Selling services is not like selling products…
When you sell a product, all you have to do is deliver it. As long as you have stock on-hand, you can fulfill the sale immediately. Sell a service and your work has only just begun. For example, let’s say you sold a 2-day consulting package to a client in another state. You have five consultants on staff. You (or someone in your organization) will have to find a time that works for both your client and for one of your consultants. Travel arrangements will have to be made. Lodging, meals, and a hundred other details will have to be sorted out. All to fulfill that one sale.
How PSA Software Is Different than CRM, ERP, and Project Management Software?
CRM software stops once you’ve made the sale. It’s great at managing a pipeline and estimating revenue. But if you sell services, a CRM system doesn’t help you schedule your human resources after a sale has been made. Project management or ERP software can help with the scheduling side of things. However that means you’ll be managing the same clients out of two completely different systems. When you make a sale, someone at your organization will have to transfer data from your CRM system into your project management or ERP system.
That’s a process that’s inefficient and likely to have errors. Professional Services Automation (PSA) software gives you one system to manage both prospects and clients, without having to transfer data between systems. It doesn’t mean you have to drop your current CRM provider. If you use Salesforce.com, you can simply add a service like ours, which works natively on the Salesforce platform.
Is PSA Software Right for My Company?
Here are 5 questions to ask:
1. Are “People” Required to Fulfill Your Product Orders?
The first thing is to be clear about what you’re selling. If you sell services directly, people are your product. In that situation, having PSA software will help you better manage both the sales process and the delivery of your services. If you sell products, you still might need to manage human resources to deliver those products. Do you have an install team? Do you require a certain number of hours of training or consulting for new customers? If so, your company could also benefit from Klient PSA Software.
2. Does Your Company Try to Accurately Predict Revenue and Expenses?
It’s not easy for a services company to accurately predict revenue and expenses. There are often many costs that go along with delivering a service, and those costs can vary widely depending on the client you’re working with. PSA software includes the ability to more easily predict both your revenue and expenses.
3. Does Your Company Use Salesforce.com?
Salesforce CRM is the world’s most popular CRM system. It’s AppExchange is also the leading enterprise software platform in the world. Companies using Salesforce CRM have access to thousands of applications that work natively on the Salesforce.com platform. That includes PSA software that works directly with your existing CRM database. Native Salesforce apps use the same infrastructure and database as your Salesforce CRM. They also have the same reliability and security standards.
4. Are Staffing and Turnover a Challenge?
Staffing and turnover are often sources of frustration for service providers. It can be difficult to know whether you really need to hire a new consultant or provider for your team. Will you have the work to justify the new hire? Or will you just be paying for someone to sit around all day while your sales team tries to fill the schedule? The best way to make good decisions about staffing is to have good data. PSA software can give you a comprehensive view of how many resources you’ll need in the coming months compared to what you have on staff.
5. Have Customers Ever Expressed Frustration While Trying to Schedule Delivery of Your Services?
Finally, there are your customers to consider. Is “scheduling” a constant headache? Have customers ever been frustrated trying to find a time that works for both their schedule and your team’s schedule? From a financial standpoint, logistics frustrations also kill referrals, which is usually a big driver of client acquisition for service companies. If scheduling is costing you referral business, PSA software can help your team deliver a smoother experience for everyone.
Ultimately, selling services is just like selling anything else—your customers have to see value in the service you deliver to them. PSA software can help your team deliver a great experience to all your clients. It can also help your management team make data-driven decisions about staffing and scheduling, instead of just trying to guess.
If you’d like to learn how to deliver more value for less expense in your service business, we’d love to show you more about how PSA software can help.
So you made the decision to adopt a Professional Services Automation (PSA) solution for your organization? Great choice! But the work is not over. Once you’ve decided which PSA tool is right for your business, you now need to approach the implementation process strategically in order to unlock the full potential of the solution. That strategy must include processes and practices that will encourage employee adoption of the solution, since a tool is only as powerful as the people who wield it.
