In part one of our blog series, we talked about how professional service organizations can track and manage a project's profitability by implementing a professional services automation (PSA) solution. Today, we will focus on improving revenue with better forecasting tools increasing the benefits of utilizing a PSA solution.
At an organization's core is its people. You already know they are busy today, but will they be busy in six months? Being able to forecast your services and resource availability and exactly how billable those resources will be over the project lifecycle is a critical component to your project's success. Do you have enough resources in place? Are they the right ones, and will you need to deploy additional resources are common questions you might have when managing a project.
When any organization starts out, it's smaller, with less of a critical need to manage people and processes. Forecasting sales and service revenue was easily done in an excel spreadsheet shared among project team members. But in the last few years, your organization has grown, taking on larger deals, and it is becoming more difficult and much more important to manage costs and to have visibility both on profitability and delivery quality.
The Value of Information
Imagine knowing ahead of time that you will be short-staffed in a particular skill-set, or you will need more resources for a certain phase of a project. Imagine knowing what your real-time costs are on all projects at any given time. Armed with this knowledge you can take advantage of bench-time to train staff for that needed skill, or rework your schedule to plan for the extra resources needed for busier times during the project. Or if you are growing, hire more people to keep projects on track – all while keeping your projects on time and on budget.
The addition of a professional services automation (PSA) solution will provide you with the ability to forecast utilization levels and staffing requirements. Revenue forecasts in real-time will not only let you manage hours already spent but also provides you with the ability to track the dollars expended. Services automation tools enable organizations to check on expected performance and estimated revenue by employee.
PSA forecasting tools provide critical functionality to your project lifecycle enabling the delivery of predictable services and profitable results. These benefits include the ability to:
- Identify key information enabling team members to make more informed decisions.
- Gain visibility on utilization and expected revenue in both time and money.
- Create custom dashboards and reports providing valuable insight on the go.
- See the finances of projects in every stage: opportunities, in process and completed.
Because a PSA solution offers resource management capabilities, you can also now forecast out your resource requirements related to the services pipeline to more tightly control and influence your margin potential and maximize resource utilization.
We all know utilization is a key performance metric for any services-based firm – showing how much of a firm's capacity is being spent on revenue-producing work. The way a professional services organization manages and deploys its resources can have a significant impact on the business and its bottom line.
Our next blog in this series will focus on how to manage and optimize those resources to maintain profitability.
Guide - 5 Steps To Improving Disconnected Processes in Professional Services Organizations