Editor’s note: This article appears on TechRepublic under special arrangement with PSASoftware.com, a Web site run by Account4, a PSA software vendor.

If you are considering a Professional Services Automation (PSA) solution, you are not alone. In fact, a TechRepublic survey that appeared on CIO Republic showed that 21 percent of respondents named PSA as their primary area of interest among enterprise applications. This was third to only ERP and CRM solutions.

The PSA market emerged from its infancy strong and is off and running—with over 30 vendors serving the space and hundreds of organizations already successfully implemented. As a whole, PSA applications are beginning to mature, but the bad news is that the market is still so dynamic that weeding out the viable solutions from the crowd can be challenging.

Amey plc, a U.K.-based professional services firm, recently completed a PSA product search and implementation. While the process of identifying, evaluating, recommending, and selecting a system that will fit your needs may be long and somewhat difficult, we identified five key steps you should take to find the product that best fits your needs and maximize the chances your implementation will succeed. They are:

  1. Assess your needs
  2. Secure management buy-in
  3. Define your requirements
  4. Perform your due diligence
  5. Check your gut

First of two parts

This is the first of a two-part series, originally published on the PSASoftware Web site as “Five Keys to PSA selection success.” The second half of this series will discuss what you want a PSA solution to do and cover due diligence when choosing PSA software.

Assessing your needs
What is PSA?
Start by educating yourself. Even if you employ a consultant to help with your search, it is just as important to be as knowledgeable about your subject as your consulting partner. The benefits are obvious, and you’ll improve your chances of success.

There are many reports, Web sites, and articles that will help you get a better understanding of what PSA is and the core business processes that it can help you manage.

Try to find out as much as possible about PSA and the various application areas that it covers. You may be surprised at the breadth of many of the solutions on the market. For many organizations, PSA offers the perfect combination, and for others, only a subset of the functionality may be needed.

Share your findings with others
Talk to managers from various departments to determine what systems may already be in place, if product searches are under way, and if a need exists for improving processes such as:

  • Service requests and prioritization
  • Contact and opportunity management
  • Workforce optimization
  • Work/project management
  • Time and expense reporting
  • Billing, chargebacks, or project accounting

Share what you learn about the benefits of PSA. Groups that benefit from PSA, and should be considered from the start, include: customers, sales/marketing, IT development, consultants, and accounting/financial. The power of PSA lies in your organization’s ability to share information at various stages of the service-delivery process.

Securing management buy-in
Return on investment analysis
To make the case for a purchase in these tough economic times, you’ll need a solid understanding of the return on investment (ROI) a solution could offer. With the help of Account4, Inc., Amey was able to quickly determine what the immediate economic impact would be by using two tools, available online:

Using these two computational tools, Amey was able to immediately understand what the difference in workforce utilization would be using PSA. Additionally, the analysis spreadsheet allowed us to quickly assess the period of time in which our ROI would be achieved. Both calculation tools made the time invested in this step very low.

Other factors to consider when determining the total economic benefit of a PSA solution might also include those listed in Figure A.
Figure A

Increased cash flow PSA enables PSOs to reduce their billing cycle with online (and often Web-based) time and expense reporting.
Low cost of ownership The Internet-based PSA solutions tend to minimize the costs associated with deploying, maintaining, and upgrading the application.
Reduced operating costs The main benefit of automating previously manual processes
Greater profitability A bird’s eye view of your service opportunity pipeline helps you to determine which projects and customers represent the greatest margins.

Make vs. buy
This analysis is unavoidable if you are an IT service provider. What you are likely to find, at this stage of the PSA market life, is that there are many solutions to choose from—one of which probably suits your needs.

These products will probably come at a cost lower than you can afford to build yourselves. Additionally, some product vendors have extensive industry experience and have incorporated the best practices of leading PSO’s and IT departments in their products. This is good news for those of you that fit this profile. Even if your requirements differ significantly from available “out-of-the-box” functionality, a flexible product that can be tailored may give you a head start.

Executive sponsorship
This executive support will be the key to your implementation success. Management support is what drives the implementation through all of the difficult design meetings and keeps the organization on track as you manage the implementation and acceptance of your PSA solution.

Bring your management team on board early by showing them the economic benefits of a PSA solution.

Have you selected PSA software?

What other advice would you add to what we’ve included? Send your comments to us or start a discussion.