Here are three strategies to ensure that the people who will use your PSA solution are not only excited about the new tool and eager to make use of it, but will also be equipped with the knowledge and training they require in order to use it wisely and maximize your investment into the product:
Get buy-in from your team early by outlining the benefits of adopting the new solution
In order to achieve wide-spread adoption and support of the new solution, getting employee buy-in right from the start of the process is key. Clearly identify and outline for your team the reasons why your organization is investing in this solution and how its functionality will be of benefit to them and help solve problems or challenges they currently face.
Be sure to establish and share the business benefits you are expecting to achieve after go-live. This can include benefits such as achieving scalability, reducing overhead, or increasing business predictability.
Allow your team an opportunity to describe current challenges they face specific to their individual departments, and explain to them how they can use the new solution to help them overcome those challenges.
Start by training a few select people on your team, and make sure you have representation from every department that will ultimately use the solution
Approach your implementation with a select team of employees that are excited to try out the new solution and that represent different stakeholders in your organization.
A PSA implementation team that includes stakeholders from only the services team, for example, will miss critical requirements from sales, resourcing and the back office, which will slow down adoption across the organization. If you run a consulting organization, involving someone who understands the needs of your consultants in the project planning will go a long way to ensuring consultants will use the tool when it goes live. Take time to understand who will actually be utilizing the tool and include representatives from those different areas of the organization in the actual implementation process so any potential challenges can be raised in a proactive manner.
Encourage feedback and check-in regularly with your team to address concerns
Once you’ve gone live with the solution, don’t just sit back and hope that your employees are adopting the tool to its full capacity. Schedule monthly check-ins where you sit down with various departments and ask questions about how they’re using the tool, where it’s benefiting them most, where it isn’t solving their challenges, how it could be used better, areas where they could use some additional training, etc.
Doing so will encourage your employees to test new features of the tool and find new ways to use it, and they will trust that their feedback is being taken seriously and that the organization is interested in helping make their jobs easier by maximizing the effectiveness of the solution.
Time is money, especially for consulting firms.
This means that project management isn’t just a way to track what is or is not completed; it is also the best way to make sure resources are being used strategically, that output is maximized, and that progress is in line with projections and commitments.
In a consulting company, project management can help improve profitability and productivity by improving timeline and budget management, maximizing resources, optimizing processes, and ensuring consistent and timely deliverables.
Here are some of the best project management tips for achieving best-in-class consulting services:
Scope Thoroughly And Specifically
If there’s one thing that every consultant dreads, it’s a mid-project change in scope. One of the biggest threats to a project’s profitability is when the scope changes partway through a project and timelines and budgets get thrown out of whack.
Taking the time to truly understand a project and include a detailed scope of work in the contract can help to prevent the scope of work expanding without compensation. It gives you the opportunity to create change orders—including an updated budget—if a client comes back with additional changes not included in the initial scope of work.
But scoping a project should be equally as important in terms of your project management. Being specific about what is included in each stage of a project will enable your employees to do exactly what is required—no more, no less—for a more controlled output. Being specific about project scope within your team means you’re ensuring additional resources aren’t being used where they won’t result in actual productive business impact.
Don’t Start From Scratch When It Isn’t Necessary
Efficiency is key to productivity and profitability. Most consulting companies have aspects of their deliverables that are repeats in whole or in part of products already completed for other clients. Whether this is templates of documents, programming code, presentations, or other projects, it can be highly productive to prevent redundancy in your consulting company. This allows you to produce similar output with decreased input.
A helpful tip is to make it part of your project management process to identify what aspects of completed tasks may be reusable, and to have these items readily accessible to your team. It can also be helpful to tag tasks in your project management software or Professional Services Automation (PSA) solution that can be completed using one of these reusable documents.
Regularly Update The Client And Check-In On Their Satisfaction
Don’t initiate a project and then fail to check in until the deadline is approaching. Healthy project management requires regular check-ins to make sure the project is developing on time, on budget and most importantly, to the customer’s satisfaction.
