How to Build a Strategic Resource Plan Without the Manual Lift of Spreadsheets

Whether you’re still working with spreadsheets or beginning to explore new strategies, this ebook has something for you. We break down complex concepts into simple, actionable steps, offering valuable insights to enhance your competitiveness and drive long-term success.

The right Resource Management software has the power to transform your professional services firm, from streamlining workflows to boosting project profitability (and everything in between). 

While these benefits are extremely desirable, the hunt for the best Resource Management software is less than. Many tend to delay the search because of how stressful and time-consuming it can be. You want to make sure that you’re making the right choice for your organization and that internal stakeholders agree. 

We created this Resource Management software buyer’s guide to help speed up this process, win stakeholders’ support, and leave you feeling confident in your final decision.

What we’ll cover in this guide: 

• Why professional services firms should invest in Resource Management software
• The key features to look for in Resource Management software
• How to choose the best Resource Management software
• The right question to ask software vendors

4 Vital Signs It’s Time to Invest in Resource Management Software 

Do these pain points sound all too familiar? 

1. My resource decisions often cause issues in project teams by mismatching skills and assignments. This usually impacts project completion, client satisfaction, and profitability.

What this commonly feels like: 

• Data fragmentation hurts profits
• You can’t use past projects to set future prices
• Unforeseen conflicts cause project delays
• Your projections have blind spots
• You don’t know how to link utilization to profitability

2. My organization lacks visibility because we don’t have a single source of truth that gathers all information in one place.

What this commonly feels like: 

• You have time off requests, time tracking, finances, and more spread across different tools
• Pulling data together is a manual, time-consuming, and error-prone task for you
• Your staffing decisions are not working out as you expected
• You’re not sure if you have the right reports to run your business

3. It’s hard for me to accurately plan and balance resources for projects without real-time reporting.

What this commonly feels like: 

• You’re unsure if you can take on more work right now
• You can rarely forecast more than four weeks out
• Manual workflows and old data slow down your business
• Your visibility depends on who provides the data
• You can’t model future project scenarios, limiting your ability to choose the most profitable path

4. Not knowing how to distribute resources negatively impacts my staff.

What this commonly feels like: 

• Your team frequently gets assigned to projects that don’t align with their skills
• You struggle to view employee skill sets in a usable format
• Capacity planning is often a challenge
• You’re unsure if you can take on new projects 

Benefits of Resource Management Software

Excel Could Be Holding You Back

The professional services industry is not just about keeping up —  it’s about thriving, being productive, and wowing clients with impressive results. While traditional tools like Excel have been used for managing different aspects of services organization, they come with their fair share of limitations when it comes to scaling a consulting business:

• Scattered data and a lack of collaboration make it hard to keep a clear view of resources and hours spent on a project.
• Managing workloads and availability becomes tricky without automation, leading to uneven distributions and potential employee burnout.
• Excel’s visualization challenges make it tough to analyze resource data, affecting decision-making and profitability.
• Manual data entry raises the risk of errors, potentially impacting client engagements. 

Level Up With Resource Management Software 

Resource Management software offers a streamlined solution, addressing these challenges with real-time insights, efficient collaboration, and strategic resource allocation for increased productivity and profitability. 

If there’s any hesitation to ditch Excel, share with stakeholders the following benefits of Resource Management software:

Before: Bad Resource Decisions Affect Project Success

With Resource Management Software:

Streamlined Decision-Making: Managers are able to make data-driven decisions seamlessly during planning meetings with Resource Management software. This eliminates the need to spend valuable time searching for relevant information, enabling quicker and more informed choices.

Efficient Resource Allocation: Users can efficiently plan resource allocation based on demand. The software allows firms to adjust what skilled employees are assigned to a job on the fly. This proactive approach helps prevent overutilization or underutilization, ensuring that resources are optimally utilized.

Real-Time Monitoring and Optimization: Resource Management software users can quickly identify deviations from the plan. Live data provides a comprehensive view of project progress, allowing for immediate adjustments and optimization of resource allocation. This approach ensures that projects stay on track and resources are aligned with evolving project needs.

Before: Company Confusion from Lack of Central Information

With Resource Management Software:

Centralized Information Hub: You’re provided with a centralized platform that consolidates all the information needed to plan a team’s workload in one place. This eliminates the need to navigate multiple sources, ensuring easy access to crucial data for efficient decision-making.

Comprehensive Data Integration: The system combines various data elements, including employee experience, skills, time-offs, public holidays, uncertain projects, and contract capacity. This holistic approach to data integration sets it apart from other resource planning tools, providing users with a comprehensive overview to inform resource allocation decisions.

Advanced Scheduling Options: Resource Management software offers advanced scheduling options, allowing customers to make precise people allocations. This results in fewer schedule conflicts, minimizes overallocations, and ultimately contributes to improved project profitability. The ability to optimize resource allocation based on a comprehensive dataset leads to smoother project workflows and better overall resource utilization.

Before: Planning Project Resources is Difficult Without Real-Time Reporting

With Resource Management Software:

Instant Access to Essential Reports: With Resource Management software, managers can access crucial reports instantly. This not only reduces administrative work but also provides greater insights into project execution. Up-to-the-minute reporting empowers managers with up-to-date information, allowing for quicker and more informed decision-making.

Longer-Term Planning Capability: Users can create longer-term plans, leading to a better understanding of resource allocation for billable activities. This capability promotes more balanced project execution and facilitates the efficient scaling of the company. Long-term planning ensures that resources are allocated strategically, aligning with the overall goals of the organization.

Scenario Modeling for Informed Decision-Making: Firms can model different scenarios for demand. This feature of the software aids in more informed decision-making regarding the resources required to fulfill upcoming projects. This is important if your staff has varied internal rates — you don’t need overqualified resources performing certain tasks. By simulating various scenarios, organizations can proactively plan for changes in demand, ensuring that resources are allocated optimally to meet project requirements.

Before: Staff Suffers from a Limited Understanding of Resource Distribution

With Resource Management Software:

Comprehensive Information for Streamlined Processes: Resource Management software provides comprehensive information on resource distribution, streamlining internal processes within the organization. The availability of detailed data ensures that staff members have a clear understanding of how resources are distributed and utilized across various projects.

Informing Employee Development Strategies: An employee bench is unavoidable, but a smart organization manages its bench time by measuring allocations vs capacity. By having insights into your employee bench, as well as the allocation of resources, organizations can make informed decisions about training, skill development, and talent management. 

How to Choose the Best Resource Management Solution for Your Professional Services Business

Weighing all your options can seem overwhelming in such an expansive market. However, the more research and vendors you look at, the more you’ll come to find out, there’s one ideal solution for you. Of course, that’s easier said than done. 

Once you’ve gathered a list of 3-5 resource management tools you like, use discovery calls with each provider to discuss your basic needs. Consider how different stakeholders in your firm, such as Owners, Operations, Finance, and Project Managers, currently handle processes and what challenges they face. 

Focus on your requirements rather than the ideal preferences for each stakeholder during these conversations. It’s important to make sure they have all the needed and necessary features that your organization can benefit from before you take any next steps in the decision process. 

5 Key Features of Resource Management Software to Look For

Shared below are the 5 features that should be non-negotiables in a resource management solution as well as why. Additionally, we’ve included the key questions to ask vendors during your discovery calls, specific components to look for within those key features, and what internal stakeholders should be part of those discussions. 

1. Demand and Resource Planning  

Effective demand and resource planning means you’re allocating the right people at the right time to the right project. Anticipating project needs allows for strategic planning of roles, offering flexibility in choosing specific team members later. This simplifies decision-making and optimizes resource use. 

The ability to outline a project’s timeline through demand planning aids managers in informed personnel allocation decisions. This visibility enables accurate project estimates and quotes, maximizing revenue potential while ensuring project profitability from the early planning stages.

Who to include: Operations, Project Managers

What to look for:

• Capability to filter and locate resources based on role, skill, team, specific tags, and other criteria.
• Ability to view the entire team’s workload on one screen using an availability heat map for a visual representation, reducing underutilization or overutilization
• Real-time visibility into resource availability, workload, current assignments, and upcoming PTO for informed decision-making.
• An intuitive and user-friendly interface for easy navigation and efficient allocation.
• Flexibility in configuring workflows to match the unique needs and processes of different projects or teams.

Questions to ask:

• Can I easily see when resources are available for current and future projects?
• Does the software show me the skills and costs of resources so that I can plan for the most profitable resource allocation?
• Is the information about resource allocation updated live for quick decision-making?
• How do I prioritize tasks and projects to ensure critical assignments get the right resources?

2. Skills Management 

Assigning resources to projects based on their skill sets is a strategic approach that boosts project outcomes and employee satisfaction. By aligning individual expertise with project requirements, organizations ensure precision and efficiency. This practice enhances the quality of deliverables and cultivates a positive work environment, valuing employees for their unique contributions. 

Who to include: Operations, Project Managers

What to look for:

• Visibility into the availability of resources based on their skill sets, updated in real-time.
• Ability to profile and categorize the skills, experience, and language proficiency of each team member within the system.
• Capability to automate the assignment of tasks or projects to team members based on their skill sets.
• Tools for creating and implementing skill development plans to enhance the capabilities of team members.

Questions to ask:

• How do I ensure the most appropriately qualified staff is assigned to each task or project based on their skills and availability?
• Is there a search feature that allows project managers to find resources based on their specific skills?
• Can tasks or projects be automatically assigned to team members based on their skill sets?
• How does the software monitor and track the development and utilization of skills over time?

3. Time-Off Management

Time-off management is crucial for organizations, helping with informed decision-making when employees request leave. By assessing its potential impact on team workloads and project schedules, it contributes to overall project profitability. This approach also prevents project delays, enhances client satisfaction, and enables managers to strategically plan approvals, minimizing disruptions to ongoing projects.

Who to include: Operations, Project Managers

What to look for:

• Access to a centralized calendar for quick visibility into team members’ time-off status and availability.
• An intuitive request workflow that simplifies the submission, review, and approval process, streamlining communication between employees and managers.
• Reporting features to gain insights into time-off trends for better resource planning.

