Where to Even Start When Looking For an Enterprise PSA Solution?
It’s become an increasingly confusing software landscape out there. In a previous post we covered what a PSA actually is. It is a fact that the top performing professional services organizations all have figured out that a PSA is a key differentiator in crushing their business goals. However where do you even start? There is so much jargon out there:
- Project Portfolio Management Software
- Professional Services Automation Software
- Enterprise Resource Planning
- Project Management Software
- Full Suite PSA
- PSA for Salesforce
- PSA For Hubspot
- PSA for Microsoft Dynamics
- PSA for Managed Service Providers
- PSA for Project Based Organizations
- PSA for transactional services
- PSA for white collar services
Exhausting! So where should you begin?
Is an Enterprise PSA Solution Right For Me?
It depends. The best place to start is really understanding the different types of project management software that exist. According to SPI Research, 85% of the top professional services organizations use Enterprise PSA solutions. However, it is common to see confusion around the vague category of project management technology. Even Gartner has bucketed project management, PPM and PSA together.
So lets quickly set the groundwork as we think about these three categories of software:
Category 1: Project Management Software
Project management is almost exclusively focused on good delivery. How to I manage tasks in pursuit of execution? What project management alone fails to understand is how to account for costs in a project and the supply demand curve of resources across an enterprise professional services organization. It also fails to see the bigger picture and roll up against all projects.
Category 2: Project Portfolio Management Software
Project portfolio management software was created to manage many projects that are underway, not just a single project. PPM tools help with managing the delivery of a project in an enterprise way. Typically they are chosen for internal projects. PPM does not get into project accounting, customer invoicing, revenue recognition or forecasting of future revenue that could (or could not) be generated on projects.
Category 3: Professional Services Automation Software
Professional services automation software is typically used for external projects where customers are being invoiced. There are really two types of PSA solutions out there. Every tool will say they do it all but the reality is that there is a fairly distinctive line between project and managed service-based PSA tools.
Project Based PSA Software
Managed Serviced Based PSA Software
- This type of PSA is best suited for recurring services models. Think retainer, subscription work or any predictable revenue stream.
What Situation Should I use Enterprise PSA or Project Management Solutions in?
There are a two simple questions to start with when diagnosing if Enterprise PSA is the right application for the job. To be clear, there are probably a ton more BUT lets narrow our focus before getting specific:
Are we delivering external (billable) or internal (non-billable) work?
How many projects are we working on?
If you answered: one or a few projects you are probably looking more for a tactical solution instead of enterprise grade. Probably best to focus on project management solutions. If you answered: many projects. Enterprise grade is likely where you want to start your exploration.
If you answered: many projects but internally focused, PPM is likely a good starting point. If you answered: many projects but externally focused, you should start your search with an enterprise PSA solution.
What is The Typical Tech Stack For Enterprise PSA Solutions?
Enterprise PSA solutions sit as the glue between the “front office” (customer-facing operations) and the “back office” (administrative duties, such as accounting). This connectivity ensures that project managers have a comprehensive perspective of their project pipeline and can make necessary adjustments to their budgeting and resource plans.
Over the years, the number of ancillary solutions outside of CRM, PSA and accounting have grown significantly. Those are represented on the right hand side of the diagram. For example, we continue to see the expansion and growth of HubSpot as a CRM and Marketing Automation platform. Expect this to continue into the future.
When Should I Start to Evaluate an Enterprise PSA Solution?
The easiest way to think about this is when you have enough complex projects that you can stop counting them on one hand.
According to SPI research, “Services firms need to be using the first half of 2021 investing in people, processes, and technology (like PSA) in order to take advantage of that pent-up demand, or they will be left in the dust.”
A more nuanced view of this is when a professional services organization wants to focus on tomorrow, not just what is happening today. The ability to forecast project profitability, resource demand creates the ability to steer the entire business toward outcomes.
What that breaks down into is four specific common needs:
- Profitability: I need to be able to forecast the profitability of my projects
- Delivery: I need to be able to deliver quality work
- Resources: I need to be able to manage my resource utilization across projects (both current and future)
- Growth: I need to be able to gain foresight into my business to unlock outcomes
Enterprise PSA Solutions With Projector
In summary, Enterprise PSA solutions typically should be sourced for:
- PSO’s with many/complex projects
- PSO’s with external (billable) projects
Most importantly, an Enterprise PSA solution needs to connect well into the tech stack between the CRM and accounting technologies. With abilities to manage the today but forecast the tomorrow. As you start on your search, connect with the Projector team. Even if we aren’t the right Enterprise PSA solution, our commitment is to always point you in the right direction.