Professional Services Resource Management
Professional services resource management involves planning, rescheduling, allocating and assigning people, money and technology to maximize its value for an organization. An efficient and optimal professional services resource manager ensures the availability of appropriate resources at just the right time and at cost-effective prices for work being conducted at various times throughout the day or week.
Global economic activity today is driven by services and projects. Businesses around the globe have come to understand that price and product are no longer sufficient in competing against one another; rather, clients require projects which demand consulting skills, knowledge and experience as part of the client contracting.
In this project-driven economy, knowledge worker productivity must be accurately captured. How much time, skills, intellectual property, and materials do knowledge workers require to provide clients with favorable outcomes? Cloud based software designed specifically for services resource planning (SRP) helps manage all phases of the project life cycle, from requirements gathering to time tracking and expense reporting.
SRP (Service Resource Planning) provides the foundation of an enterprise resource planning (ERP) solution designed to facilitate project and service initiation, planning, management of resources, execution, closing and controlling of projects/services.
SRP combines various standalone business applications into one consolidated solution to manage the bid-to-bill lifecycle from inception through closing/control of services rendered or projects/projects completed/completed and monitored as part of the service provision life cycle management (PSA/ERP) lifecycle support system.
SRP stands out as a leading solution because its single database design ensures that all critical information across functions and business units is accurately captured in one central place and remains consistent across applications utilizing workflows designed to mirror core business processes of service-driven organizations:
- Qualify opportunities and turn them into quotations or proposals.
- Start and manage projects using the appropriate resources at the correct time.
- Optimize resource use by capturing time and costs spent on the project.
- Manage the project accounting, including billing and collection.
- Manage projects to maximize profitability.
SRP solutions are complete and cover all the aspects of project finance and accounting. They can generate invoices using different methods, such as time and materials, milestones, fixed prices, etc. A complete SRP solution ensures inventory accuracy, cash collection on time, and revenue recognition.
Services Resource Planning
Standalone Applications: The Current Reality
Many service-driven companies rely today on various point solutions to run their businesses. Some organizations may no longer need the legacy applications that manage general ledgers, accounts payables and receivables. The traditional accounting software was designed for something other than a project-based, always-on business where employees of all levels require mobile access and visibility to financial reporting to make timely decisions.
The limitations of PSA/CRM systems that are standalone:
- The sales team needs help seeing the status of a project.
- The Services Department doesn't plan for the deals they will offer.
- Finance is a world unto itself.
- The client organization cannot resolve billing issues.
- Complex IT environment
Many sales and marketing firms rely on separate Customer relationship management systems that do not interface with financial or PSA software, making service delivery teams unaware of upcoming deals, the skills required, or financials unaware of terms, pricing estimates or estimates being offered; finance does not have an overview of terms being proposed while sales team could agreeing to contract terms that expose risks while cutting margins.
Most service-driven companies use project and time management software to track expenses. Unfortunately, some rely on error-prone Excel spreadsheets, which require manual updates and time-consuming email approval processes; knowledge workers require timely updates about projects or accounts but have to wade through static reporting processes to access accurate, up-to-date data.
While standalone PSAs and CRMs provide better visibility than spreadsheets, their value can only be further diminished with integration between each other and core financial applications. Service delivery staff cannot view project information. Finance operates in its bubble, preventing client-facing staff from responding and anticipating issues efficiently; each software provider maintains their database, creating an inflexible IT environment.
Integrated Applications Can Make a Difference
Service Performance Insight research has demonstrated that top-performing businesses excel at using integrated IT solutions. While most professional service organizations utilize financial management, CRM, and PSA applications for planning, selling, and executing services, those which achieve even more impressive results typically combine these core applications.
Integrating information is necessary to move it seamlessly between systems (for instance, CRM to PSA and ERP), benefitting all employees who share it by increasing understanding of high-demand skills and costs as well as availability, profitability and client satisfaction.
Through integrated information, subcontracting or recruiting can be switched on/off depending on client demand for resources; financial executives can better align revenues and costs while service delivery teams focus on quality and productivity. SRP integrates the best features from ERP, CRM and PSA applications into one holistic system background that gives executives visibility and control of all business aspects.
SRP applications rely on a shared database, giving organizations an accurate overview of all processes and functions. Sales professionals can view resources available and the status of projects to give clients accurate real-time information; service delivery teams can view clients' relationships to ensure proactive communication; finance departments gain an overview of revenues versus costs that helps balance them, improving cash flow forecasting capabilities while creating accurate business plans and forecasts.