Questions to ask:

• Does the system send alerts about upcoming events to avoid schedule conflicts? 
• Can you set holidays to be location-based?
• Can you give managers specific user rights for reviews and approvals? 

4. Reporting 

Live reporting and analytics play a key role in managing resources and finances. They offer instant insights into resource use and project progress, aiding in prompt decision-making, efficient resource utilization, and enhanced future planning for better outcomes.

Who to include: Operations, Finance, Project Managers 

What to look for:

• Dashboards that provide an at-a-glance overview of resource utilization, project progress, and key performance indicators.
• Insights into time-tracking data, enabling analysis of time spent on tasks and projects for improved efficiency.
• Option to analyze historical data to identify trends, patterns, and areas for improvement in resource management practices.
• Reporting on financial aspects such as budget status, actual spending, and cost breakdowns related to resource management.

Questions to ask:

• Can the system generate customizable reports?
• How is project progress tracked in real-time, including milestones achieved, tasks completed, and remaining work?
• Are tools available for comparing forecasted data with actual performance to identify variances and improve future planning?
• Are metrics available related to individual and team performance, aiding in performance evaluation and skill development?

5. Financial Planning 

Financial forecasting in Resource Management software is essential for clear insights into expected costs tied to resource use. It aids in effective budget planning, reducing the risk of unforeseen financial challenges. This forecasting empowers proactive decision-making in resource allocation, ensuring efficiency and cost-effectiveness in project execution. Overall, it plays a vital role in strategic planning, preventing budget overruns, and promoting financial stability.

Who to include: Operations, Finance 

What to look for:

• Centralized financial data
• Ability to monitor and manage work in progress to make data-backed decisions.
• Capability to track and monitor expenses associated with resource utilization and project execution.
• Accurate estimation of costs related to resource usage, helping in budget planning and control.
• Recording and analyzing historical financial data related to resource management for trend analysis and continuous improvement.

Questions to ask:

• How do you ensure accurate estimation of costs related to resource usage for effective budget planning?
• Is financial data related to resource management displayed in real-time for immediate decision-making?

Other Things To Think About: Looking Beyond Product Features

Another important aspect to think about when going through your top picks for Resource Management software is what it takes to get it started at your organization. Keep in mind how easy the adoption and implementation process is. 

Additionally, assess the level of support from the software provider. As your organization scales, resource needs evolve. Ensure the software provider is committed to being a partner, working alongside you throughout this growth.

Choose a tool that fits your current needs and anticipates where your organization will be in the years ahead. Even the best solution may face challenges, so evaluate which vendor offers reliable support during scaling.

What else you should consider: 

• Training and onboarding: Evaluate available resources for a smooth start.
• Scalability: Ensure the software can accommodate growth.
• Support and maintenance: Consider ongoing support and updates.
• Integration capabilities: Check compatibility with existing tools and systems.
• Data security: Learn what measures the company takes to protect sensitive information.
• Customization options: Assess the level of adaptability to unique needs.
• User interface and experience: Consider the software’s user-friendliness.
• Cost and ROI: Analyze overall ownership costs and return on investment.
• Vendor reputation: Research the reputation of the software provider.
• Regulatory compliance: Ensure compliance with industry regulations.

Other questions to ask:

• How do we get started – phased or all at once?
• What help do we get for team onboarding?
• Is your support team in-house or outsourced?
• How secure is your platform, and why trust you with our data?
• Does your client base match our size and industry?
• How often do you update features?
• Do you listen to clients when making software changes? Can you give an example or reference?

PSA Software vs Resource Management Software

If you’re familiar with Professional Services Automation (PSA) software, you may be wondering how it’s different from Resource Management software and which one you need. The answer could be that you need both!

For businesses just starting their journey toward optimizing resource management, starting with specialized Resource Management software can be a smart move. However, as a business grows, it may need more than resource management. That’s where Professional Services Automation (PSA) software comes in. PSA software does everything from managing projects to handling invoices. While starting with Resource Management software gives immediate benefits, moving to PSA software is a progressive step forward. It helps businesses optimize their entire operation, unlocking more value. By gradually adding PSA features, businesses can adapt and stay competitive.

PSA Software 

What Makes it Great

PSA software is like a Swiss army knife for professional service organizations. Its main job is to help these organizations manage everything from start to finish. This includes things like project management, tracking time and expenses, sending out bills and invoices, and even keeping an eye on the budget. Basically, it’s there to make sure that everything runs smoothly and that the business makes as much money as possible.

Key Features

Project management tools: Help plan, execute, and wrap up projects.

Time and expense tracking: Keep tabs on how much time is spent on different tasks and how much out-of-pocket expenses are spent.

Billing and invoicing: Streamline the process of getting paid by clients.

Resource management: Assign the right people to the right projects based on their skills and availability.

Reporting and Analytics: Provide insights into how well the business is doing and help make smart decisions.

Resource Management Software

What Makes it Great

Resource Management software is all about making sure that the right people are in the right place at the right time. Its main goal is to use resources, like employees and equipment, as efficiently as possible to get the job done.

Key Features

Resource scheduling: Match up project needs with the availability of resources.

Skills tracking: Find the best person for each job based on their skills.

Capacity planning: Look ahead to see what resources will be needed for future projects.

Utilization tracking: Keep an eye on how efficiently resources are being used.

Forecasting: Predict when there might be too few or too many resources available.

Choosing between PSA software and Resource Management software depends on your current business needs and stage of growth.

If you’re primarily focused on optimizing resource allocation and planning, Resource Management software may be the right fit, offering targeted solutions for efficient resource utilization. However, as your business expands and requires more comprehensive management of projects, invoicing, and overall operations, transitioning to PSA software becomes advantageous. Ultimately, evaluating your current requirements and growth trajectory will help determine which software solution best aligns with your business objectives.

If you’re not already using PSA software to better manage your firm, does it sound like something you’re also interested in exploring? We have another buyer’s guide for that!

Choosing the Right Partner 

Picking the right Resource Management software for your professional services firm is an important decision. Our goal is that this guide will help you along the journey of finding the right vendor for you. We couldn’t end this article without touting BigTime’s resource management solution, BigTime Foresight. 

Foresight is changing how you can manage resources by ensuring balanced team workloads, confident scenario modeling, and cohesive team collaboration. With its comprehensive insights, it optimizes resource allocation for increased productivity and profitability.

Curious to see what Foresight can do for your firm? Feel free to reach out to us by emailing sales@bigtime.net or requesting a demo to see how we can help.

Summary 

This buyer’s guide explores crucial considerations when selecting Resource Management software for professional services firms. It outlines key features, benefits, and common challenges, emphasizing the limitations of traditional tools like Excel. 

This guide covers the transformative impact of Resource Management software and provides insights into choosing the right software, focusing on these most important features: 

• Demand and resource planning
• Skills management
• Time-off management 
• Reporting
• Financial planning 

Selecting the right Resource Management software for your professional services firm is an important choice. This guide serves as a valuable resource to assess your options and make an informed decision regarding the adoption of Resource Management software, aligning business goals with long-term strategic outcomes. 

Frequently Asked Questions About How to Choose the Best Resource Management Software

What are the major components of Resource Management software?

The major components of Resource Management software include skills management, time-off management, reporting, and financial planning, collectively contributing to streamlined processes and enhanced collaboration.

Why use Resource Management software?

Resource Management software is used to facilitate effective planning, allocation, and utilization of resources. Its purpose is to streamline processes, boost visibility, and maximize resource efficiency within an organization.

Which is the best Resource Management software?

Choosing the right Resource Management software for an organization depends on its unique needs and budget. Different software options vary in features and pricing, so it’s essential to research and compare them based on your specific requirements. It’s important to research different Resource Management software options available in the market to compare them.

Who uses Resource Management software?

Resource Management software is utilized by various professional services industries. These customers leverage the software to ensure efficient planning, allocation, and utilization of resources.

4 Metrics for Project Management

By focusing on all four of these project management metrics, firms can proactively identify areas of strength and weakness, allowing them to make necessary adjustments to stay ahead of the curve.

1. Revenue growth
2. Organizational profit
3. Client satisfaction 
4. Employee optimization 

Revenue Growth

Why You Should Track Revenue Growth

Assessing Project Effectiveness

Tracking revenue growth enables firms to assess the success and profitability of their projects. It serves as a key metric for evaluating project outcomes and identifying areas where improvements can be made to enhance project performance.

Competitiveness

Firms with steady revenue growth show they can attract new clients and identify opportunities, showcasing their adaptability and resilience in project delivery.

Diversification

Revenue growth often accompanies business expansion. Firms can diversify their income streams, enter new markets, and offer additional services. This diversification reduces the risk associated with relying heavily on a specific client segment or market.

How to Track Revenue Growth

Percentage of Bids Won

Maximizing bid success rates ensures a steady revenue stream, significantly contributing to overall organizational growth.

The table below shows the direct effect the percentage of bids won has on revenue growth for professional services firms. 

Sales Pipeline

A well-managed sales pipeline is crucial for measuring revenue growth, enabling the identification and securing of projects. Effective pipeline management ensures a steady flow of business opportunities, contributing to sustained revenue growth.

Regular Financial Analysis

Routinely review financial statements, including income statements, balance sheets, and profit and loss statements. These documents provide a historical perspective on revenue growth.

Growth Rate Calculation

Calculate growth rates using the formula: [(Current Period Revenue – Previous Period Revenue) / Previous Period Revenue] * 100. This formula quantifies the rate of revenue growth as a percentage.

Customer Acquisition Metrics

Keep a close eye on the number and value of new contracts or clients acquired. This data provides insights into the sources of revenue growth and the effectiveness of sales strategies.

Sales Funnel Analysis

Analyze the sales funnel to understand conversion rates at each stage. This reveals where potential revenue growth opportunities exist, whether it’s in lead generation, proposal conversion, or client retention.

