Anyone that visited the Project World exhibition at the NEC in
Birmingham last week can’t have failed to pick up on another
three-letter acronym which is being hailed as the Next Big Thing.
PSA, or professional services automation, looks set to become the
new mantra for service-based organisations
And if the cyber prophets are to be heard, PSA looks set to do
for the services sector what enterprise resource planning did for
manufacturing and distribution.
Put in simple terms, PSA is the name given to a group of
software applications designed to enable service-based
organisations to better manage all their internal skills and
resources. By providing an infrastructure within which a business
can streamline every element of the service chain, PSA applications
can enable a company to more efficiently manage its core processes,
thereby improving productivity and the availability of its
staff.
The business case for PSA appears to be solid: through
automation of the service chain, companies can take control of
everything from time reporting and expense capture, to billing,
resource planning and project management, while becoming better
informed about the status of staff, customers, projects and
resources. With the savings and cost benefits going straight to the
bottom line, PSA can deliver a significant return on investment,
often within the space of a year.
According to Dave Hofferberth, research director at Boston-based
research firm Aberdeen Group, PSA is set to be the next-generation
of service tool, which, by 2005, will command a market worth $1
trillion.
An emerging sector, which is thought to be growing at 91% a
year, PSA is geared towards the professional services and
consulting sectors, which includes IT services companies,
management consultants, engineering and legal services, and
internal IT departments. Although suppliers are targeting all
professional services organisations, it is largely IT-related
companies which are the early adopters of the technology.
The potential for an application which improves the productivity
and availability of existing staff, is huge, especially in the IT
sector where skilled professionals are in such short supply.
Despite the efforts of businesses everywhere to find and retain
skilled IT personnel, there have been very few software
applications specifically aimed at working with existing resources
- until now, that is.
Jeremy Fish, head of IT at Midas Kapiti, an offshoot of Misys
which provides applications and services to the finance industry,
agrees that the demand for PSA technology is being driven by the
increasing squeeze on service-based companies, particularly in the
technology sector. “There’s a growing IT services squeeze and
demand is growing quicker than we can skill up. More infrastructure
management means more administration for us, which all drives up
costs. We can’t necessarily pass that on to our customers so we’re
finding margins and profitability is being squeezed,” he said.
“We have to find ways of becoming more effective and reducing
costs, meaning we have to dramatically improve the utilisation of
resources. It’s all about resource planning,” Fish added.
Growing pressure to streamline and better utilise internal
resources was one of the main reasons why Midas Kapiti began to
make a strategic investment in PSA, Fish explained. Initially, the
company invested in a time recording, resource management and
billing application, called SharpOWL, as a route to gaining a
better picture of the company’s use of resources and of the
productivity of its 17,000 staff across 33 offices worldwide.
Developed by PSA supplier Foundation Systems, the SharpOWL
application has enabled Midas Kapiti to produce reports providing a
complete profile of the entire business, showing the profitability
of each maintenance contract, and the performance of each branch.
Not only that, but the application gives a clear picture of billing
information and hours booked on each maintenance contract, Fish
said.
“In August we Web-enabled everything and made it easier to use,
and now we have our own PSA Web site available for our consultants.
It’s a mobile tool kit which gives them access to everything - from
billing and customer data, to e-mail and even our own intranet,
from anywhere in the world,” he added.
The PSA application is interfaced with the company helpdesk and
its customer relationship management applications, and the company
is now working on integrating it with the accounts and project
management systems.
Outside of the IT sector, there is a small, but growing, number
of service-based companies that are beginning to look at the
business benefits offered by PSA applications, one of which is the
Ministry of Defence (MoD). Just over 18 months ago, Defence
Estates, the agency responsible for the properties belonging to the
MoD, began to make an investment in PSA technology by purchasing
the time-recording and reporting modules of the SharpOWL system.
According the Phil Plume, head of special projects at the agency,
one of the main drivers behind the decision was a need to improve
communication with its customers. “Our customer saw us as being
unresponsive, which was worrying for a customer-focused
organisation. In order to change this we had to produce quality
management information which could tell our customer precisely what
we were doing on their behalf,” he said.
To bring about the changes, Defence Estates rolled out a time
recording and reporting package, and subsequently a billing and
expenses application, to about 1,000 users. As a result, the agency
has been able to develop a reporting system which demonstrates to
customers exactly what work was being done where, and detailed the
cost of the job. According to Plume, the results were significant.
“We now have a range of reports giving detailed management
information [from which] we will eventually be able to demonstrate
to our customer the type and amount of work we are doing on their
behalf. This can then be incorporated into formal customer supplier
arrangements.
“We’ve increased the productivity of our professional staff by
13% and have targeted to increase this by a total of 33%. Because
the system is project-based it is contributing to the change in
culture within Defence Estates to embrace project working. Finally,
all the PSA modules link with each other which instils confidence
in data integrity,” he said. With a recent upgrade, the
applications are now Web-enabled, and additional PSA projects are
underway. Currently, Defence Estates is looking to integrate the
SharpOWL application with both the MoD accounts system and with its
internal knowledge management system and is also considering an
investment in two extra PSA modules, covering resource scheduling
and project management, he said.
If the business benefits of implementing a PSA strategy turn out
to be true, users can expect to see more software appear in this
area. Given the recent explosion of consultancy services and the
increasing importance of internal IT departments, PSA looks set to
become a business issue which cannot afford to be ignored.