Preface

<< Continued from Page 1

Some of the unique requirements for PSORGs are dictated by whether their projects are for cost centers or profit centers. The focus of internal groups, like most IT departments, are Internal clients, and could involve R&D, product design, software development, and engineering etcetera. The projects and services implemented for these types of clients are typically based on corporate budgetary constraints and are therefore usually considered non-billable work. External paying customers usually relate to a profit center, and the work done for them is typically billable. Most PSORGs deal with billable work and focus on implementing projects and services for external clients

Very few PSORGs efficiently deliver their projects or services. Due to increased industry complexities and inefficient corporate processes, service workers are not focusing on their key responsibilities. Instead, they are being bombarded with increasing amounts of administrative tasks, technology issues, unmanageable workloads, and either lack of useful information, or are overwhelmed by useless detail. There is a great need and an increasing demand for software applications to make PSORGs more productive and more profitable. PSA applications, or the many other similar acronyms, describe a set of software solutions that have been designed to achieve such a goal. 

PSORGs are ridden with inefficient processes and unstructured behavior. Resources are not utilized at their optimal capacities, collaboration is less then ideal, billing cycles are lengthy, project status is based on outdated information and project costs are not managed or known with certainty; all of which leads to a less than productive organization and decreased profitability. PSA solutions address these inefficiencies much like generic ERP solutions address the business processes within manufacturing organizations.

As a rising number of organizations operate under project and service oriented methods, establishing a streamlined and more productive approach to their core business processes is no longer optional and a nice to have, it is a necessity. PSA solutions and PSA vendors are therefore addressing this need by leveraging, complementing, and enhancing the best features of Customer Relationship Management (CRM), Human Resource (HR), Project Management, Accounting, and ERP systems in order to deliver an integrated approach to increasing service efficiency.

The core processes that are found within most project and service engagements can be summarized in the following five-step process:

1. Manage and report demand
2. Schedule and plan
3. Track and charge actuals
4. Collaborate and Analyze
5. Integrate

These five steps can be further broken down into several core business processes:

The process of:

• Managing demand for projects or services
• Searching for, assigning and scheduling resources
• Managing projects
• Tracking work actuals
• Billing or charge back 
• Acquiring knowledge, collaboration and communication
• Requests and other process workflows
• Purchase requisitions
• Integration
• Reporting and analysis

PSORGs have traditionally been inconsistent in evaluating their performance metrics. Are billing rates used in an optimal way? Can project costs be managed more effectively? Are resources used effectively? Can billing cycles be shortened to reduce A/R and increase cash flow? The challenge for PSA solutions is to provide functionality that delivers identifiable and measurable results to these organizations.

The return on investment for PSA solutions can be impressive and is usually realized in a short period of time. Measurable PSA results are often realized more quickly than those obtained from implementing traditional ERP systems. Some of the key measurable concepts associated with implementing a PSA solution are: 

• More efficient client invoicing, thus reducing A/R and increasing cash flow
• Improved resource utilization, productivity and efficiency
• Accurate revenue recognition methods
• Efficiently tracking project costs for R&D or capitalization purposes 
• Improved reporting & analysis capabilities leading to more effective decision making

All organizations can benefit from automating their basic business processes by implementing PSAs. To gain the full benefit from their installation, it is likely that a PSORG will have to evaluate its internal processes . Before evaluating external software, an organization needs to ensure that its internal business processes receive fine-tuning. 

An evaluation of a PSA solution should not be focused on its features alone. The product’s technology is certainly a crucial factor in determining how effective, in terms of both usability and costs, the solution will be. For example, is the solution offered with Web capabilities? Are integrations and customizations efficient and cost effective? Does the vendor provide an SDK/API in order to ensure a more efficient method of developing enhancements to the product? What databases does the vendor support? Addressing technology questions are a key focus in a PSA evaluation that will lead to a better-informed decision.

Each type of PSA solution has its own strengths and limitations. One solution is not necessarily better than any other. However, there are certainly those that shine in specific areas. Determining which areas are important to your business is key in selecting the most effective solution. In addition, evaluating all benefits, costs, and corporate risks associated in implementing a PSA solution is crucial. (Please refer to Appendix B - PSA RFP Template, for a template Request For Proposal that can be used when searching for a PSA solution.). Ensuring that your organization has effective processes already in place will assist in implementing a PSA solution and getting the highest return on investment. Enterprise software solutions are much more effective when the organization’s business methodologies and practices are well thought out. Many PSA vendors can provide assistance in the required business analysis and restructuring methodologies that can improve internal processes to benefit the most from mechanized solutions.

We would love to hear your feedback, questions and comments on this book. Please email us at feedback@psabook.com.

© 2002-2007 PSA Book.com Associates. All rights reserved.  
Privacy Statement | Terms of Use