Organizational Profit

Why You Should Track Organizational Profit 

Financial Health

Profit is a fundamental indicator of a company’s financial well-being. It shows whether the organization is generating more income than it spends, ensuring its sustainability and ability to have recurring project profitability.

Risk Mitigation

Monitoring profits provides a financial cushion that allows firms to weather unexpected challenges or economic downturns. It enables them to continue operations and investments, reducing vulnerability to outside factors.

Decision Making

Understanding profits helps in making informed decisions about investments, cost reductions, pricing strategies, and other aspects of the business that can impact financial performance.

How to Track Organizational Profit 

Employee Billable Utilization Rates

Boosting net profit requires a continuous focus on enhancing both employee billable utilization and the percentage of billable employees. Increasing these factors contributes significantly to improving overall profit margins, as shown in the table below. Learn more about utilization rates and how to measure them.

Profit Margin Calculation

Calculate profit margins to assess how much profit is generated for each dollar of revenue.

Financial Statements

Regularly review income statements and balance sheets to monitor profit trends and overall financial health.

Cost Analysis

Monitor cost structures to identify areas where expenses can be optimized, improving profit margins.

Client Satisfaction

Why You Should Track Client Satisfaction

Reputation and Loyalty

When clients are satisfied with project outcomes, it contributes to a positive reputation for the firm and fosters client loyalty. Satisfied clients are more likely to stay with the firm, trust its services, and be less price-sensitive and more willing to accept service expansions or upsells.

Referral Network

Happy clients can become valuable sources of referrals. Their recommendations can bring in new business, reducing client acquisition costs and contributing to organic growth.

Service Improvement

Client feedback and satisfaction surveys provide valuable insights into areas that require improvement, helping the firm enhance project quality and meet client expectations more effectively. 

In the table below, you can see how influential having referenceable clients is in achieving your annual revenue goals. 

How to Track Client Satisfaction

Post-Project Engagement Interviews 

Post-project engagement interviews offer a direct line to client feedback after project completion. These conversations drive continuous improvement, shaping service delivery and reinforcing the firm’s commitment to excellence

Client Retention and Referral Rates

Measure project management performance by analyzing client retention rates and the number of referrals received from existing clients. These are indicators of overall satisfaction and loyalty. 

Net Promoter Score (NPS)

NPS is a widely used metric that measures client loyalty. Clients are asked to rate their likelihood of recommending the firm to others on a scale of 0 to 10. Based on their responses, clients are categorized as promoters (score 9-10), passives (score 7-8), or detractors (score 0-6).

Customer Satisfaction Score (CSAT)

CSAT measures client satisfaction with services using a simple rating scale, typically from 1 to 5. It provides a quick and easily interpretable measure of client contentment.

Employee Optimization

Why You Should Track Employee Optimization  

Service Excellence

Engaged and motivated employees are more likely to deliver high-quality projects, creating a positive feedback loop that enhances the firm’s reputation and client satisfaction.

Attraction and Retention

A positive workplace culture that emphasizes employee development can help attract and retain top talent, giving the firm a competitive edge in recruiting.

On-Time Project Delivery

A workforce that is well-trained, motivated, and aligned with project goals ensures efficiency and effectiveness throughout the project lifecycle, contributing to the financial health of an organization. Timely project completion not only meets client expectations but also enhances the firm’s reliability, improving client satisfaction and loyalty. Learn how PSA software keeps your projects profitable in every phase of the project lifecycle.

The table below shows the results of a survey conducted by SPI Research, demonstrating the negative consequences of high voluntary attrition rates. 

How to Track Employee Optimization

Employee Billable Utilization Rates

Track employee billable utilization rates to assess the performance of individual employees, identify high performers, and understand their contribution to the organization’s overall productivity.

Attrition Rates 

Increased attrition rates may indicate issues with employee optimization in project teams, prompting a closer look at workforce dynamics to enhance project success.

Employee Satisfaction Surveys

Conduct regular surveys to gauge employee satisfaction and engagement levels. These surveys can provide insights into morale, motivation, and job satisfaction.

Performance Evaluations

Implement performance evaluations that assess employee performance, identify areas for improvement, and set goals for professional development.

Getting Quality Metrics for Project Management With PSA Software

Professional Services Automation (PSA) software is a powerful tool for helping professional services firms gain quality insights into the metrics we outlined above. From measuring revenue to improving client satisfaction, PSA software helps firms keep tabs on what’s important. 

Revenue Growth

Boost revenue growth through better project management. PSA software ensures accurate handling of time, expenses, budgets, project status, and staff capacity, leading to faster business growth and increased profits. It also provides real-time data for quick insights into project budgets and future projections. Additionally, it helps in creating and tracking budgets, and supports project planning with task scheduling, dependency tracking, and milestone setting.

Organizational Profit

Increase organizational profit by optimizing how resources are used, including tracking employee billable utilization rates and skills matching. This helps ensure employees are matched with the right billable projects for maximum productivity. PSA software also analyzes project profitability and streamlines invoicing, providing valuable insights and efficiency that lead to increased billable hours and quicker payments.

Client Satisfaction

Enhance client satisfaction by improving project management and communication. PSA software provides real-time project visibility so clients can be aware of project progress, review deliverables, and provide feedback sooner. When projects are done on time and under the planned budget, you have a higher chance of repeat business and referrals. 

Employee Optimization

Improve resource allocation and utilization to ensure employees are assigned to projects matching their skills and availability. This not only improves project quality but also employee job satisfaction. Additionally, PSA software tracks billable and non-billable hours, helping firms optimize employee workloads and reduce burnout. You can also keep an eye on skill gaps to identify training needs to support individual growth and career progression.

BigTime Gives You Real-Time Metrics for Project Management

It’s time to ditch the outdated methods of managing your business with spreadsheets. By investing in PSA software like BigTime, you’ll gain access to real-time reports and valuable project management insights, freeing up your time to focus on growing your business.

Findings from the BigTime Software Benchmark Report reveal just how influential BigTime can be in improving a business’s productivity, efficiency, and profitability.

Frequently Asked Questions About Project Management Metrics

How do you track project performance?

To track project performance, you keep an eye on things like task completion, timelines, and budget use. Checking these regularly ensures the project is on track and lets you make adjustments if necessary.

What are metrics in project management?

Metrics in project management are measurable indicators that show how well a project is doing. They provide objective data to evaluate the project’s success, efficiency, and whether it’s staying on track with timelines and budgets.

What is KPI in project management?

In project management, a KPI, or Key Performance Indicator, is a specific and measurable metric used to evaluate the success and performance of a project. It provides a clear way to assess progress and whether project goals are being achieved.

The Hidden Costs of Invoicing With Outgrown Processes

Along with being a pain for you, your team, and your clients, an inefficient invoicing process can be like flushing your hard-earned money down the drain. By understanding the common hidden costs associated with not having a proper internal invoicing process, firms can take proactive measures to streamline their internal invoicing processes, minimize inefficiencies, and optimize their financial and operational performance. 

Keep on reading to discover the associated hidden costs of invoicing when no internal process is implemented.

Revenue Leakage

Revenue leakage is a significant concern for professional services firms. It occurs when billable work and expenses are not properly documented, tracked, or invoiced. Accurate and timely invoicing acts as the last line of defense against revenue leakage by ensuring that all billable work, expenses, and changes are meticulously tracked and billed.

Here’s how an inefficient invoicing process can impact revenue leakage:

Unbilled Services
Tasks and hours worked on client projects may not be accurately recorded or billed, leading to a direct loss of revenue.

Underbilling
Even when services are invoiced, they may be underbilled due to inaccuracies in time tracking or a lack of visibility into additional billable details, like expenses or change orders.

Client Dissatisfaction
When clients discover discrepancies in their invoices, it can result in dissatisfaction and strained client relationships, possibly leading to reduced repeat business.

Profit Decline
Over time, revenue leakage accumulates, hurting profit margins and limiting a firm’s ability to invest in growth and innovation.

Year-over-Year (YoY) Change in Revenue

Inefficient invoicing systems can disrupt accurate YoY revenue analysis by introducing inconsistencies and inaccuracies into financial data. On the other hand, a well-structured internal invoicing system ensures reliable and consistent revenue data, empowering firms to scale by making informed strategic decisions based on accurate historical performance.

Here’s how an inefficient invoicing process can impact YoY change in revenue:

Inconsistent Data
Without a well-organized internal invoicing system, revenue data might be inconsistent, making it challenging to compare performance across different years.

Strategic Decision Making
Inaccurate YoY revenue comparisons can mislead decision-makers, leading to suboptimal strategies and investments.

Growth Planning
Reliable YoY revenue data is essential for effective growth planning and identifying market trends. Inaccurate data can hinder a firm’s ability to seize growth opportunities.

Days Sales Outstanding (DSO)

Days Sales Outstanding (DSO) measures the average time it takes for an invoice to turn into payment and is a critical financial metric. An inefficient invoicing process can substantially elongate DSO by causing delays in invoice generation and delivery to clients. This not only strains a firm’s cash flow but also affects its capacity to invest in new projects, meet financial obligations, and make optimal use of working capital. A good internal invoicing system expedites the creation and distribution of invoices, resulting in shorter DSO periods, improved cash flow, and enhanced financial flexibility for the firm.

Here’s how an inefficient invoicing process can impact DSO:

Delayed Invoice Generation
Without an effective invoicing system, invoices may be delayed in being generated and sent to clients, prolonging the time it takes to initiate the payment process.

Delayed Payments
Extended DSO can strain a firm’s cash flow, making it difficult to meet financial obligations, invest in new projects, or cover operational costs.

Opportunity Cost
The longer it takes to collect payments, the more a firm misses out on the opportunity to use that capital for growth or investment.

Profit Margin

Profit margin is a key indicator of a professional services firm’s financial health as it reflects their financial performance and impacts their ability to thrive, invest, and remain competitive in the market. An ineffective invoicing process not only diminishes revenue but also results in heightened operational costs and resource mismanagement, ultimately impacting the firm’s profit margins.

