Managing projects based on a consolidated view of performance has always been an attractive idea in the professional services sector, but one that has been traditionally difficult to follow up on. Accounting for revenues, costs, profits, and performance to both budget and schedule for in-flight projects requires a complex data gathering and analysis processes.
Bringing together information from disparate systems and the detailed records necessary to collect and interpret this data used to be so complex and time-consuming that it wasn’t a viable option for most organizations. The big data movement is changing this dynamic, and professional services software systems that can bring together diverse information types in real time offer the visibility organizations need to manage the complexities of project delivery on a project-by-project basis.
Big data is often viewed as being all about the volume of information handled. Organizations in sectors ranging from e-commerce to government analyze massive amounts of information to accomplish everything from predicting consumer behavior to understanding macroeconomic trends. In reality, big data is about more than just large data sets. Turning big data into insight is built around three distinct “Vs”: volume, velocity, and variety.
Focusing on the velocity and variety aspects of big data analysis is where professional services firms can gain a competitive edge. Most organizations have data that simply isn’t actionable to the business because it is siloed within disparate systems. This limits the executive team’s ability to make better decisions on a day-to-day basis.
Professional services management software may not be handling the huge volumes of data organizations typically expect to see with a traditional big data environment. What it does do is make sense of the variety of information companies need to efficiently manage their businesses, all at the velocity required to keep up with the enterprise in real-time.
Big data disrupting business models
Research from IDC found that the big data trend is transitioning beyond the early adopter stage. After rapid growth in 2016, revenues in the big data market are expected to expand by 12.4 percent in 2017. Dan Vesset, group vice president for analytics and information management at IDC, explained that analytics software has matured.
“After years of traversing the adoption S-curve, big data and business analytics solutions have finally hit mainstream,” said Vesset. “BDA as an enabler of decision support and decision automation is now firmly on the radar of top executives. This category of solutions is also one of the key pillars of enabling digital transformation efforts across industries and business processes globally.”
This digital transformation is affecting how savvy consulting firms manage their operations through the widespread adoption of professional services management systems. This industry-focused class of software can provide project-level transparency into operations and make that information actionable for managers. Once management teams understand operational health at the project level, professional services management software can offer the reporting and analytics tools to easily compile that data into big-picture reports that offer visibility into the organization as a whole.
This is accomplished through three tiers of software that become invaluable when integrated into a central professional services management ecosystem.
After years of traversing the adoption S-curve, big data and business analytics solutions have finally hit mainstream.Dan Vesset
Tier 1: Centralized data gathering
Many small professional services firms bootstrapped themselves on a delicate web of loosely interconnected spreadsheets, whiteboards, email threads, digital or physical files, and manual processes. A frightening number of larger, more sophisticated firms continue to run on the same delicate web, just one that has grown in complexity and fragility on the brink of collapse.
Modern services management systems dispense with all the disparate siloes, all the error-prone manual processes, all the friction points that prevent the free flow of information across the organization. They provide natural access points to different people in the company as they perform their jobs, whether it be a time tracking app for a billable consultant, a task planning tool for the project manager, or an invoice review mechanism for a finance clerk.
More importantly, these natural access points are not separate, siloed systems, but rather simply different views of data managed within a single, integrated product. As such, professional services management software can integrate time sheets with project plans, delivery risks, invoices, vendor payments, expense reports, contractual agreements, resource schedules, and budgetary constraints. By providing a system that is a single, consolidated representation of the truth, the centralized data gathering capabilities of a services management solution can tame the enormous variety inherent in the data found in most big data environments.
Tier 2: Industry-specific, real-time data management
One of the most powerful aspects of software specifically designed to manage professional services organizations is that it commonly is the embodiment of business rules built specifically for the consulting industry. It is these business rules that take the raw data collected, guide it through appropriate workflows, manage it under required constraints, and turn it into information needed to run the business.
For example, many simple standalone systems—from a punch clock to an Excel spreadsheet to a dedicated mobile app—are capable of capturing how much time is spent by team members on different projects. Services management solutions not only make time tracking simple, it routes that time through configurable time approval workflows, values the time based on complex bill rate structures, ensures time work doesn’t exceed contractual limits, and automates the process of creating and emailing invoices to clients.
The better professional services software will go one step further by taking this operational data and turning it into accounting transactions that can be integrated automatically into the popular back-end accounting systems such as Intacct, Microsoft Dynamics GP, QuickBooks or Sage. By becoming the project accounting subledger for a general ledger system, services management solutions bring capabilities specifically designed for the professional services market to accounting products that were not specifically designed to support the needs of one industry over another. Choosing the right project accounting subledger can even help growing organizations delay having to upgrade their general ledger as they grow in size and complexity by shifting the burden from the accounting system to the professional services management tool.
What’s more, because these business rules, workflows, and controls are able to be applied to the raw data on a real-time basis, software built to manage consulting firms help those businesses manage the velocity of the data. With more modern systems, the long lags between performing the work and getting paid for it, between having a project get into trouble and finding out about it, or between having a hypothesis and getting the data to prove or disprove it are no longer factors that need concern professional services managers.
Tier 3: Analytics and reporting
While services firms may not have to process the petabytes of data per day that companies like Walmart or Amazon are used to, software used to manage professional services businesses still have to make sense of larger volumes of data than is practical with manual processes. A typical 1,000-person consulting firm likely deals with thousands of expense reports per year, tens of thousands of invoices, millions of individual time entries, and hundreds of millions of dollars in financial transactions. Analysts say that professional services firms as small as 20 team members should implement professional services management software, as that is the inflection point where data volumes are unsupportable by manual processes.
Getting relevant data to the right people is a central theme in all of these issues. Greater visibility into projects and fiscal details is essential to monitoring organizational health. Integration with dedicated accounting solutions is key to giving relevant stakeholders access to a single source of truth for financial and performance indicators. Analytics and reporting systems take these capabilities to another level.
With all of this data together in one place, organizations can quickly identify:
- How much revenue a project will earn
- How much labor the organization had to invest to earn that revenue
- What underlying causes might be eating into healthy project profitability
- What skills are in high demand and what staff has high availability
- What types of projects and people are more profitable than others
- Which clients have projects in trouble or in need of intervention
Not only is this data available from the best professional services management systems, but the ones that offer integrated business analytics can help companies:
- Create custom reports to showcase key performance indicators of their choice
- View data sets through straightforward visualizations that make it easier to consume information and spot trends
- Embed important reports or visualizations in dashboards so users are up to date on project statuses and potential issues
- Align reports and dashboards to specific organizational priorities to get a clear view of project and portfolio health
Data is only useful if organizations are able to make that information actionable. Spending time creating reports or poring through extensive spreadsheets takes time and resources. Streamlining and automating the reporting processes minimizes the amount of work that goes into gathering and analyzing relevant information, making it easier to dig deep into how each project impacts performance.
Legacy reporting methods are unable to deliver a mid-project performance view of each project without wasting valuable time and resources. Organizations with modern data analytics systems, on the other hand, simplify reporting to such an extent that stakeholders can easily view the health of each project in real-time.
With a clear view of each project’s health in place, reporting tools enable professional services firms to compile all of those details into more strategic reports and data visualizations. These views into performance show how the organization is functioning as a whole, delivering visibility into potential problems before they arise.
The big data revolution is changing how businesses access and use data. By assisting services firms to easily manage the volume, the variety, and the velocity of the data needed to efficiently run their businesses, professional services management software is key to thriving in an increasingly competitive marketplace. Gaining greater visibility into revenues, cost, profit, and delivery success at any time allows organizations to unlock the potential of their enterprise data and leverage it to gain competitive advantage.