Acting as both salesperson and technical guru can prove to be a delicate balancing act. Consultants must not only create reasonable bids that reflect the accurate costs of implementing a solution, but they must also provide the client with evidence that their advice will result in a significant return on investment (ROI). This is especially true when your product or service is new to your client base.
To deal with that challenge, consultants Hans Dickson and Andrew Stokes calculate their bids by using an ROI spreadsheet for professional services automation (PSA) software implementations, which they’ve made available for free download on TechRepublic.
During the month of March, TechRepublic is running a series on how IT divisions can spend less but still fulfill their critical missions. This download provides a spreadsheet that may help consultants reveal the cost savings associated with implementing a PSA software solution. Visit our briefing center to learn more.
ROI spreadsheet provides selling point for software
Dickson and Stokes work with the Amey Group, a top-200 company based in the United Kingdom that provides outsourcing and support services. Recently, Amey Technology Services—the consulting and business solutions division of Amey plc—developed a value-added reseller (VAR) agreement with Account4, a provider of Web-based PSA software and the creator and host of an educational Web site about PSA.
Account4 and other PSA software providers have designed their products to provide cost-saving automated efficiencies in growing companies. For example, the Salt River Project (SRP), one of Arizona’s largest providers of electricity and water, has implemented a PSA solution to track current workloads and to forecast and plan future projects. The software allows the IT department to:
- Track details of its employee resources, including availability, skill level, and time worked.
- Track costs in real time as an aid in justifying project expenses.
- Optimize manager and employee resources.
“Instead of waiting for payroll to hit the financial system...you can see from day to day if people are entering their time sheets and you can track the amount of money spent on a project,” said Susan Bray, manager of IT business support services at SRP.
Download the PSA software ROI spreadsheet, in Excel format, to provide hard numbers to your clients about PSA software’s cost savings.
Educating the client
“The PSA market has really just opened up in Europe,” Dickson said. “The market is fairly immature. There isn’t really a huge user base, but there is an enormous amount of interest in the product and its capability.”
Because PSA software is new to most of their clients, Dickson and Stokes must provide “a business support approach rather than simply a software sell.” They have to include an educational component when consulting with potential clients, and the ROI spreadsheet calculates how long it will take for a PSA software solution to pay for itself.
“We put in the number of expected users for the solution, and then we ask [the client] what they think the average hourly cost per user is,” Dickson explained. “From those two basic calculations, we can then give them the initial outlay of investment, which we’ve broken down into license fees, consultancy fees, any expenses, and any ongoing maintenance.”
Dickson said that typically, clients who invest in PSA software could expect an ROI within three to six months, a timeline based on information from the Aberdeen Group, a technology-market consulting and research firm.
“[Our calculations are] based on a minimum of 3 percent uplift in utilization, and that is based on Aberdeen reports saying that this type of software is giving anywhere from 3 to 8 percent uplift in utilization.”
Do you have a similar spreadsheet, calculator, or form that helps your clients visualize savings? Would you like to share it with other TechRepublic members? Send us an e-mail or tell us about it below.