Professional services automation (PSA) is changing the way professional advisory firms run their business. For consulting agencies working in competitive markets, it can’t come soon enough.

PSA increases productivity and profitability for businesses that provide services for costs based on time billed. It reduces repetitive, manual tasks so that employees can focus on advisory work and eliminate much of the ‘admin’ that often slows down their day.

Essentially, PSA focuses on people, projects, and performance. It can automate and integrate core business processes while providing visibility into key performance drivers and project profitability – much like an ERP system for companies billing time worked on a client’s behalf.

PSA systems frequently cover project workflow planning and scheduling as well as research and development. Their scope can also include supply chain management, financials, projects, HR, management and documentation. Features can also include time recording, billing, reporting, and invoicing. PSA systems are often integrated with accounting, customer relationship management (CRM) and payroll systems.

Typical PSA customers include marketing, management, and engineering services companies. They also include accounting, legal and recruitment firm as well as graphic design, sales and advertising agencies – companies that multi-task different types of work for different clients.

Medium to large sized enterprises have already seized on the advantages of this technology as it enables advisory firms to do ‘more with less’ through well-managed processes. However, what most smaller professional advisory firms don’t realize is that PSA, and applying effective business processes to the way a business functions, is arguably more critical for an SMB than it is for a larger business.

How about SMBs? When it comes to technology we often hear the response, “It’s too expensive and too complicated for my business.” “Why do I want PSA? Accounting is all I need.” These sorts of comments are most often heard from smaller firms. The main issue is the cost for the technology versus its business case.

Typically, the smaller advisory firm is more focused on clients and cash flow than they are on upgrading IT systems. As long as the PCs are running okay and the accounting software keeps financial records, the business is on track.

However, as a professional services firm grows, issues start to appear: the more clients you have, the more administration work is generated. So more staff is needed to keep more records, which have to match each other. Operational costs go up much faster than profits. The owner then realises that the business is stuck with a situation – more customers, but less profitability. A typical response is to increase charge-out rates. But try pitching that to clients facing harsh market conditions and mandates to cut existing costs. As a result, the professional service firm discovers that it has outgrown its processes and operating procedures. And without effective and integrated processes in their business systems, professional services firms lose their competitiveness not to mention any opportunities for growth and expansion.

PSA enhances the ability to deliver a higher level of service and do so more productively and at lesser rates than competitors. This provides a clear advantage especially in an environment where clients are seeking lower costs for their outsourced professional services work or more outcomes from existing budgets.

In contrast to the rich human resources and centralised information systems used by larger professional services firms, smaller companies have limited numbers of staff and sometimes isolated data in different systems. Staff will often spend hours keying customer information into one system and updating contact details in another. As a result, employees ‘waste’ time on consolidating and correcting important information.

Having streamlined and automated processes, smaller firms are able to free up employees from tedious admin tasks and make better use of their time, knowledge and creativity. It not only slashes the unnecessary time on admin work, but also helps elevate team motivation and performance.

A centralised system reduces human error and keeps information up to date all times. Everyone in the firm can browse the job status at any time, be aware of the next steps and know who is responsible for what.

Apart from improving client service PSA also provides greater visibility into the business side of a professional services firm. Business owners are able to get real-time information, monitor the operation of the company and respond quickly to business opportunities. In fact, being flexible and adaptive is one of the advantages of smaller professional services firms to win business against larger competitors.

Despite of the benefits of PSA, in reality, professional services firms are only starting to look at the benefits of automating their business processes when assessing new software. Often it is assumed that process-driven business software is simply not affordable.

It is true that the upfront cost and licensing of PSA solutions can be more expensive than standard accounting software. However, accounting software is unable to provide the level of transparency and process management that a PSA solution can do.

Professional services firms should look at the ROI and the potential for business growth that PSA can provide. A good PSA system can handle far more requests from clients than manual processes with less staff. It gives professional services firms peace of mind when opportunities emerge. They become more confident they can grasp the opportunity and grow the business instead of worrying about their limited resources.

In order to take the advantage of this new technology, professional services firms should find a solution that integrates the process with accounting and build the business on a single platform.

The advantages of PSA for smaller professional services firms are obvious – it maxmises productivity and profitability with minimum resources by involving new processes, templates, reporting formats, metrics, and tools. It eliminates repetitive, manual, and tedious tasks allowing professional and support staff to focus on more interesting work that may also be able to be billed at higher rates. It streamlines project related business processes. The net result is that clients can be serviced more efficiently and information flows productively within the company.

PSA can be used to drive internal business processes as well as create the workflow management to turnaround assignments faster and more accurately. It creates high productivity gains and stronger outcomes for clients. It also provides insight and forecasting for sales, marketing, and customer service. PSA creates a competitive edge.

Paul K. Berger is Managing Director at Australian owned business software company Happen Business.

About Happen Business

Happen Business is an Australian owned business software company established in 2001 to fill a growing need in the market for a comprehensive integrated accounting and business workflow software solution. The company has rapidly established a strong following for its Jim2® Business Engine software and now has an extensive customer base in diverse industries such as IT, Photocopiers, Importing, Distribution, Sales, Service, Specialised Retailing and Manufacturing. For more information, go to www.happen.biz.