Here’s how an inefficient invoicing process can impact profit margin:

Inaccurate Billing
Inefficiencies in invoicing can lead to inaccuracies in client billing, including missed billable hours, incorrect rates, or other invoicing errors. These inaccuracies can result in underbilling or overbilling clients, which directly affects the revenue a firm collects. Underbilling means the firm fails to capture the full value of its services, while overbilling can lead to client disputes and potential refunds, both of which affect profitability.

Resource Allocation Issues
Inaccurate invoicing can misrepresent the firm’s financial performance, leading to misguided resource allocation decisions. The firm may invest in areas that are less profitable or neglect opportunities for growth, affecting profit margins by reducing resource efficiency.

Operational Costs
Correcting invoicing errors, addressing disputes, and following up on overdue payments all require additional resources and operational costs. These costs can further reduce profit margins, as they are incurred in the process of rectifying invoicing-related issues.

How to Keep Your Invoicing Process Profitable With PSA Software

Maintaining a profitable invoicing process is crucial for the success and growth of your company. One powerful tool that can significantly contribute to your profitability is Professional Services Automation (PSA) software. PSA software like BigTime Software empowers firms like yours to not only address the challenges and hidden costs of internal invoicing but also optimize processes for enhanced profitability, operational efficiency, and so much more.

To better understand the impact of PSA software, let’s take the annual revenue per employee example above increasing by $6,ooo. If you have 50 consultants on your team, that’s an additional $300,000 in revenue each year just from the support of PSA software.

Here’s how PSA software contributes to maintaining profitability in the invoicing process:

Accurate time tracking gives you access to a real-time look at billable hours. This ensures that no billable time is lost or incorrectly recorded, reducing the risk of underbilling and revenue leakage. Accurate time tracking is essential for billing clients correctly and optimizing revenue.

Effective project management helps projects get completed on time and within budget. This prevents cost overruns and the need to write off unbillable hours, which can negatively impact profitability.

Automated invoicing makes it faster and more efficient. Invoices can be generated with greater accuracy and consistency, reducing the chances of invoicing errors that could lead to disputes or long DSO.

Efficient resource allocation ensures that the right people are working on the right projects, at the right time — maximizing billable hours and reducing waste of resources, ultimately contributing to higher profit margins.

Expense tracking makes sure all reimbursable expenses are accurately captured and billed to clients. This minimizes the risk of unclaimed expenses that can negatively impact profitability.

Reporting and analytics provide valuable real-time insights. Firms can analyze their financial data, including revenue, expenses, and profit margins, to make informed decisions for future growth and profitability.

Speed Up Cash Flow by Invoicing Through BigTime Software

BigTime’s billing and invoicing software is a powerful and user-friendly solution designed to streamline the financial aspects of businesses and beyond. Our robust features allow users to easily create, customize, and send invoices, track billable hours, and manage expenses, making it an indispensable tool for efficient and accurate financial management. Our payment processing software, BigTime Wallet creates an easy client payment experience, and as a result, gets you paid faster. But don’t just take our word for it…

Don’t let poor capacity management hinder your organization’s success. Read on to learn more about the effects of this common problem, the benefits of capacity management, and discover strategies for maximizing project profitability.

What is Capacity Management? 

How well you manage your staff can either make or break your professional services organization. When you practice good capacity management, you’re optimizing your team’s time so you can meet current and future needs. 

The main goal of capacity management is to find the right balance between what’s available and what’s needed, ensuring consistent and reliable delivery without wasting resources. By predicting future demands, evaluating current capacities, and adapting to changes, capacity management helps businesses make smart choices, work more efficiently, and grow while controlling expenses.

What is Capacity in Project Management?

In project management, capacity refers to the maximum amount of work, tasks, or activities that a team, individual, or resource can handle within a given timeframe. It’s a crucial concept for effective project planning and resource allocation. Capacity planning involves assessing the available resources and their capabilities, estimating the workload required for a project, and ensuring that the project’s demands align with the available capacity.

The Impact of Poor Capacity Management

Effectively allocating resources to meet client demands and sustain growth has become more complex. Many firms still grapple with these intricacies without dedicated solutions, leading to a range of issues that hinder their potential. In an era where precision, agility, and data-driven decisions are paramount, relying on outdated or makeshift capacity management processes can be detrimental.

If your firm is still using any of the following processes to manage capacity, your project profitability is likely suffering because of it.  

• Manual spreadsheets
• Retro-fit project management software 
• Collaboration tools like email and Slack
• Ad hoc methods like verbal communication, whiteboards, and sticky notes

Below, we highlight eight of the numerous impacts of inadequate capacity management within professional services firms that significantly affect project profitability, undermining the very foundation of a firm’s success.

Impact #1: Delayed Project Timelines

Poor capacity management in professional services firms often leads to delayed project timelines. When teams are overloaded with work or resources are not allocated efficiently, bottlenecks can occur, causing delays in project execution. These delays not only frustrate clients but also disrupt the overall project schedule, affecting the firm’s reputation and potentially leading to financial penalties.

Impact #2: Decreased Productivity

Inadequate capacity management can result in decreased productivity among employees. When teams are stretched thin, employees may struggle to manage their workloads effectively, leading to a drop in their productivity levels. This decreased productivity can have a cascading effect on project delivery, scope creep, client satisfaction, and the firm’s profitability. 

Impact #3: Struggling to Scale

As firms aim for growth, poor capacity management becomes a significant hindrance. The inability to efficiently allocate resources can limit the firm’s ability to take on new clients or larger projects, stifling its growth potential and market competitiveness.

Impact #4: Compromised Quality

One of the most significant impacts of poor capacity management is compromised quality. When professionals are rushed or overwhelmed with work, the quality of their deliverables can suffer. Mistakes and oversights become more common, leading to client dissatisfaction and potential rework, which can further strain the firm’s resources.

Impact #5: Increased Burnout

Excessive workloads and prolonged periods of high stress due to poor capacity management can result in increased burnout among employees. Burnout not only harms individual well-being but also contributes to higher turnover rates, increased absence, and lower morale within the firm, making it challenging to retain top talent.

Impact #6: Lack of Visibility 

Poor capacity management often leads to a lack of visibility into resource allocation and project progress. Without a dedicated system, it becomes difficult to track who is working on what and when. This lack of visibility can hinder decision-making and prevent the firm from making necessary adjustments to meet client demands effectively.

Impact #7: Unable to Forecast Utilization Rates

One of the biggest pains that come with not having resource management software is the inability to forecast the utilization of employees. Utilization rates are a crucial metric for all professional services organizations as they dictate how effectively an organization is utilizing its workforce collectively to deliver billable work and whether there is room for improvement. If you’re using a spreadsheet to keep track of utilization rates and scheduling, it can quickly become a nightmare to update the sheet when sick days and PTO come up to reflect current and accurate forecasts. Avoid this unnecessary and error-prone practice by implementing an automated dedicated capacity management system.

Impact #8: Lower Client Satisfaction

Ultimately, the most critical impact of poor capacity management is lower client satisfaction. Delays, decreased productivity, compromised quality, and other issues directly affect the client’s experience. Dissatisfied clients are less likely to renew contracts or recommend the firm to others, which can have long-term repercussions on the firm’s client base and revenue stream. Maintaining high client satisfaction is essential for the success and growth of professional services firms.

In summary, the consequences of not having a dedicated resource management system in professional services can be extensive, affecting not only project profitability but also employee well-being and overall business success. To thrive in today’s competitive landscape, firms must invest in modern capacity management solutions to address these pain points effectively.

How the Right Resource Management Strategy Can Help Boost Project Profitability During Economic Uncertainty and Beyond

Implementing the right capacity management strategy can be a pivotal factor in boosting project profitability for professional services firms.

A strategic resource management approach ensures that a company’s most valuable assets are allocated efficiently to align with project demands. As a result, organizations can navigate economic fluctuations more effectively, reduce operational costs, and elevate overall project productivity. This not only enhances resilience during challenging economic periods but also positions companies to capitalize on growth opportunities when market conditions improve. It also helps improve client satisfaction by consistently delivering projects on time and within budget, ultimately contributing to sustained profitability and a competitive advantage in an ever-evolving business landscape.

Improving Project Profitability With Professional Services Automation Software

Professional Services Automation (PSA) software like BigTime, seamlessly integrates resource management tools within its feature set, effectively streamlining the entire project lifecycle. From initial planning and resource allocation to project execution and in-depth analysis, PSA software empowers organizations to optimize their resource utilization. In fact, firms who don’t use dedicated resource management software like BigTime see an average employee billable utilization rate of 67.1% while firms who do use the software see an average employee billable utilization rate of 75.7% (2023 SPI Benchmark Report). 

PSA software not only enhances project outcomes but also boosts overall productivity and client satisfaction. When resource management software is disconnected from project management and time tracking, it becomes challenging to assess a project’s financials, gauge the efficiency of capacity planning, and track the project’s progress effectively. Integrating these functions within a PSA software platform resolves these issues and ensures a more streamlined, successful, and profitable project management process.

Here’s how PSA software like BigTime helps improve project profitability for professional services organizations:

Resource Utilization Insights: With resource utilization reporting, you can assess how effectively resources are being used and make informed decisions to improve capacity planning.

Real-Time Resource Availability: BigTime provides a real-time view of resource availability, helping you allocate the right team members to projects without overcommitting.

Workload Balancing: The workload balancing feature lets you evenly distribute tasks among team members to prevent burnout and optimize productivity.

Skill Matching and Expertise Alignment: BigTime’s skill matching capability allows you to match tasks with team members possessing the appropriate skills, enhancing project outcomes.

Custom Resource Categorization: You can categorize resources based on roles, skills, or other criteria, enabling precise assignments and streamlined capacity management.

Time and Expense Tracking: BigTime seamlessly integrates time and expense tracking data, aligning resource allocation with actual work hours and costs for accurate capacity planning.

Forecasting and Predictive Analysis: By analyzing historical data, BigTime assists in capacity and utilization forecasting, empowering you to anticipate resource needs for upcoming projects.

These features collectively empower organizations to make strategic decisions, optimize resource utilization, and ensure efficient capacity management through BigTime’s comprehensive capabilities.

