How to Assemble the Ideal Professional Services Technology Portfolio


  • Professional Services Automation (PSA) software is the flagship business application for professional service firms. It's a purpose-built alternative to a collection of generalized applications and brings industry specific support for business processes such as project planning, project management, staffing, time collection, invoicing and information reporting.
  • But PSA software is not a substitute for other mission critical professional service business applications.
  • The key to a successful enterprise software portfolio is to use each business application for its intended purpose and enable all apps to seamlessly share customer, resource and project data.
Johnny Grow Revenue Growth Consulting

Without a comprehensive information systems strategy, professional service organizations generally acquire business software systems in a piecemeal approach based on short term needs and not pursuant to a long-term strategy. This results in data siloes, fragmented applications, shadow systems, significant manual labor, exacerbated process cycles and an overall underutilization of technology.

Only when the professional services technology portfolio is designed holistically will firms achieve business process automation, closed loop information reporting, controlled scale and technology enablement that drives user productivity and business outcomes.

The below diagram shows a professional services technology portfolio with the business applications that facilitate end to end process orchestration, automation and reporting.

Professional Services Application Portfolio

See the 6 most important business software applications for professional service firms

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Marketing Automation

Marketing Automation Systems (MAS), also called Marketing Automation Platforms (MAP), are essential for professional service firms to achieve growth. These applications automate the six marketing processes of digital lead tracking, lead acquisition, lead scoring, nurture marketing, lead transfer to sales, and lead analytics.

Compared to most other industries where marketing efforts are almost entirely directed to new customer acquisitions, services companies more often bifurcate marketing campaigns between new client acquisitions and growing existing client share.

This is for several reasons. First, service organizations grow customer relationships to grow their most profitable business. Second, sales cycles and cost of sale are low when selling to existing clients and very high when selling to new clients.

Long, sophisticated and expensive sale cycles for new client acquisitions also shift the types of marketing methods and campaigns used by the most successful marketers. Research from the Marketing Transformation Report reveals that the Best-in-Class marketers (the top 15%) produce customer insights, precisely define their Ideal Customer Profile (ICP) and are most successful with Account-based Marketing (ABM) campaigns.

The most successful campaigns for increasing customer share and customer lifetime value (CLV) are nurture marketing campaigns, brand building and ABM programs.

Two additional factors where Best-in-Class marketers stand out from their lower performing peers is their adoption of lead lifecycle management programs and relentless pursuit of sales and marketing alignment.

The most popular marketing automation systems in the service industries are Adobe Experience Cloud (formerly Adobe Marketing Cloud) and Salesforce Marketing Cloud (formerly Pardot).


Customer Relationship Management

The CRM software most used capabilities for most industries are pipeline management and sales forecasting. While these capabilities are important for service firms, they're not the drivers. What makes CRM different for professional service organizations is an increased focus on customer relationships, greater emphasis on client upsell and team selling.

Customer relationships are aided with CRM strategic account plans and relationship plays. Unlike many other industries, service firms take a long view to acquiring and growing customer relationships. That why account plans define each long-term customer sales strategy. Account plans are built on customer intelligence, tailored to the customers business objectives or challenges, and generally show proposed actions over a year or longer.

Relationship plays are repeatable sales-driven business development methods that usually begin with low barrier offerings (i.e., assessments or workshops) and drive client expansion. They can be created as templates and then inserted to CRM Activity Management or Opportunity Management records for guided execution.

Service solutions are often complex and require expertise from multiple people. CRM software can facilitate team selling by centralizing and orchestrating sales win plans, activities, next steps and progress measurements. They also use enterprise social networks such as Salesforce Slack or Microsoft Teams to collaborate.

The most popular CRM systems in the services industry are Salesforce, Microsoft Dynamics 365, Deltek and SAP.


Human Capital Management

A services company is a people business.

Human Capital Management (HCM) software, which includes talent management software, manages the hire to retire life cycle, including recruiting, hiring, on-boarding, compensation management, performance management, employee development, succession management, payroll processing and human resource management. Each of these functions have a unique and magnified importance when people are your product.

It's common for service firms to outsource certain HCM functions such as payroll processing. However, it's never a good to outsource your competency so people-based processes that are part of your services delivery – such as hiring the right people, crafting performance plans that align with successful services delivery, and developing staff skills to meet client requirements – should be internally managed.

