How to Design a Professional Services Automation Software Integration Architecture


  • Professional Services Automation software provides the process automation and information reporting to improve resource management, project outcomes, customer satisfaction and financial margins.
  • The most effective use of Professional Services Automation (PSA) software lies at the intersection of CRM, ERP and HCM applications.
  • PSA technology streamlines and automates the bid to bill project lifecycle which accelerates sales velocity, improves resource utilization, captures time and expense, automates invoicing, and most importantly improves on-time and on-quality project delivery and profitability.
Johnny Grow Revenue Growth Consulting

Fragmented or disintegrated business systems are the Achilles heal of professional service firms. They create islands of information, degrade cross departmental business process automation and make enterprise-wide reporting very difficult.

When professional service organizations acquire business software systems in a piece meal approach, and not pursuant to an IT strategy that plans a holistic services technology portfolio, integrating the applications is crucial to user productivity, project management, process automation and information reporting.

PSA Integration Points

PSA software is the core business application for professional service firms. It manages the services lifecycle, including advancing the sale opportunity, solutioning the effort, quoting the work, scheduling the work, resourcing the project, managing the project to budget and plan, billing for time, and ensuring client satisfaction.

However, PSA software doesn’t work alone. While it's the project system of record, it needs customer data from the customer system of record (CRM system), resource data from the employee system of record (HCM system) and financial data from the financial system of record (ERP system). A good IT strategy leverages each business application for what it does best, and shares data across systems for user productivity and information accessibility.

PSA Integration Architecture

See a Professional Services Automation (PSA) software architecture that delivers end to end business process automation for professional service firms.

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Customer Relationship Management

The CRM software will transfer customer information to the PSA system, including company firmographics, contact or project team member demographics, sale opportunity data (i.e., account, project type or solution, probability, territory), updates to sale opportunities (i.e., changes to forecast probability or close date) and transactions such as quotes. Rather than transfer everything, the CRM system will push only information that is relative to the project or contract.

CRM manages the services sale opportunity through closure. The sales pipeline is the demand plan to which PSA software must align resource capacity. When customer demand is dynamically linked with staff capacity, the services firm reduces project delays, sudden hiring or reliance on contractors. After PSA performs the solutioning and quantifies the resources needed, the cost estimate may be passed back to the CRM system.

Alternatively, some service companies such as Architecture, Engineering and Construction (AEC) or those that include complex products or solutions may use Configure-Price-Quote (CPQ) software to create the estimate and quote in CRM, and then pass it to the services system.

Marketing Automation

CRM is the conduit between Marketing Automation Software (MAS) and PSA software.

It may not be obvious at first, but workforce optimization starts with marketing automation. Nothing zaps profitability like billable resources on the bench. For steady resource utilization, we need a continuous and predictable pipeline of new customers and projects to keep delivery resources fully utilized.

Otherwise, peak demand creates resource shortages, which can delay projects or possibly result in project quality challenges, while lulls in demand keep resources on the bench for extended periods.

While CRM shows demand forecasts for this quarter and next, the marketing automation software shows the volume of leads earlier in the pipeline so it can forecast demand beyond next quarter. This visibility grants services companies the lead time needed to increase demand now for future period resource optimization.

Project data from PSA can also be used to create more customer intelligence in the CRM system and refine the Ideal Customer Profile (ICP) used by the MAS. The allows marketing to apply more precise customer segmentation to deliver more personalized engagement to existing customers and more refined precision campaigns to new customers. The financial data from PSA and ERP systems can calculate Customer Lifetime Value (CLV) in the CRM system and be used by the MAS to identify campaigns to increase client share.

Enterprise Resource Planning

ERP software manages back office transaction processing for projects. This may include timesheet to invoice generation, invoice approval processing, cash receipts processing, credit memo creation and any financial adjustments or write-offs. Financial transactions are created in ERP but should be visible at the PSA project record.

Depending upon the PSA system, approval processing may be performed in either PSA or the ERP application. A few PSA systems may perform the invoice process, but subsequent collections are done in the ERP system.

ERP software also manages the customer's financial terms such as credit limit, available credit, retainer and payment terms and makes this information visible at the customer record in the CRM system and the project profile record in the PSA system.

Project-based financial reporting is created in the ERP system and made visible at the project record in the PSA application. This reporting includes but is not limited to days sales outstanding (DSO), accounts receivable aging, actual versus budget variance reporting, project profitability and balanced scorecard reporting.

The ERP application manages accounting policies. For example, ERP may ensure project invoices are accurate by conforming to client contract or purchase order specifications.

It will also enforce proper accounting treatment pursuant to GAAP or IFRS. Some common examples include revenue recognition or converting unbilled time to a work in process (WIP) account (i.e., unbilled time creates a debit for WIP and a credit for accrued revenue which permits interim project margin reporting and accurate period-end financial statements.)

A few modern ERP systems integrate with PSA software to perform demand-based sensitivity analysis and calculate strategic pricing to increase revenues.

Human Capital Management

HCM software works with PSA to put the people with the right skills on the right projects at the right time.

HCM applications manage HR data such as employee demographics, compensation, capabilities (skills, certifications) and career planning.

PSA systems integrate with HCM software to retrieve staff data needed for project planning and scheduling. That data includes things like staff skills, location and availability.

Employee availability is the most dynamic and must consider staff time allocation among multiple projects, time-off requests (i.e., PTO) and current project roll-off dates.

The PSA scheduling in turn provides HCM systems information such as the most in-demand skills and when to ramp up recruiting efforts and make hiring decisions.

PSA Integration is a Precursor to Services Excellence

Service firms cannot operate well or scale with fragmented systems and data siloes. Sales and services delivery must be able to share data and collaborate in real-time to function as an orchestrated company and satisfy demanding clients.

With integrated business information systems, service providers gain both a 360-degree customer and project view, and achieve higher productivity, faster business process cycles and overall higher performance.