Technology and Software

Why PSA platforms will overtake ERP systems

Best-of-breed PSA gives service companies more flexibility and functionality at lower costs.

3 Mar 2020 | 1 min read
Andreas Agerlund Petersen
Journalist, Brand Manager and business aficionado. Andreas' long reads keep you updated on business optimization, project management, legislation and the PSA concept.

Professional services organisations must be highly efficient, responsive, productive and adaptable to get ahead in today’s extremely competitive market.

There is no room for postponing decisions or making mistakes.

Automating repeatable business processes and manual, tedious tasks frees up the time to focus on more important, strategic business matters.

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Professional service companies using an automation platform experience:

  • A surge in productivity and efficiency
  • Greatly reduce human errors
  • Make educated strategic decisions.

 A recent SPI Research study concluded that companies that invested in a professional services automation solution achieved higher billing efficiency.

The question that companies are now faced with is not whether to automate work processes or not, but what kind of automation platform to use.

Which is better: ERP or PSA software?

As the global economy becomes increasingly project-oriented, the product-focused approach of ERP systems is no longer sufficient. 

The growing service sector and project-based industries seek solutions that address specific aspects of their business, such as

  • Resource management
  • Team collaboration
  • Remote work
  • Time tracking, budgeting and forecasting

For professional services organisations that exchange time and expertise for money, these are crucial elements that ERP systems typically do not cover, but professional services automation solutions do.

That is why PSA software is often considered as an ERP system for service companies.

Pitfalls of big ERP systems

ERP systems were designed with the manufacturing industry in mind, originally providing solutions for product-centric businesses, built on a single platform.

As the big ERP systems are built to support a wide range of demands from the production industry, they fail to support the unique demands of professional service companies.

Service companies mostly work in the form of projects in an environment exposed to constant changes, and these projects are difficult to manage.

Generic ERP platforms struggle to meet the needs of advisors

Service companies seldom work with all the clients on the same type of contract, usually, they operate within a complex world of billing methods. Sometimes even combining different billing methods for parts of a single project.

Learn more about automated project invoicing!

ERP systems are too generic to handle this complexity and too rigid to be easily modifiable to fit the specific needs of a service company.

The one-size-fits-all method fails to paint a clear picture of which projects are profitable, and it makes revenue recognition and maintaining a steady cash flow difficult.

Due to the complexity of ERP systems, custom programming comes at high costs, as do the initial set-up and maintenance.

High complexity provides a steep learning curve

Traditional ERP systems have a steep learning curve and poor user experience, which hinder their implementation success and delay their results.

As companies buy into these systems implementation often stall because employees struggle to make the ERP fit their needs.

Project managers are forced to work in a traditional account-based setup instead of working in a dedicated project environment. As the ERP remains inflexible they struggle to adapt and to manage their projects.

ERP also don't facilitate collaboration between project members and they don't support the need to place the right resources on the right projects at the right time.

Best-of-breed PSA platform is the best solution

Tracking time and expenses, resource management, budgeting and forecasting, invoicing and analysing profitability are equally important elements for managing project-centric businesses.

Best-of-breed PSA software brings all these aspects together in a way that gives plenty of flexibility.

Cloud-based business applications are designed to easily integrate with other systems, so it has become simpler, faster and much less expensive to implement tools from multiple providers under one roof.

Click here to see our sample offer!

 Best-of-breed PSA software increases agility for professional services organisations

With the best-of-breed approach, companies have the freedom to customise and switch between tools in a way that is closely aligned with their specific requirements – as often as needed, without disturbing the whole business. They can choose tools that are designed specifically for their industries or integrate with the applications that their teams are already familiar with.

PSA software is a great way to reduce the inefficiencies of generic systems that lack specific features.

With cloud-based PSA software, project members can access the project’s process from any geographical location. This facilitates team collaboration even when people are out-of-office, and it assures that no information is lost.

Professional services organisations need to be agile and adaptable, always prepared to react quickly and to change as they grow. Their automation system should reflect that, and be built around their needs, not the other way around. The best-of-breed approach gives the far greatest flexibility, functionality and user satisfaction at a much lower cost.

How can TimeLog help optimise business processes specific for professional services organisations?

Features of TimeLog support your business processes and help you control your finances.

  • With TimeLog, you get a complete overview of the project’s progress and its invoicing potential.
  • Easy-to-use time tracking feature ensures that no billable hours are lost.
  • Automated project invoicing saves time for both the project manager and the bookkeeper.
  • It is a strong project management tool, that gives you command over resource scheduling and lets you handle complex contracts on your projects (up to eight different contract types and an unlimited number of sub-contracts on a project).
  • TimeLog also lets you seamlessly connect with other business systems and applications.
Click here to see our sample offer!