Frequently Asked Questions About How Poor Capacity Management Effects Project Profitability

What’s the difference between capacity management and capacity planning?

Capacity management and capacity planning are closely related concepts, but they have distinct roles within a professional services organization’s operational strategy. 

• Capacity planning is a specific part of capacity management. It’s about figuring out the right amount of resources, like people and materials, you’ll need in the future. You use things like past data and trends to predict what you’ll require. The main aim is to make sure you have enough resources when you need them, without wasting or running out.
• Capacity management is the bigger picture. It’s not just about planning, but also about constantly watching and adjusting during the process. It considers both short-term changes and long-term growth. Capacity management makes sure your resources are used well, your service quality stays high, and you can handle changes smoothly. It’s all about being flexible and smart in how you use your resources to fit the situation.

What is the purpose of capacity management?

The purpose of capacity management is to optimize resource utilization and allocation to meet current and future demands efficiently.

Why is capacity planning important in project management?

Capacity planning is essential in project management to ensure that resources, including personnel, time, and assets, are optimally allocated to meet project requirements and deadlines while avoiding overutilization or underutilization.

What are the main elements of capacity management?

The main elements of capacity management include assessing resource availability, forecasting future needs, allocating resources effectively, and monitoring ongoing utilization to maintain operational efficiency.

What is the most important factor in capacity planning?

The most important factor in capacity planning is accurately understanding and predicting the demand for resources to ensure optimal allocation and utilization.

Overview

Aegis Project Controls is a consulting firm serving the construction industry through unrivaled project controls solutions that support clients and projects in every sector. Aegis’ solutions begin at project conception and carry through every phase of the project, helping project management teams complete on-time and on-budget.

Founded in 2006, Aegis has grown to the largest dedicated project controls firm in the country, providing project controls and technology solutions to some of the largest projects throughout the USA and Europe. Through this growth, CFO Kyle MacDonald and the team saw an opportunity to improve operations and partnered with Bigtime to strengthen everything from timecard and project management to the billing, invoicing, and reporting processes.

Why it Matters

When things aren’t running as smoothly as they could, it causes frustration and redirects valuable time that could be used elsewhere. Slow invoicing can lead to delayed cash flow, while inadequate reporting can disrupt decision-making processes and hinder growth strategies. For Aegis, staying innovative and ensuring clients receive exceptional experiences at every stage is essential. That’s why having efficient operations is a must. Aegis knew to get projects done on time and within budget, it needed to tighten up its billing process. BigTime stepped in to help Aegis address these challenges head-on, boosting overall efficiency. Now integrated into their operations, BigTime is helping Aegis streamline operations, accelerate cash flow, and monitor business performance in real-time ensuring successful project delivery.

The BigTime Difference

Kyle explains what set BigTime apart was not only the configuration and flexibility of the software, but also the continuous improvements: 

With BigTime, Aegis has:

• Enhanced Project Oversight: The whole Aegis team tracks time, has visibility into project progress and metrics, and can make faster decisions with easier access to project data and billing information. 
• Streamlined billing operations: Automated, multilevel invoice approval workflows and a seamless sync with Sage reduce the time to invoice, decrease days sales outstanding (DSO), while accelerating cash flow. 
• Improved reporting: Deeper insights into all financial and operational data helps Aegis make informed business decisions faster.

By partnering with BigTime to drive operational efficiency, Aegis can focus on growing profitability and delivering exceptional client experiences.  

Introduction: The Effect of Homegrown Systems When Trying to Scale a Consulting Business

Homegrown operation systems can be a double-edged sword for consulting businesses. On one hand, they can provide a level of customization and control that is difficult to achieve with off-the-shelf solutions. On the other hand, they can be costly in terms of both time and money, and can ultimately hinder success when it comes to scaling a consulting business.

When a homegrown system no longer meets the needs of a growing consulting firm, this can lead to pain points such as inefficiency, wasted time and resources, and lost revenue. In this post, we will discuss how to self-diagnose if your organization has outgrown its homegrown systems and processes, and the ROI you could be missing out on by not upgrading to a centralized, purpose-built system such as professional services automation (PSA) software.

Self-Diagnosis: How to Tell if You’re Outgrowing Current Systems When Scaling a Consulting Business

A large number of consulting firms still rely on homegrown software and spreadsheets, with Excel and Google sheets being some of the most widely-used applications. If your consulting firm is still utilizing a homegrown system, it’s likely that your internal operations are preventing your business from scaling to its potential.

There are several signs that can indicate an organization has outgrown its homegrown systems and processes. Some questions to ask and consider:

• Are we still working out of spreadsheets?
• Are we having difficulty scaling or adapting to changing business needs?
• Do we utilize inefficient or manual processes that lead to wasted time and resources?
• Is it complicated to track or report on professional services KPIs?
• Are there disjointed systems due to the challenge of integrating with other systems or technologies?
• Are we not yet profitable?
• Do we practice rudimentary time and expense capture?
• Is there a lack of real-time insights preventing timely and proactive decision-making?
• Is our financial visibility and control limited?
• Are we able to predict our financial performance?
• Rudimentary contract and risk management.
• Do we have lengthy invoice cycles that affect project profitability?
• Is our data collection incomplete resulting in no full picture of time and expenses related to accounts and individual projects?

Business process maturity is a concept based on optimizing core processes that include delegating tasks, budgeting, analyzing business data, monitoring progress, reporting performance, setting milestones, and tracking expenses. As professional services organizations (PSOs) move from manual processes to automated software, they often gain improved visibility into their operations at a variety of levels.

This can not only lead to increased performance and efficiency but also improved compliance with industry regulations for both internal and external stakeholders. When implemented correctly these improvements will enable businesses to grow and scale rapidly. If you recognize any of the above signs or your consulting business is positioned to progress to the next maturity level, the next step is to understand the extent of unrealized revenue and growth opportunities.

The Cost of Outgrown Systems on Professional Services Growth and Operations

One of the biggest costs of outgrown systems is wasted billable hours. When processes are inefficient or manual, consultants and employees spend more time on administrative tasks and less time on billable work. These tasks can be time-consuming and divert resources away from more important business activities, such as delivering great work and developing new business.

If your firm is not using PSA software, chances are, you’re working out of Microsoft Excel. The majority (22%) of non-PSA customers reported working out of spreadsheets, and 5 out of 8 Excel users also reported using more than 2 other solutions in conjunction. This means there is no one source of truth for their operations. Disjointed systems can lead to manual-entry mistakes, reduction in billable time and utilization, and even decrease in productivity and revenue.

Another cost to consider is the opportunity cost of using a homegrown system. By choosing to develop and maintain your own operation system, benchmarked data indicates less benefits when compared to consulting firms using a more advanced solution. This includes features and functionality that could help your consulting business operate more efficiently and effectively, as well as the ability to scale and grow more easily.

Growing a Consulting Business and Increasing ROI: The Benefits of Professional Services Automation (PSA) Software

The key to balancing all of the inputs that affect bottom-line profit is having the right systems and processes in place to measure and manage each of the different factors. For a professional services firm, the core system to manage the business is PSA software. It often sits between a CRM solution like Salesforce and accounting software such as QuickBooks or Sage. PSA systems manage the process of delivering work from planning and staffing projects through to professional services billing and recognizing revenue.

PSA solutions are an essential investment for growing professional services firms—an investment that can pay off handsomely when properly selected and thoughtfully implemented. They replace the stand-alone tools that helped a professional services firm get off the ground with a consolidated suite that fuels growth. Siloed time tracking tools, budgeting spreadsheets, project management systems, scheduling whiteboards, and invoicing processes can all be replaced in favor of an integrated solution that offers a single version of the truth.

Investing in PSA software can result in enormous amounts of time, cost and risk efficiency. By streamlining processes, you avoid duplication of data entry and other error-prone manual operations that saves time and money. You’ll also get the visibility and control you need to scale your business efficiently, allowing you to focus on strategic initiatives that drive growth. Let’s explore the benefits a bit deeper.

The data in the PSA Software Benchmark Report confirms that working solely out of Excel is a pain point for professional services firms. While it may be a daunting task, implementing PSA software can actually save firms time and money with its robust features and will continue to grow as they do.

Project Margin

PSA systems like BigTime help growing professional services organizations generate more profit per dollar of revenue generated in several ways. They provide real-time visibility into the health of projects so that corrective actions can be taken early on when the effects of those actions are magnified, rather than late in the game when extraordinary measures are more often required.

Excel spreadsheets can provide a snapshot of where project costs are at, but they lack the detail and insights into which resources are added to or removed from projects in terms of profitability. The resource scheduling components of PSA software ensure that just the right resource is in place on the right project at the right time. This ensures that more junior, higher margin resources are utilized when possible, and more senior, lower margin resources are leveraged only when necessary.

PSA solutions link together time and expense tracking with bill rate management and invoicing capabilities into a single project accounting system. Research from our PSA Software Benchmark Report showed firms that invested in PSA software get paid faster. While the industry average for collecting payments is about 45 days, 57% of PSA software customers say it takes less than 1 month to get paid–13% of those customers report receiving payment in as little as an hour.

BigTime customers who utilize our integrated payments processing solution, BigTime Wallet, report receiving payment in as little as 9.6 days on average – 5X faster than the industry average. By investing in PSA software, you get real-time dashboards that break down project expenses, configurable invoices and invoicing processes, and automatic invoice reminders so invoices go out faster.

These PSA features provide important control that ensures that every hour that can be invoiced to the client is billed properly, thus reducing sources of revenue leakage. PSA software also automates time tracking so that time logged is automatically integrated into the financials for each project which provides the visibility needed to accurately assess costs and profitability.

Without professional services automation in place, all of these factors, each seemingly small and insignificant, add up to less efficient organizations needing to generate more revenue in order to achieve the profit target than their more efficient peers.