A good tip is to identify which points of the project have the highest risk of throwing the project off course and the earliest points you’d be able to detect these threats, and to set—at minimum—check-ins at these points. It can also be helpful for consultants to choose a PSA solution that allows you to see at a glance the health of your current projects. A tool with surveying capability to routinely request client feedback and gauge their satisfaction level is an added bonus as well.
Keep Everything In One Central Location
Our next project management tip for consultants is to keep everything in a central location. Many consultants have fallen into the trap of using multiple file management systems including multiple messaging platforms (such as email, chat, or Slack) as well as CRMs to track conversations, DropBox and/or Google Drive to store documents, different file versions unintentionally saved on multiple devices, and so on. This can lead to confusion, inconsistency, and lost productivity.
Instead, part of your project management process should include managing documents, revisions, client feedback, customer information, and communication in a central location. A robust PSA solution like Klient Software can manage your entire services business on one platform. And by integrating with your existing CRM, ERP, and other applications, you can ensure that all of your processes are in sync.
Learn From Past Successes And Failures
The final, and perhaps most important part of your project management strategy should be a project debrief at the completion of every project. This debrief will help you and the rest of your company to understand what went well, what went wrong, and what processes can be improved in the future.
If you managed your project effectively, you should have analytics that show the progress of task completion, information about when budget was used and whether it was in line with projections, resource use compared to projections, and reports from any risks or changes that may have manipulated output. A PSA solution can be especially helpful in making sure you have this data available at the completion of a project.
The information from each debrief should then be compared to previous reports. Is there a part of your projects that your company predictably underbids? Resources that aren’t being used efficiently or that aren’t being given enough time to complete tasks? Steps of the process that tend to go slower or faster than expected? Analyze your data, adjust processes accordingly, and repeat what is working well.
At Klient, we speak to professional services organizations of all sizes day in and day out. By doing so, we’re no strangers to hearing about the many day-to-day challenges that services businesses are facing and striving to overcome.
One such frequently-raised issue has to do with month-end close. Or more specifically, the fact that month-end close isn’t always happening by month-end. In fact, it’s not uncommon for some companies to finish closing their month 2-4 weeks after the month has finished.
What is the problem with a late month-end close?
Just because it’s common for companies to have a late month-end close, doesn’t mean there aren’t challenges that this presents for the success of the business.
By closing month-end late, the efficiency of the business is affected in several ways:
Firstly, it makes it difficult to send out accurate invoices promptly. And if you don’t send out invoices, you are not going to get paid. The payment terms start from the day the invoice is received – so you are compounding the problem of late payment. Adding a month to what may already be a 60-day cycle affects cash flow. That means you don’t have that money available to invest and scale – it may also mean you have to borrow money, which creates an unnecessary cost for the business.
If you are leaving periods open – or worse still, reopening them after closing them, it is difficult to ensure that the data you are relying on to run your business is accurate. This problem is actually compounded if you introduce a Professional Services Automation (PSA) solution to automate your business. PSA is an automated system, and it builds revenue forecasts and so on from the data that has been put in. Without accurate and timely data, your forecasting will be shoddy at best.
3. Planning For The Future
The main issue with failing to close periods sharply, is that this affects your ability to look forward. If you don’t get the data from last month until half-way through the next month, that affects your ability to make smart decisions for the future success of your business. Problems get pushed forward and only compound. It also makes it hard to share accurate and timely information with customers and key stakeholders. This affects your ability to build long-term relationships with your clients and increase your repeat business, both of which are important to the future success of your business.
The good news: A PSA solution can simplify month-end close
By adopting a PSA solution, an organization can greatly improve their month-end close process and resolve the aforementioned problems.
Here’s a few ways that PSA can help:
1. All your data in one place, for everyone who needs it
One of the important points to remember here is that your business data is not only the property of the finance team who want to use it for accounting purposes. It is also important for operating the business at every level, meaning your sales and services teams need access to it as well.
With a PSA solution, every team will have access to real-time data that will allow them to do their job as efficiently as possible.
2. PSA simplifies timesheet completion
A well-built PSA solution, like Klient PSA, enables services teams to easily enter their timesheet data anytime, anywhere.
