Why Professional Services Automation Software Implementations Fail – and How to do Better
- Professional Services Automation software is the flagship business application for professional service firms.
- It improves project solutioning, facilitates consistent execution and delivers real-time visibility into project performance and profitability.
- However, like all enterprise software applications, implementation success is not assured. Here are the top 5 reasons PSA implementations fail, and the insights that show how not to.
The Top 5 Reasons for PSA Implementation Failure
Professional services automation (PSA) software is the core business application for the professional services industry. It's a purpose-built alternative to a collection of generalized applications and brings industry specific methods, metrics and best practices to business processes such as project planning, project management, resource allocation, time collection, invoicing and information reporting.
While PSA benefits and payback are well understood, the challenges and risks of implementing PSA software are less recognized. Exposing these risks enables proactive mitigation. From first experience implementing these applications for almost two decades, below are the top 5 reasons for PSA failures.
PSA objectives are not business outcomes that matter
A pervasive scenario that leads to failure is the pursuit of technology goals instead of meaningful business results. Troubled projects frequently express their goals as software features, functions and capabilities instead of user, customer and business outcomes. This scenario is exacerbated when the implementation is regarded by users to be "an IT driven project."
Research results filtered from the PSA Benchmark Report show that the Best-in-Class (top 15 percent) professional service organizations pursue two overarching objectives of improved project quality and client satisfaction. These objectives in turn lead to the three business outcomes of i) increasing customer acquisitions, ii) growing customer share, and iii) improving customer retention.
PSA systems under-deliver when pursued as a technology effort. Most professional service firms don't have a top business priority of getting software to run correctly. So if your implementation goal is focused on little more than getting the software operational, or your objectives are expressed as software features and functions, it's probably more of an IT project than anything that will improve project quality, increase revenue from customers, decrease the costs to acquire, serve and retain them, or otherwise grow the business.
When PSA software fails to align with the company's top priorities, it struggles to gain executive sponsorship and user adoption, and is rarely sustainable.
PSA software drives efficiency but not effectiveness
PSA technology brings process automation to capture time and expense, streamlines invoice generation, performs cost accounting functions and calculates revenue recognition. Each of these time savers create efficiency, and while that's valuable, it is not as valuable as using the technology to improve project effectiveness and services delivery.
It takes a bit more effort but using this technology to improve resource optimization, team collaboration, services innovation and business intelligence will collectively improve project quality.
Many customers don't want to be handed finished services. They want to be part of the solutioning and final delivery. Using online project portals to co-execute with clients, enterprise social networks to collaborate with clients, or ideation forums to co-create with them will improve project quality and customer relationships.
Project efficiencies are needed but by themselves miss the bigger opportunity. Internal productivity is valuable, but it takes a back seat to improving project performance and client business outcomes.
PSA is fragmented and contributes to data and system duplication
A PSA application is designed to work in concert with Customer Relationship Management (CRM), Enterprise Resource Planning (ERP) and Human Capital Management (HCM) systems so that each application focuses on its core competency and the systems share data for cross departmental processes.
A common failure point occurs when the PSA system attempts to duplicate processes managed in other professional services systems. For example, if the system attempts to manage the services sale opportunity, either in place of or in tandem to the CRM software, the data is duplicated, and different managers may get different reporting for the same sale opportunity.
Similarly, if the PSA chooses to track HR data, such as skills, certifications or competencies which are generally managed in the HCM system, duplicate data and conflicting versions of the truth again occur.
Replicating processes in PSA software that should occur in other business applications creates redundant data, shadow systems, data integrity issues and inconsistent reporting. Worse, it creates trust concerns with users. The better approach is to begin with a PSA application architecture which defines how each business application is used for its intended purpose, how data is maintained in a single location and how data is shared where needed.
Poorly structured implementation
Ineffective software implementations, which are almost always driven by inexperienced project managers, are a top cited reason for PSA failures.
Research shows that inexperienced project leaders or project managers most often pursue a path that starts with imprecise goals. That is often followed with inaccurate planning that leads to unrealistic budgets and schedules and is then followed by random or chaotic execution.
Instead of using a proven implementation methodology that delivers systemic execution for repeatable results, failed deployments are often characterized as having a leader who attempts to figure it out as they go.
The most successful implementations have several things in common. They start with a focus on both the user and the client. These two roles are their North star.
They apply User Centered Design (UCD) principals to achieve a simple user interface (UI). They know the user experience (UX) is critical for user adoption and achieving a rewarding UX requires starting with goals stated in user terms, not software terms, and applying social technologies and intuitive navigation that align with the users preferred workflows.
They redesign business processes where it makes sense. Put another way, they don't replicate old processes in a new system, a common mistake that is often referred to as repaving the cow path. Good software can't help bad processes.
They apply best practices to prevent reinventing the wheel and repeating common mistakes.
Most of all, they are user centric, metrics driven, and outcomes measured. When they don't achieve forecasted results on the first try, they iterate until they do.
Underwhelming information reporting
PSA systems capture lots of client and project data. However, if that data is not converted into useful information, users will soon recognize the value is not worth the effort, participation will decline, and the system will not be sustainable.
Two information reporting obstacles stand out. First, pretty much all PSA out of the box reporting is static and historical. However, these systems leverage machine learning and AI to assemble data into forward-looking and predictive analytics that can flag performance deviations, under-performing projects or projects at risk. It takes a bit more effort, but information foresight is far more valuable than information hindsight.
Second, too many dashboards are all sizzle. However, with a few adjustments you can make the information more actionable by putting it in context. Performance metrics should display alongside budget or target goals for real-time results measurement, show trends for directional progress, and display project or industry benchmarks for context.
It's also helpful to rank and sequentially display performance measures to prioritize action.
Metrics are not all equal and should not be acted upon in random order. When you prioritize dashboard metrics by impact or time-based urgency, information changes from being merely interesting to emphasizing what needs to be done first, then next, and so on. Ranking metrics in dashboards aids prioritization, increases ease of use, creates routine, saves users time and makes information more actionable.
You can also make the information actionable with real-time alert notifications, next-best-actions, interactive analytics, drill-down analysis and links to Playbook plays or recommended actions.
Lastly, identify what types of information are most useful for each role. You will then have what you need to automatically distribute the right information to the right decision maker at the right time.