What is the Importance of Professional Services Resource Management?
Management of professional services resources has an outsized influence on projects and programs undertaken within an organization and value creation within that same framework.
When handled appropriately, resource management can ensure programs and projects run efficiently while setting the foundation for on-time, on-budget delivery of professional services projects. Furthermore, resource management ensures resources in professional services are well-rested and energized. According to Consulting, professionals working in professional services often face higher burnout rates than other workers due to heavy workloads (often exceeding 80 hours a week), tight deadlines and long travel times, causing their stress levels to skyrocket.
Professional services organizations strive for real-time visibility and control over resources while being able to make data-driven, real-time decisions:
- The capacity of the team as a whole or for each member.
- Actual and planned work across all phases of the project.
- Available to accept new projects.
- When work is required to be rearranged due to shifting priorities, schedule slippage or attrition of resources, the impact on delivery (schedule, finances, etc.) will vary.
- Planning and utilization of resources.
- Optimizing resource utilization.
How Time Reporting Affects Resource Management
Service Resource Planning has a relationship between resource management and time reporting is important. Contrary to popular belief, the two are different. All three terms (resource management, resource planning, and capacity planning) refer to the future. The term time reporting is used to describe past projects.
Time planning has many benefits, such as:
- It allows for better tracking time of the actual work done compared to what was planned (plan vs Actuals) regarding cost, effort, margins, etc.
- Billing customers can be done accurately (if needed).
- Time tracking allows for the actual use of resources.
- Revenue forecasting is possible.
- Revenue recognition is possible for service organizations.
It would be best to understand that resource planning does not require time reporting. Therefore, it is possible to use one or the other throughout the entire project lifecycle.
Resources Management Plan Professional Services
No resource management strategy is universally applicable to all service businesses. Every organization has to take into account a range of factors, both internal and external. Service businesses need to keep several fundamental principles and considerations in mind when developing, maintaining, and evolving their resource management plans. The following are some of the principles and considerations that service businesses should consider as they develop, maintain and evolve their resource management plan to fit changing work management needs.
Model your Home
Businesses providing services must decide if their resources will be managed through a decentralized or centralized system and who will make decisions regarding where staff should be assigned. Centralized resource management involves submitting requests to an approved central authority or manager of resources, who then allocates and approves them. In contrast, decentralized resource management involves local allocation by team leaders or project managers.
Each approach to resource management comes with its own advantages and disadvantages. A centralized system offers more control of allocation and time and expense management; however, its rigid nature often strips local autonomy. Decentralizing allows more flexible resource distribution but demands better communications to share resources efficiently.
Collect Staffing Data Points
The organization must understand what data they will require to ensure that the resource manager can select the best resource to meet the project's needs while meeting time and cost management goals. Staffing data includes:
- Techniques
- Product skills
- Consulting skills
- Location of Regional Office.
- Travel willingness
Resource managers must use criteria when selecting people as key resources; this data must then be tracked over time - key resources may have gained new skills or relocated elsewhere in a timely fashion.
Responsibilities of resource keeping. Resource managers must inform resources of this responsibility, while an essential resource management tool (which we will examine more closely later in this guideline).
Create a Resource Management Model
The robustness of a resource management model can help answer key questions such as:
- How will you monitor the staffing process and ensure it meets your goals?
- Sales funnels can tell us if demand will likely exceed the capacity.
- When will we know that it's necessary to add extra benches?
To plan appropriately, organizations should set up regular meetings with their resource managers to better understand demand and capacity both now and into the future.
Define Your Flex Strategy
A flexible strategy can help address situations where resource reallocation is required (currently or in the future) by taking into consideration key factors such as:
- What will happen if the demand for resources exceeds our capacity?
- Can we draw on any partners, staffing agencies, or other resources?
- Can we slow down the delivery of goods and implement a model where first in, first out is used?
- What is the best approach to setting expectations with sales staff when demand is high?
The next section in this guide is about integration. It also discusses the importance of early insight into the potential demand by the sales department to allow for timely decisions on the best way to adjust the capacity.
Communication and Execution Consistent
Assure that everyone involved in the project understands both the organizational model and its objectives, including the outcomes and roles they are expected to play. It is important to do this consistently and update teams based on metrics reviewed during the governance process. A team that is informed will be more motivated.