This will empower your services team to keep their timesheets up to date, rather than having to chase your employees at the end of every month to fill in their time, often delaying the month-end close process.
3. PSA helps share responsibility for month-end close across departments
We recommend as good practice sharpening the month-end cadence by getting project managers to help close the weeks. Project managers know what is happening in their engagements. If there is a difference between what was supposed to happen and what has happened, the project manager should be aware of this.
When project managers are responsible for closing the weeks, they will make sure that timesheets are filled in and available. The same goes for milestone dates, resourcing requirements, etc. This all means that closing the month is less onerous and can happen within a day or two of month end.
4. PSA can be integrated with your back-office
We recommend looking for a PSA solution that can be integrated with the solutions that drive your services business. This includes pre-built integration with your back-office accounting or ERP application.
By integrating your PSA with your back-office, you can ensure that invoices and other important billing data makes its way into the accounting application in real-time, enabling your accounting team to collect on outstanding balances efficiently, and close the month in a timely manner.
Resource utilization is one of the key measures that services firms use to gauge the efficiency of their businesses.
It expresses what percentage of their time people spend generating revenue for the organization. Since the vast majority of resources in most services firms are salaried employees, that time not spent generating revenue is still costing the organization money.
Whether you’re the VP of services, a project manager, resource manager, or consultant, you should know that utilization is critical to your bottom line, and always look for better ways to track it and improve it.
Here are a few essential ways to improve resource utilization for your professional services business:
Have the right people for the right job at the right time
Being “resource-ready” is about more than just ensuring your employee headcount is large enough to handle influxes of work. It’s also about knowing you have the best possible resources, with a variety of skills and experience under their belts, to equip you to handle projects of all types and sizes. Having the right team on the right project at the right time is what truly drives success for services organizations. It’s a huge piece of what keeps projects on track, margins in line, and customers happy.
One way to improve this is by ensuring your sales and services teams are working with the same data, in the same system, from the same customer record, so everyone involved has a view of current customer projects, staff commitment, and pipeline. The sales team will know what service levels they can promise, while the services team can see what’s in the pipeline and build the right staff to deliver.
Track utilization using the right tools
If you’re still using spreadsheets to track utilization, the time to stop was yesterday. Resource managers can attest that nothing throws utilization off its axis quite like the chaos of managing resources, conflicting schedules, and a wide-range of billable rates. Not only is it extremely time-consuming to use spreadsheets to track utilization, but it also sets you up to make numerous potential errors that could be damaging to your margin tracking and profitability.
To improve utilization tracking, look for a powerful and modern professional services automation (PSA) solution that will make it possible to automate utilization tracking with speed and accuracy.
Don’t forget to track utilization against profits, too
Tracking utilization in itself is important, but at the end of the day operating a successful professional services organization will not be possible if your utilization rates are at an all-time high, but your bill rates are going down.
In the professional services industry, utilization and profitability are two sides of the same coin. It’s quite simple to optimize one at the expense of the other, at least in the short run. Discount your rates heavily, and your utilization will soar, but to the detriment of profitability. Overwork your people without investing in training and professional development, and you’ll see great resource utilization today, only to see major drops in profitability next quarter. Figuring out how to optimize both at the same time is one of the real keys to running a successful professional services business.
This is another instance where it pays to have sales and services teams on the same page with access to the same data.
Leverage a PSA solution built native on Salesforce to keep Sales and Services in sync
By unifying all the data related to your customers, projects, resources, financials, all in one place, not only does it make calculating utilization and increasing it easier, but it accounts for every detail and ensures that your sales team and services team will have access to the same data and be able to work together for the greater good of the organization as a whole.
One way to improve the synchronicity between sales and services teams is to leverage a PSA solution that is connected to your CRM tool, like Salesforce. A modern PSA solution connected to your CRM system has become a no-brainer when it comes to boosting your utilization figures. Leading industry analyst firms like Gartner, Services Performance Insights (SPI), and Technology Services Industry Association (TSIA), report that when organizations have a PSA solution integrated with a CRM, their utilization is 4% higher than organizations that don’t have the same system in place.
