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.