Billable Utilization

Project margins and bill rates help translate profit into revenue and subsequently into billable hours. One of the most significant benefits a PSA solution provides is increasing billable utilization, which, in our model means that fewer billable people are needed to produce the same number of billable hours. Efficient resource scheduling, including understanding who has availability to work on other projects, is the key to improving utilization.

6.2% of professional services firms reported their PSA software increased billable utilization by 100%

PSA software enables organizations to satisfy staffing requests faster, schedule resources more tightly, and make more efficient use of available resources. This isn’t about wringing the last drop of sweat equity out of each employee. Solutions like BigTime take each individual’s skills, professional development goals, travel preferences, and more into account, which results in employees being happier in their jobs and improved employee attrition rates.

By integrating time and expense reporting into the same data system or platform, businesses will gain greater insight into how their resources are being allocated. A PSA tool allows managers to better assess project progress and streamline the process for tracking expenses and billable hours, which results in an increase in team productivity.

The key to that efficiency? Any PSA solution allows you to enjoy some of those gains. BigTime as your choice of Professional Services Automation software takes it to the next level.

In our recent BigTime PSA Software Benchmark Report, research indicated that professional services firms who implemented BigTime to improve project workflows in one seamless operating system saw a 52% average increase in productivity compared to other PSA software who are seeing an average 27% improvement. This increase in productivity helped to increase the number of billable hours generated by professional services organizations.

Average Bill Rates

Professional services firms always have to walk a fine line between maximizing bill rates and remaining competitive in their respective markets.

Professional Services Automation software provides detailed analyses on what it took to deliver projects in the past and what activities took more or less time than expected. It provides insight into which project managers were more or less successful at sticking to plans and budgets, and which projects resulted in unexpected rate attrition. Firms that have access to this wealth of historical analytics can turn it into a competitive advantage, and can use it to drive a comprehensive strategy to determine bill rates.

BigTime takes this data-driven strategy a step further by helping organizations understand where rate losses stemmed from. Starting from the sales process, through contract negotiation, and finally into delivery, BigTime’s rate realization model helps managers pinpoint problem areas. All these historical analytics, along with the ability to tightly manage the project delivery process, enables organizations to successfully win new work while still maximizing bill rates.

Percent of Billable Staff

Finally, PSA software helps to, well, automate your professional services organization. What that really means is that a lot of the mundane stuff—wrestling with spreadsheets, extracting and manipulating data, negotiating for staff, compiling manual status reports, hand-editing invoices, re-keying data, and more—gets streamlined into a single system. In turn, what this means is that organizations require less overhead to support their billable staff.

When we add together the reduction in billable resources needed to generate the revenue with fewer overhead personnel needed to support them, we end up with a smaller staff needed to generate a targeted profit. The difference in total number of staff needed to reach your profit goal is materially smaller in a more efficient organization.

By eliminating error-prone manual processes and replacing homegrown systems, PSA software lets you focus on what’s important: gaining the visibility and control you need to manage and grow your consulting business.

Case Study: A Real-World Example of How to Scale a Professional Services Business by Replacing a Homegrown Solution

One example of a professional services organization that was able to position itself for sustainable growth after implementing PSA software is the iFish Group.  The iFish Group is a technology-solution service company helping state and local government agencies and departments develop IT strategies. Prior to the upgrade, the iFish Group utilized a homegrown solution with a self-built time tracking system.

Scott Schriber, Director of Operations, estimated he was spending $5,000-$10,000 of billable time on internal processes and to update a homegrown time tracking system. He added that the company logged approximately $100,000 of billable time to develop it. Not only did implementing PSA software allow them to optimize billable time more efficiently, they were also able to dramatically improve: 

• How invoices were built, stored, and previewed
• Reconciliation between project finances in QuickBooks Online
• Time entry review processes
• Length of time needed for monthly invoices to go out

PSA tools are so essential to services businesses that they are used by 85% of the top-performing services firms, according to SPI Research.

Conclusion: Take Action to Improve Efficiency and Fuel Professional Services Growth

When switching from homegrown solutions like Excel to a professional services automation (PSA) tool, firms can focus more on scaling and less on mundane manual tasks. If your goal is scaling a consulting business, it’s important to be aware of the pitfalls that can come with outgrown homegrown systems and processes. By self-diagnosing the need to upgrade to a centralized system like PSA software, you can grow your professional services organization through increased ROI, improved efficiency, and reliable insights to make better decisions, faster.

Some of the key benefits include of replacing homegrown software with PSA software includes:

• Increased efficiency and productivity
• Improved scalability and adaptability
• Enhanced tracking and reporting capabilities
• Improved integration with other systems and technologies
• Increased billable hours and revenue

When considering replacing a homegrown operation system with PSA software, it’s essential to carefully evaluate the specific needs and circumstances of your consulting business. Start exploring the benefits that PSA software can provide to support your bottom-line profit and professional services growth—contact us for a custom demo today.

Frequently Asked Questions About Scaling a Consulting Business

How do you scale a consulting agency?

According to SPI Research, professional services organizations need a balanced approach to improving 5 Service Performance Pillars to achieve scalable success. Top-performing firms utilize integrated professional services automation (PSA) software to improve performance in each pillar, which include: 

1. Leadership – Vision, Strategy and Culture
2. Client Relationships
3. Talent
4. Service Execution
5. Finance and Operations

What are the KPIs for consulting firms?

The top 6 consulting metrics to consider are:

1. Recognized Revenue (Lagging)
2. Project Profitability (Lagging)
3. Resource Utilization (Lagging)
4. Sales Pipeline (Leading)
5. Scheduled Billable Hours (Leading)
6. Forecasted Revenue Recognition (Leading)

What is a homegrown system in consulting businesses?

A large number of consulting firms still rely on homegrown software and spreadsheets, with Excel and Google sheets being some of the most widely-used applications.

How do you grow a professional services company?

Scaling a consulting agency using professional services automation (PSA) involves implementing software tools to automate and streamline various business processes such as project management, time tracking, and invoicing. This can help improve efficiency, scalability, client management, and the financial health of a services organization.

What are benefits of replacing a homegrown system with PSA software?

Some of the key benefits include of replacing homegrown software with PSA software includes:

• Increased efficiency and productivity
• Improved scalability and adaptability
• Enhanced tracking and reporting capabilities
• Improved integration with other systems and technologies
• Increased billable hours and revenue

Find out: 

• Why organizations choose BigTime over different PSA software vendors.
• ROI benchmarks for implementing PSA software
• How BigTime improves project profitability across internal processes

What is Billable Utilization?

Billable utilization. Every professional services firm I’ve ever worked with—whether they’re a management consultancy, a digital marketing organization, or a technology implementer—calculates and measures billable utilization. Every professional services manager—from the executive leadership level to delivery managers to department heads—tries to improve billable utilization. Every billable consultant is, at least in part, evaluated and compensated on billable utilization.

The problem is, not everyone has a common understanding of billable utilization or how to calculate it.

Billable Utilization Rate Formula

On the face of it, billable utilization, also known as a utilization calculation or utilization rate, is a simple concept that measures how much time people are spending generating revenue. You take the hours that people are billable, divide by the hours they’re available and come up with a percentage using this billable utilization rate formula:

Other Names for Billable Utilization

When it comes to how to calculate a utilization rate to determine an organization’s billable utilization metrics, other terms you may come across include:

• Utilization calculation
• Employee utilization calculation
• Consultant utilization rate
• Utilization rate formula
• Billable utilization calculation
• Consulting utilization rate
• Effective utilization formula
• Employee utilization rate
• Billable rate
• Utilisation percentage
• Resource utilization in project management

However you refer to it, when you use the formula for utilization rate, the next step is to compare that percentage to other firms, to other departments, to other people, and then (at least in theory) you have a way of measuring performance. This assumes everyone is calculating utilization the same way. 

The trouble is, things are rarely that simple if you really want to use something like professional services billable utilization to drive beneficial behaviors. Here’s what you need to think about when measuring billable utilization for your professional services firm.

Grab your FREE copy of Billable Utilization & Other Metrics That Matter for Professional Services to learn more about billable utilization and actionable strategies for improving it. >>

Billable Utilization Formula: The Numerator

Explanation:

The numerator of the utilization calculation is driven by what behavior you want to encourage. Most services organizations take a very simplistic view and just measure billable utilization… time spent working on billable projects.

A Simple View:

Such a one-dimensional view, however, can sometimes lead to contradictory incentives. Should the less efficient consultant who spends more time on a particular task than a more efficient consultant get more utilization credit?

What about a person who does a bunch of work that you can’t charge the client for because someone else had to redo it? How do you measure people who aren’t working directly on billable projects but rather internal projects, yet are still doing work vital to the organization? Do these situations still benefit from a singular focus on billable utilization as their employee utilization rate?

A Nuanced View:

Many top-performing professional services firms take a more nuanced view, and oftentimes have multiple resource utilization measures. In addition to measuring billable utilization, they may also measure:

• Chargeable utilization: measures time spent on billable projects, but only billable time that actually generates revenue
• Productive utilization: measures the number of hours spent on non-billable work deemed vital to the ongoing business of the firm, such as business development or product development
• Total utilization: measures overall utilization, for example, to make sure someone in the finance department isn’t consistently logging 100-hour weeks

Billable Utilization Formula: The Denominator

Explanation:

The denominator of the resource utilization rate is driven by how the organization defines each person’s availability. Like the numerator, how an organization calculates the denominator may also drive behavior.

A Simple View:

For example, people are generally not working on billable projects or generating revenue during company holidays or sick time. Given that, the decision of whether or not to count those hours as available hours in the denominator affects the utilization calculation. 

If people feel that taking sick time will count against them when computing their utilization, they may be less likely to stay in bed when they’re ill. In addition, since the summer months and the holidays are oftentimes peak times for vacation, including time off and holidays in the denominator can lead to variability due to seasonal effects in utilization. 

As a result, there are some advantages to keeping time away from the office out of the calculation.

A Nuanced View:

Like with the numerator, many top-performing firms will also take a more nuanced view of the utilization calculation’s denominator, depending on what they are trying to measure. 

They may want a better understanding of the capacity of their team. In other words, how much productivity are they getting out of current staff without adding or removing people from the organization? 

