Does Professional Services Automation Replace Project Management Tools?

Projects are at the heart of any Professional Services organization and critical to that is the discipline of Project Management to ensure successful project delivery on time and on budget.  As organizations seek to invest in a Professional Services Automation (PSA) tool, a question often asked is if PSA replaces PM tools.

So, what is PSA software, and how can it support the operation of a consulting organization? At a high level, PSA software can help consulting and project-based organizations improve operational efficiency and productivity.  Typical metrics a PSA tool may capture, billable utilization, project margins, delivery efficiency, and forecast against plan. These are not typically the metrics of traditional project management tools.

SPI Research, a research and consulting firm specializing in the services sector, defines Professional Service Automation as a software solution used to increase operational visibility and improve resource management, project management, and time and expense capture in project and professional services organizations.

Here are four key differences of PSA software versus PM tools.

Project Oversight For Continuous Process Improvement

Project Management software is focused on projects.  The emphasis is on helping you track tasks and collaborate so employees can manage and keep up with their day-to-day work.  PSA takes on a broader perspective by capturing information across projects providing valuable insight into repeatable projects and continuous process improvement areas such as budgeting and estimating.  A PSA tool, such as NetSuite OpenAir, is valuable for keeping project delivery in line with expectations and processes.

Measure Profitability With Project Accounting And Revenue Recognition

Project accounting varies from project to project, differing in the resources they require, their duration, and changes to budget. In many services businesses, no longer is project cost simply based off of employee labor times an hourly cost. PSA software project accounting functionality makes it easy to manage and calculate project profitability.

Every service business is unique and recognizes revenue according to its own schedule and guidelines.  PSA software project accounting functionality enables revenue recognition separate from project billing to support how your organization measures profitability.

Results of SPI Research benchmark study show that investment in PSA software can lead to increased revenue in services organizations.  This is largely due to the ability to easily identify and repeat projects with higher profitability.

Improve Insight Into Your Most Valuable Asset – Your People

With PSA software, you can make sure that the right resources are working on the right projects and avoid gaps in staffing.  A robust PSA tool, like NetSuite OpenAir, provides the ability to maintain accurate information that will directly impact resource utilization by providing insight into resource availability, employee skills, and experience.   Spreadsheets and other methods can quickly lose their viability in those real-life situations where there is a need to assign a resource to another project, project scope changes, or project schedule changes. With improved insight and accurate data, you can then conduct demand planning forecasts that can improve hiring plans as needed.

Improve Operational Efficiencies With Time And Expense Tracking

Timesheets track and record the amount of time spent on a task or project. As a tool used in most service organizations, PSA tools help to improve project execution and assist in decision-making. Timesheets are a big part of a PSA tool for project costing, tracking, job estimation, and client billing.

Expense management is also a critical part of a services business. PSA software can maximize the accuracy and timeliness of expense reporting and overall expense management. Like Timesheets, with PSA software, expense management directly connects to the project accounting and management features giving quicker and more accurate data for project costing and client billing.

PSA Software Includes Many Other Capabilities Beyond Project Management

PSA software like NetSuite OpenAir encompasses a broad range of capabilities – beyond those a project management of task management, work breakdown structures and time and project allocation.  The right PSA software can replace spreadsheets and PM only tools with a more robust solution. PSA software provides visibility across the entire service delivery lifecycle that improves the ability to more efficiently manage business operations and make strategic decisions impacting growth and profitability.

To learn more, read the success stories of how organizations have made the transition to NetSuite OpenAir or schedule a short 30-minute call with one of our Top Step PSA experts.