HCM applications use online portals for staff to enter time and expense, update their employee profiles, manage their career plans and view projects or jobs they are most interested. Several HCM systems use machine learning to create predictive analytics which detect or predict employee engagement and staff churn. This type of early warning system is extremely useful for increasing staff productivity and decreasing involuntary staff turnover.

For services firms with project or contract deliveries, HCM software will share data and process automation with PSA software for features such as tracking skills, certifications, scheduling availability and career progression.

Services firms invest more in HCM software than most other industries. The average service firm spends just over 2 percent of total revenue on recruiting and another 1.5-2% on training.

More often than not, service organizations choose the HCM software provided by their ERP software vendor. The most popular HCM systems in the services industry fall into two camps. ADP and Ceridian are the most utilized payroll providers. SAP (SuccessFactors), Workday, Ultimate Software and Microsoft Dynamics 365 are the most used HR and talent management systems.


Professional Services Automation

Professional Services Automation (PSA) software is the core business application for services organizations. It provides the automation and information to improve resource management, project outcomes, customer satisfaction and financial margins.

At a more tactical level, it facilitates time and expense capture to accelerate cash flow, aids resource management to increase staff utilization, calculates performance measures to detect deviations, monitors quality metrics to ensure service excellence and performs accounting functions such as calculating revenue recognition.

PSA resource management aids staff utilization by aligning the right people with the right skills to the right projects. A 360-degree project view gives project managers everything they need in one place, to save them time and increase their span of control. Mobility grants every team member collaboration and project visibility. The collective capabilities aid execution and oversight to deliver projects on time, on budget and on value.

The PSA software market is coalescing into platform ecosystems. FinancialForce, Kimble, Mavenlink and Krow are part of the Salesforce AppExchange ecosystem. Mavenlink is integrated with NetSuite and NetSuite is part of Oracle’s cloud.

The most popular PSA systems include Kimble and Projector for small business; Deltek, Financial Force (integrated with Salesforce), NetSuite (i.e. OpenAir) and Microsoft Dynamics 365 for the midmarket; and SAP for the largest companies.


Enterprise Resource Planning

Enterprise Resource Planning (ERP) software performs transaction processing for back office processes such as procure to pay, quote to cash and record to report. However, for service organizations ERP software must go further, by itself or integrated with PSA software, to convert time and expense entries into invoices, route invoices for review and approval, process project accounting entries and calculate revenue recognition.

Additional ERP capabilities needed for service firms include retainer management, unique billing schedules and arrangements, policy enforcement for time and expense, support for multiple types of contracts (i.e., time and materials, fixed fee, percent complete, not to exceed, milestone billings, cost plus and more) and revenue recognition rules for each type of contract.

Interim or provisional reporting is critical to spot project variances early and give project managers enough time to remedy shortfalls. That's why the better ERP systems can roll up unposted transactions, include sub-ledger journals not yet pushed to the General Ledger, calculate work in process (WIP) for uncollected or unbilled time, and produce project based financial statements before the end of the period.

ERP software for services evolved from project costing modules to include robust PSA capabilities. PSA software is increasingly evolving from a best of breed solution to become a part ERP software. ERP and PSA software have existed separately but are morphing.

The most popular ERP systems for service organizations include QuickBooks and Sage Intacct for small businesses, FinancialForce (for Salesforce users), Microsoft Dynamics and NetSuite for midsize businesses, and Deltek, Oracle and SAP for large companies.


Business Intelligence

Business intelligence tools for services firms include packaged and custom reports, project-based dashboards and predictive analytics.

The most common reports include demand forecasts, project actual versus budget comparison, project profit margin, balanced scorecard and financial forecasting.

Reporting is essential to bring real-time visibility to all aspects of the services lifecycle, quickly implement remediation actions when necessary and perform annual planning.

Predictive analytics help executives plan, budget and forecast the business. Dynamic models and conditional what-if scenarios are powerful tools to assess alternatives and identify the best plan.

Most companies will adopt the BI tools they already have with other applications (i.e., Tableau for Salesforce users or Power BI for Microsoft Dynamics 365 users.) The most popular BI systems are IBM Cognos, Microsoft Power BI, Oracle Hyperion, Salesforce Tableau and SAP Business Objects.