On the other hand, they may want an understanding of the efficiency of their labor investment. In other words, how much productivity is the company receiving in comparison to what they’re paying for? That difference may be non-existent if the entire staff is salaried. However, when you start factoring in subcontractors paid on an hourly basis or non-exempt employees eligible for overtime, it’s a whole different story. 

As employee billable utilization rates improve, benefits include higher on-time project delivery rates, lower project overruns, and more executive real-time visibility. (Source: 2022 SPI Research)

Professional Services Utilization Benchmarks

Explanation:

Once a firm has settled on an approach to calculate a utilization percentage, the next step is to determine what a reasonable utilization target is. Or, perhaps I should say what its approaches are and what reasonable utilization targets are—both of which may vary depending on the firm’s needs and goals.

If you don’t know better, you may constantly strive toward the 100% utilization rate mark. However, a “perfect” utilization percentage suggests that employees are overworked and may have little to no job satisfaction. What if the utilization rate is above 100%? Then your organization is guilty of poor resource allocation, management, and planning.

A Simple View:

Many organizations aim for utilization rates around 80% and will measure billable utilization against a 2,000 hour per year target when benchmarking themselves against the market. It’s simple, it’s consistent, it doesn’t require a ton of thought, and it’s easily comparable to industry benchmarks like the SPI Benchmark Survey.  However, it’s also important to consider the demands of clients and the nature of the job.

A Nuanced View:

Also, companies may take a slightly more nuanced, but still straightforward measure for individual team members in the form of bonus calculations or metrics on individual dashboards. This measure is often utilization-based on productive hours divided by working hours minus holidays and time off. This can then be compared to a minimum productive utilization target.

Minimum and Maximum Utilization Targets

In addition, more sophisticated firms may use both a minimum and a maximum utilization target to improve the discipline of professional services resource management. Maximum targets may be used to help control overutilization, which may lead to unwanted employee attrition as described in this Forbes article on consulting burnout. Maximum billable or chargeable targets can also help ensure partially-billable managers set aside sufficient time for other activities such as staff development or account management.

In Summary

To sum it all up, a fairly simple notion of determining how busy people are is more nuanced than meets the eye, depending on what the organization is looking to accomplish. 

Firms should consciously and deliberately decide which assumptions and approaches to use and understand what behaviors those decisions are likely to drive. Everyone who is responsible for measuring and optimizing resource utilization rates needs to understand the assumptions and ensure that the approaches are used consistently with their intent. 

One of the most important aspects of measuring and managing utilization is being able to do it easily and consistently. Professional Services Automation (PSA) Software can help consulting firms do this, resulting in a higher utilization rate of 7 percentage points. This translates into improved billable utilization of nearly a whole month per billable employee per year.

PSA solutions yield several core benefits to professional services organizations, but most executives only need to look to the relative 11% (from 68.1% to 75.3%) increase in billable utilization as a primary reason to select PSA. (Source: 2022 SPI Research)

Finally, it’s important to understand that the different methods of calculating professional services billable utilization are not all mutually exclusive. Instead, they can be used in concert with one another. It’s also critical to know that optimizing utilization in isolation can actually be detrimental to the health of a services organization, and needs to be done in concert with all the other KPIs in the business.

To learn more about these other metrics, download our white paper, Metrics that Matter for Professional Services, or read more about billable utilization in our post about how optimal resource utilization can fuel growth. And don’t forget to download the SPI Research for benchmarking targets.

The price for poor resource allocation and management and utilization rate is getting costlier for businesses by the day, from hiring costs to clients dissatisfaction and contract termination. BigTime allows project managers to handle communication, resource management, and invoicing financials within the same comprehensive platform. Request a demo to learn more today!

Frequently Asked Questions About Billable Utilization

What is billable utilization?

Billable utilization measures the percentage of available hours that employees spend generating revenue for project-based services. The utilization rate formula is defined as: Billable Utilization % = (Number of Billable Hours / Number of Available Hours) X 100%. It’s one of the most important Key Performance Indicators (KPIs) measured by almost all professional services firms.

What is the billable utilization rate formula?

The billable utilization rate is calculated by this formula: Billable Utilization % = (Number of Hours People are Billable / Number of Hours People are Available) X 100%

What is utilization rate?

In simple terms, the utilization rate is the portion of an employee’s total working hours that is productive. 

What is chargeable utilization?

Chargeable utilization is slightly different than billable utilization in that it does exactly what it says. It takes the work and hours that are actually chargeable to a customer, telling you what percentage of total hours billed contributes to your service organization’s revenue.

What is productive utilization?

Productive utilization measures the number of hours spent on non-billable work deemed vital to the ongoing business of the firm. It is a much more holistic measure that thinks about all of the work in a professional services organization, not just billable or chargeable. Not all good work is work that’s delivered to customers. It’s work that can be delivered internally that helps advance our business overall.

What is the meaning of utilization rate?

Billable utilization rate is essentially a measurement of the percentage of available time spent working on billable projects. It’s one of the most important Key Performance Indicators (KPIs) measured by almost all professional services firms.

How do you calculate utilization?

Utilization in professional services measures how much time people spend generating revenue. The utilization formula is: hours people are billable divided by the hours people are available, then multiplied by 100 to come up with a percentage.

What is utilization in professional services?

In the world of professional services, utilization is a measure of how efficiently you are using your resources. It can be thought of as a ratio that compares the amount of time you spend working on client projects with the amount of time you have available to do so.

How can billable utilization be improved?

According to the most recent Professional Services Maturity Benchmark report by SPI Research, the following factors have a direct correlation with improved billable utilization:

• Providing good leadership direction
• Utilizing effective communication
• Implementing a PSA tool
• Executing very effective service marketing
• Increasing the deal pipeline
• Limiting service discounts given
• Decreasing the amount of time it takes to recruit and hire
• Improving on-time delivery
• Developing effective estimating and process review processes

Why is billable utilization important?

Billable utilization is important to a professional services organization because it measures how well the business is using its resources and helps ensure revenue targets can be met.

Why is the calculation of utilization rate important?

Utilization percentage calculation helps you carefully evaluate internal resources allocation per project and check if the amount charged is profitable to the business. Calculating utilization rates also helps you analyze the individual approaches to job execution methods and optimize them until they are efficient.

What is a billable utilization example?

Billable utilization percentage can be calculated by dividing total productive hours by total available hours, then multiplied by 100. For example, if an employee’s productive and billable time in a 40-hour week is 26 hours, the employee utilization rate is 65% ((26/40) x 100).  

With over 20+ years of experience talking to prospective customers, we often hear what we call the “Big 3”.

The 3 most common concerns from prospective customers when selecting Professional Services Automation (PSA) Software — fear of change, gaining commitment from staff, and failure to transition.

Our advice is always the same. The “Big 3” are all avoidable by selecting the PSA system best fit for your firm today, and for where it’s headed. We understand there are many different solutions available, and that BigTime is not always the right answer for everyone. We’re okay with that. PSA is not a one-size-fits-all software, the right solution should feel like it’s tailored exactly to what’s most important for your firm. This guide distills our years of industry knowledge and vast first-hand experience of working with a range of clients to make sure any new customer of ours is a mutual perfect fit.

By using this buyers’ guide, our hope is it gives you confidence in the software decision you make, and trust in the solution you’re persuading internal stakeholders to buy into.

Keeping in mind the current challenges that your firm is facing will navigate you towards asking vendors the right questions. PSA software is the engine that sits at the center of what your organization does, empowering your people to make critical decisions about delivering services and managing resources. It’s important to keep this end goal in mind throughout the entire evaluation process. Once you’ve implemented your PSA solution of choice, you should notice a major shift in these core areas.

Benefits of PSA Software

Save Time with Improved Workflows: Internal processes are streamlined from project creation, tracking resources, approving time and budgets, to sending client invoices and getting paid. Save your team from manual tasks that can be automated so they can spend more time on higher-value activities like billable work. This is how we often see PSAs pay for themselves. The right PSA software should also help you to understand current and planned employee capacity to reduce burnout and glean insight into when to staff more and when to sell more.

Centralized Information: Have one single source of truth to gather all of your firm’s valuable data by integrating data across existing systems to get a complete picture of your project’s health. With real-time insights, you can deliver important professional services KPIs to managers when needed, make rapid decisions when they count, and forecast for the future all in one place. This allows you to become more proactive in how you run your business.

Increased Profitability: Accelerate your business and profits through more accurate management of time, expenses, budgets, project status, and staff capacity. Real-time access to this data gives you a better understanding of whether a project is on budget, right this second, and if it will be on budget next month.

Steps to Evaluating The Best PSA Software for Your Professional Services Business

Get the Big Picture of Your Options

The landscape of PSA software can appear vast, but once you cut through the noise you’ll see how each solution falls into a niche.

Before you find your firm’s perfect match, do yourself the favor of looking broadly so you know you’ve covered the extent of your options. We hear from most prospective buyers that they’re evaluating about 3-5 different software vendors. PSA software review sites are a great place to start your research. G2, Capterra, and Software Advice all provide extensive lists of options available and ratings based on real-user reviews. G2 published a PSA Software Comparison Grid Report so you can save time shifting through PSA software reviews and see an average rating of each software provider based on customer satisfaction, specific features, implementation time, and more.

Once you have the list of PSA solutions you’re interested in, use the discovery call time with each provider to lay out your baseline requirements. Think back to conversations with each stakeholder who will be impacted by this decision: Owners/Principals, Operations, Finance, Project Managers, IT, and Front Line Staff. How are processes currently being handled? What pains were the firm feeling that tipped you to this point? Focus most on what your non-negotiables are over ideals for each major stakeholder in your firm.

Narrow Your Options to Select the Best PSA Solution

Once you feel your big picture is coming together, chances are you already have a couple of options crossed off the list. Now’s the time to see how each software vendor compares where it matters most for your firm. Since PSA software impacts each stage of the lifecycle of an engagement, we recommend you narrow your options by sharing current processes with the vendor to see your firm’s current project workflow replicated in the new solution.

