In our first two blogs, we covered how professional service organizations can track and manage a project's profitability as well as the best ways to forecast revenue utilizing innovative forecasting tools. Today, we'll take a look at professional services software from a resource efficiency perspective.
The way a professional services organization (PSO) manages and deploys its resources can have a significant impact on the business and its bottom line. Who is the right person to staff – more senior, more junior? What about the costs? What percentage of time is being spent generating revenue, and for salaried employees, any time not generating revenue is costing the organization.
The challenge is collaboration – how do you keep your organization busy and profitable at the same time? PSOs are often made up of smaller operational departments that don't always communicate effectively, making resource management more difficult. The initial focus is on landing the next project, and then later in the process, project managers find themselves asking about resource availability. To manage utilization effectively, project mangers need to be able to express their staffing needs early and up front. Resource managers need the tools to efficiently match those project needs to the availability of appropriate resources. Even the smallest improvements in this staffing and resource management process could yield huge rewards in terms of utilization. Giving a project manager the ability to express the need for a new team member, or how flexible that team member can be in terms of a start date, can mean the difference between being able to work with current staff, or needing to hire someone new. Arming a resource manager with the ability to gauge staff availability at-a-glance could mean the difference between winning new business and losing it.
Utilization is one of the key measures that organizations use to gauge the efficiency of their business. Trading out a less costly resource where possible or substituting in a more experienced team member when a schedule is tight can have a large effect on a project's success, and ultimately, its profitability – not to mention the benefits of keeping the client happy. Figuring out how to optimize both utilization and profitability is the key to running a successful organization.
Leverage Real-Time Visibility
To fully leverage your organization's service workforce and the effect it has on your bottom line, you need to have a complete understanding of the entire project portfolio as well as visibility into your resource pool. A professional services automation (PSA) solution provides managers with high-level visibility into resource skills, availability, and costs, to be able to match the right person with the right project at the right time. PSA's real-time data allows you to analyze utilization more effectively, taking the guesswork out of resourcing a project and giving you a better understanding of any fluctuations in your resource pool.
Visibility into historical project data allows the sales team to produce more competitive proposals and helps them to win more projects. Additionally, the sales team is able to ensure availability of key project resources up front and build accurate project estimates from templates giving the project team a better chance at success once the project starts.
PSAs provide automated utilization reports giving you the ability to keep projects on time and on budget. These benefits include the ability to:
- Start projects faster.
- Automate scheduling.
- Manage your staffing needs with more confidence.
- Increase resource utilization – matching skill sets with project demands.
- Build accurate project budgets.
- Increase employee morale – avoid over utilizing / underutilizing certain work groups.
- Gain visibility into future hiring needs or training opportunities.
There are many factors that play into a PSOs profitability. No firm will be able to control all of those factors, but with reliable processes and systems in place, your organization will be able to keep a handle on healthy profit margins.
Hopefully you have a clearer picture on how to more efficiently manage your organization's resources. Our next blog in this series will focus on maximizing your revenue opportunities by making sure each and every hour and expense is tracked and billed accurately.
Guide - 5 Steps To Improving Disconnected Processes in Professional Services Organizations