As your Professional Services Organization grows and evolves, the software and tools you use to be successful will inevitably change over time as well.
Eventually the time will come when your simple time and expense or basic project management software will no longer be sufficient for running your business effectively, and you will need to consider implementing a more robust and comprehensive project management tool such as a Professional Services Automation (PSA) solution.
However, changing the tools your employees have come to know and be comfortable with can often be challenging. It usually helps if you can encourage your team to be excited about the new software by showing them how valuable it will be in helping them do their job more efficiently.
Here are 6 strategies to consider when introducing new project management software to your team in order to gain their support and make the transition as frictionless as possible:
#1. Talk about it early and get your team’s buy-in
It’s important to remember that you never want to blindside your team with new project management software. Make sure they know new software will be coming as early as possible (even before you determine which software to purchase). It can also help to get team members’ feedback on features they’d like to see in the software. These conversations can help warm them up to the idea of a new software solution while getting them excited about the new functionality they’ll be able to take advantage of.
Be wary, however, about asking your team which software they’d like you to implement. By doing so, you’re likely to receive a wide range of responses making it nearly impossible in the end for you to select one that will please everyone. Instead, ask your team members ahead of time which features they’d most like to see. You can also offer them a list of potential features to rank in order of importance. Let them know you’ll use that feedback to find the right project management software for the team as a whole.
#2. Make sure the software you select is a true replacement for existing tools that are important to your team
Make sure your new software is an ample replacement for whatever tools your team currently uses to manage similar tasks. If a team member doesn’t feel that the software fulfills his or her needs, they’re more likely to continue relying on their old project management methods instead of making the switch.
You may be trying to replace 2 or more tools with 1 new and more comprehensive tool, but be sure to double check that the new tool will have all of the functionality that is crucial to your team’s success and that you aren’t taking away any important capabilities from them. Adding new functionality and creating easier ways of doing things is a plus, but be careful that you’re not eliminating capabilities by sunsetting software that is imperative to the team’s performance while offering no suitable replacement.
#3. Have the basics set up before you introduce the software to your team
The setup process for a new project management tool can be time consuming. Having basics in place, such as team member logins, project information, client information, etc., before introducing the software to the team can help things go more smoothly. It will make the migration process to the new software seem less daunting and will also provide real-world examples for your demo/training instead of hypothetical ones.
Remember that the less tedious setup your team has to do before they dive in and start using the software, the more likely they are to quickly adopt it and begin using it to its full potential.
#4. Make sure everyone receives appropriate training in advance of migrating completely to the new software
Each member of your team likely has different levels of comfort with technology and differing abilities for learning new software. Tailor training experiences based on the comfort level of your employees. Some may prefer to attend a web-based training with a support rep or a detailed in-house training session. Others may prefer to watch a couple of online tutorials then explore the software themselves. Whatever the method, what’s most important is ensuring each employee gets some form of real training. This helps to create positive first interactions, enables them to more effectively use the tools, and helps them to hit the ground running when it’s time to migrate to the new software.
It may also be beneficial to select 2 or 3 people from your team who are eager to learn new software, and generally adopt to new technology easily, to become in-house experts on your new project management software. These individuals can help the implementation process by answering questions that your other team members may not otherwise have reached out to support to ask, and can assist you in training the rest of the team.
#5. Allow a sunset period with the existing tool and give enough time for your team to switch over to the new software comfortably
It’s important to fully detach from the previous tool(s), but not immediately and not without warning. It can take time to fully move all of the information over and to migrate to the new system. It can also take time for your team to adjust.
However, as much as it’s important to allow time for adjustment, it’s equally important to have a hard stop date. With advanced warning, your employees can adjust and transfer information without feeling rushed. They are also less likely to hang around in the old system for their own convenience.
Set this stop date while in advance and make sure everyone on the team knows that they should ask the necessary questions and request additional training if they need to, in order to ensure they are comfortable with the new software by this deadline.
Is your team considering a more comprehensive project management tool?