and made it possible for employees to access their applications from any location.
This was an important feature as the company operates out of four offices in Phoenix, Chicago, Vancouver and Ottawa.
According to research by Forrester's George Lawrie, companies that moved to professional services automation software have seen benefits ranging from increased data visibility (52%) and reduction of administration (28%) to higher customer satisfaction (12%) and more accurate forecasting (12%).
Aside from this, they observed:
- 23% increase in annual revenue per employee
- 24% increase in average revenue per project
- 18% increase in bid-to-win ratios
- 130% increase in EBITDA (earnings before income tax, depreciation, amortization)
For Cardinal Path, the primary benefit has been a nearly 100% annual increase in growth, according to John Hossack. This came mostly from being better able to track resources, their utilization, and their project needs. Matching up skill sets—such as languages—to potential opportunities has also fueled growth.“For instance, we decided to take an engagement in Tokyo based on the finding that we had someone who could do it," John Hossack said. “The need for a PSA system isn't based on the size of the company, but on complexity. We have multiple tax issues, currencies, languages, partners, and client businesses around the world. You can be small but still have to deal with that complexity.
Did you know there are a lot of tools for managing web-based projects that can be set-up in 5 minutes or less? Check out some of our choices on task management, Gantt charts, meeting management, budgeting and much more in the Top 7 Project Management Tools.