This will quickly highlight what’s working, what’s broken, and what’s better than you expected. Your new software solution may not perfectly mirror every manual step you currently have in place, but remember that’s okay – part of bringing on PSA software is discovering a more efficient way of doing things.

Below we’ve outlined the critical project path of a typical professional services organization to help you start thinking about internal processes with ideas on what questions to ask, features to learn about, and which stakeholders to include in the discussions.

It’s important to note a deep dive into each focus area most likely won’t be necessary. We suggest focusing on what needs additional clarity from your big-picture view or where your biggest pain points and need for customization stem from.

Project and Resource Management

Who to include: Operations, Project Managers

What to consider:

• Real-time budget tracking and management
• Tracking of tasks, time, and expenses for a project
• Review and approval process structures for time and expenses
• Resource planning and management of staff capacity
• Tracking of utilization rates at a project and firm level

Questions to ask:

• Is there visibility into the current and future availability of resources for projects?
• How can you make sure you’ve assigned the best staffer for an open task/project?
• Is there insight into skills and costs for managers to plan for the highest profitability?
• Where can I get a pulse on the overall health of a project?
• Is the data displayed in real-time so I can take corrective action if needed to get budgets on track?
• Will engagements come over from my CRM so that I can predict the flux of future projects?

Invoicing, Collection Review, and Payments

Who to include: Finance

What to consider:

• Billing models available and configuration allowed
• Custom branding (company logos, fonts, colors)
• Flexible invoice templates to customize based on client needs
• Ability to add expense receipts
• Review and approval workflows for invoices
• Collecting invoice payments on time
• Option to collect payment via ACH or credit card

Questions to ask:

• Will the software connect to our BI or data warehouse for additional insights?
• How can I keep track of contractor and vendor bills?
• Can the software handle transactions in multiple currencies and how does it work?
• What options are available for sharing professional services invoices and project information with clients?
• Is your payment system secure and PCI compliant?

Reporting and Analytics

Who to include: Operations, Finance, and Principals

What to consider:

• Real-time reporting for the KPIs needed to scale your business including:
• Job costing and project margins
• Client realization and project profitability
• Budget vs actuals
• AR collections and accounts payable
• Expense reimbursements
• Revenue forecasting
• Customization options to filter data
• Adjustable user rights for reports
• Easy-to-digest visuals
• Big picture view into staff utilization and project vitals

Questions to ask:

• Are there forecasting capabilities so you can take corrective action on current projects and adjust job costs for the future?
• Is there a place to get a live look at work-in-progress (WIP) with unbilled time and expenses?
• Will this solution act as the consistent source of truth for business analytics and decision-making?
• Can notifications and alerts be sent to warn teams when budgets have gone over or are close to it?
• How can I adjust staff capacity planning in real time based on utilization insights?
• Is there the ability to see which projects are the most profitable for my firm?

Integrating with Your Tech Stack

Who to include: IT Managers and Operations

What to consider:

• Accounting software (QuickBooks, Sage Intacct, Intuit Lacerte)
• Customer Relationship Management (CRM) platforms (Salesforce, Hubspot)
• Project management software (Jira, Asana, Smartsheet)
• Communication software (Slack, Google apps)

Questions to ask:

• Will the current software we have for accounting, CRM, PM, and communication tools integrate with the PSA solution?
• Are the integrations two-way with a bidirectional sync?
• What type of information is being shared back and forth with your CRM? What is the transaction sync like with your accounting software? How do you exchange work breakdown data with PM tools?
• What types of notifications and messages can be shared with a collaboration tool?
• If we ever want to switch our project accounting software what will that look like for our PSA system?

Front Line Staff Workflow

Who to include: Operations and Front Line Staff

What to consider:

• How quick and easy it is to submit time and expenses
• Custom user rights and defaults to reduce errors
• Option to make fields required
• DCAA compliant time tracking (if applicable)

Questions to ask:

• Are there options for staff to enter time and expenses remotely?
• Can you apply credit card charges to a project?
• What will the onboarding process be like for staffers?
• How quickly can we get consultants up and running tracking time?

What Else to Consider (Product Features & Workflows Aside)

One of the last steps in your top PSA software evaluation process should be looking at how long it will take you to get off the ground and running. Easy adoption and implementation are key when searching for a solution that is supposed to save you time and money.

Equally important is how supported your firm will be by the software provider throughout the partnership. If the goal of the PSA solution is achieved, your firm will be scaling and business needs will change as you grow.

For the final step of evaluating the best PSA software for your organization, we strongly suggest looking beyond the features. You want to make the best PSA tool selection for where your firm is at today, and where it’s going to be 5, 10 years from now. Even the most perfect solution can encounter bumps in the road; get a feel for which software vendor will be there for you when you need support and are scaling upwards.

Shameless Plug: BigTime has been ranked #1 in customer satisfaction most implementable by real user reviews since 2018.

What to consider:

• The timeline for implementation
• Training resources available for your team
• The features you aren’t using and if they’ll make things more complex
• Ongoing support contact options are available
• What industries the solution most commonly services
• Certainty of the company: start-up vs established

Questions to ask:

• What will the implementation process look like for our team? Does your timeline operate on a phased approach or a single rollout?
• What resources do you have for me to help onboard my team?
• Is your support in-house or contracted out?
• Why should I trust you to house our data? How secure is your platform?
• What is your ideal client base? Do you have experience working with customers of similar size and industry as us?
• How often are your product and feature updates?
• Do you listen to client input when making changes to your software? Do you have an example or a reference to share?

PSA Software Evaluation Templates to Use in Your Research

Ready to take action? We hope you bring this guide along with you, and to help keep your research and notes organized we’ve put together two PSA software evaluation templates for you to use.

How they work:

PSA Software Evaluation Template

After downloading your copy, add the vendors you selected during your “big picture” research to the top row. From there you can add the must-have requirements you gathered from internal conversations on the left-side column. Then as you go through vendor conversations you add notes and a grade for each of the core workflow areas and your must-haves identified in this guide. The template formula will then rank the grades to help guide you in selecting the best PSA software fit for your firm.

Mutual Action Plan Template

Timing is everything. Mutual Action Plans are project plans for software evaluation to ensure vendors are working to support your process at the same pace as you. The best way to use this template is to work backward and first identify your target go-live date and when you want people in the platform tracking time. From there, use each tab of the spreadsheet for each vendor you’re speaking with to see how the timeline plays out. This way if a vendor can’t support your timeline you’ll know early on, or if the timeline makes sense for both parties this tool will help you keep track of your agenda.

Summary

The article is a guide on how to choose the best PSA software (professional services automation software) for a business. The three most common concerns we hear from prospective customers when selecting PSA software are fear of change, gaining commitment from staff, and failure to transition. These concerns are best avoided by selecting the best PSA solution that fits your business’s needs not only today, but also for where it’s headed. 

The steps to evaluating and selecting the best PSA software for your organization include:

1. Understand your options by researching PSA software review sites
2. Narrow your options through discovery calls
3. Involve stakeholders to document needs and processes and determine questions to ask at each stage of the project workflow
4. Share current processes and questions with vendors and schedule demos to see workflows replicated in their solution
5. Consider length of time for implementation
6. Stay organized with PSA Evaluation Templates

Choosing the right PSA system for your professional services firm is a crucial decision. This guide will help you evaluate your options and make an educated decision on how to adopt PSA, balancing business goals with strategic results over the long term. 

Ultimately, finding the best PSA tool for your firm is about finding the one that fits. We hope you now feel more empowered and equipped to ask the right questions and make a decision that’s right for your organization. Download our PSA Software Evaluation Guide and Templates to assist in the process, and feel free to reach out to us by emailing sales@bigtime.net or requesting a demo to see how BigTime can help.

Frequently Asked Questions About How to Choose the Best PSA Software

What are PSA tools?

Professional Services Automation (PSA) tools are software platforms designed to help professional services organizations manage and automate various aspects of their business operations. These tools typically include a range of features and functionalities that can help organizations streamline and improve performance in areas including:

• Project Management
• Resource Management
• Project Accounting
• Time Tracking
• Reporting and Analytics

What is the best PSA software?

Determining the “best” PSA (professional services automation) software for a specific organization depends on the organization’s specific needs and requirements. Different PSA software solutions may have different features, pricing models, and levels of customization, and what is best for one organization may not be the best for another. It’s recommended to have a clear idea of your business needs and budget, and then research different PSA software options available in the market and compare them.

Who uses PSA software?

Professional Services Automation (PSA) software is primarily used by organizations that provide professional services, such as consulting, accounting, engineering, IT services, and marketing. The size of organizations benefiting from PSA software ranges anywhere from 5 to 500+ resources.

What is PSA in software?

PSA stands for Professional Services Automation software. It’s used to automate workflows and streamline business processes while centralizing data to provide a comprehensive view of the organization’s operations.

Why use Professional Services Automation Software?

Professional services automation (PSA) software helps service teams streamline delivery, enhance resource utilization and profitability, and drive scalable growth.

What does professional services automation software do?

PSA solutions help organizations bridge the gap between their CRM (customer relationship management) and accounting systems, ensuring that teams deliver remarkable work for clients while staying profitable and efficient.

How will PSA software integrate with our existing systems?

PSA software companies may offer a variety of approaches to integrate with other tools you use, such as your CRM, accounting software, and time tracking system. Integration examples include native, click-to-configure, middleware, and open access.

Can PSA software be customized to meet our specific business needs?

Some PSA software may be more flexible than others, allowing you to customize the platform to fit your unique business requirements.

How much does PSA software cost?

The cost of PSA (professional services automation) software can vary widely depending on factors such as the features and functionality included, the vendor, and the size of your organization. Some PSA software providers offer a basic, entry-level package for a lower amount per user, while others offer more advanced packages for higher costs per user per year. Additionally, some PSA software is offered on a subscription-based model, where you pay a monthly or annual fee for access to the software and its features. Others may be offered as a one-time purchase, with additional costs for support, upgrades, and maintenance.