What is Professional Services Automation?
Professional service organizations are different than many other organizations, especially when it comes to choosing software applications for their business. We discussed selecting professional services software on the most recent episode of the ERP Advisor Monthly Conference Call Series. You can listen to a recording of the call above, or find a summary below.
When discussing professional services software, you will often hear it referred to as professional services automation (PSA), Services Resource Management, ERP for Professional Services, or Project Portfolio Management (PPM). PPM has a slightly different meaning than the others, as it is often driven more towards internal IT groups or internal project groups with a focus on capitalization of the overall project.
Professional services automation is made specifically for architecture and engineering firms, construction firms, CPA’s and accountants, IT Consulting firms, advertising and media firms, lawyers, etc. These are organizations that are service-based and ultimately sell people’s time. This category of software is beneficial for departments within larger companies as well. For example, NetSuite has a professional services department within its organization that implements NetSuite, and they have professional services automation to track time, billing and expenses for each of their projects. If there is a department within a large organization that is running their own project internally, this software can be beneficial in that area.
Evolution of Professional Services Automation
Professional services automation has changed exponentially throughout the years. It started as simple task management with a tool such as Microsoft Project, where tasks were listed and who was going to do each task. Then came the evolution of large scale projects such as large construction or aerospace and defense projects where a heavier project management tool was needed like Primavera. Still, these software applications did not focus on the financials of project management until about 1999 when Open Air came on the market. This opened the door for software in the professional services sector. Now, software is moving to more cloud based applications. There are so many applications available for professional services, it can be challenging to choose the right one for your organization.
Professional services automation is especially beneficial for professional services organizations that provide a specific service to their clients. These organizations typically utilize a project management tool, but often need tools to track time, expenses, profitability, revenue recognition and more, which is why a specific software tool is needed. Next week, we will continue our discussion on professional services automation with the basic aspects of any PSA application.