Iterate and Get Feedback
Leaders need to listen and talk to resource managers to understand better how the business model works for them. To solve the problems identified on the ground, it is crucial to act quickly and to make well-informed course corrections.
The Benefits of Integrating Professional Services Resource Management Software
Only with the best professional services resource-management software can resource managers implement their resource management plans effectively and efficiently and update them continuously. We will examine some key factors in the guide to help resource managers evaluate various options in the market. First, Let's highlight some of the key benefits of integrating professional services resource-management software:
Optimum Resource Planning Is Possible With The Help Of Organizational Planning
Professional services resource management software allows organizations to balance demand with capacity by planning. It also improves the performance of an organization by using people who have the right skills and are available. Resource managers do not have to rely on assumptions. Still, they can use what-if scenarios and rebalance their capacity based on demand, timelines and financial impact.
Helps Organizations Allocate Resources Proactively And Relocate Them As Priorities Change
Software for professional services resource management allows organizations to manage and track their resources, track time and measure the value of work. Resource managers can also use request management metrics to instantly evaluate the cost and value of work, prioritizing, approving, and scheduling work aligned with strategic goals. The resource managers can easily reallocate their resources and, if needed, ask for additional resources. They can even adjust deadlines or request more resources to meet stakeholders' expectations.
Maximizes The Value Of Your Organization By Tracking Its Resources And Maximizing Their Use
Software for professional services resource management allows organizations to have a complete picture in one place of the resources they are using. Resource managers can review, approve and manage the resource schedule for projects to be delivered on time and within budget. Reports and dashboards can be used to drill down to the KPIs and metrics required to align project delivery with corporate goals.
Integration of Professional Services Resource Management Software: Best Practices
The following are best practices that can help organizations ensure their integration of professional services resource-management software will be successful, profitable and not stressful or costly.
The Visibility of Pipelines is Crucial
It is not sufficient to manage only active projects with their resource demands. The organization must have a clear view of the upstream customer demand, i.e. sales pipelines. This will allow them to plan and prepare for when these opportunities are closed.
Early Integration of CRM with your Business Processes
Early integration with CRM helps managers plan for the future.
Definition of the Source of Truth for Resource Data
Some data, such as skill information, is stored in the HR system and not by PSA. In this case, integrate the PSA tool with HRMS as early as possible to allow for onboarding, off-boarding, management of skill data, etc.
Professional Services Resource Management Software: What to Look for?
Service Performance Insights states that "Professional Services Automation is the basis of initiation, planning and resource management. It also provides the system for execution, closing and controlling projects and services". Below we outline the key functionality you should look for in evaluating your organization's PSA software:
- Controlling the Availability of Skills: Real-time information on various necessary talents and skill availability should be provided by the PSA solution. It makes resource allocation more precise.
- Dashboards, Reporting and Analytics: The PSA must provide real-time insight into the resources' status. This data can be used to create reports and visualizations that improve communication.
- Request Optimization: The PSA solution should automate resource requests to ensure proper prioritization and set stakeholders' expectations. The ability to align project management initiatives and corporate strategy is undermined by one-off requests, "pet" or non-standard processes, ad-hoc, and random requests.
- Timesheet Management: The PSA must have robust time tracking and reporting functionality that is easy to configure and use. This includes the ability for each person to accurately and quickly log their time. The time-tracking and reporting feature accurately depicts the billing, chargebacks and resource rates. It also shows where and how time is spent, ensuring a balance between work types.
- Source of Truth: The PSA solution should allow all data related to project management resources to be centralized in a cloud-based location. The vendor must have extensive experience in both APIs and integrations.
- Capacity Forecasting: The PSA solution should allow leaders to balance resources evenly across project management portfolios.
Last Word
Professional services are experiencing rapid expansion as more businesses seek the expertise of experts to compete successfully in today's globalized economy. Consulting organizations must improve their services while competing against global businesses for resources.
Integrating core business solutions such as ERP, CRM and PSA into professional services gives PS executives real-time data they can use to adapt and adjust to market changes quickly. Arion ERP'S SRP Solutions integrate and amplify the results of core applications to enable services organizations to deliver professional services efficiently and profitably.
The new work environment is marked by innovative ways of connecting resources, from virtual to cross-functional teams. Resource managers, project leaders and others must adopt and support new methods and abilities to work.
This guide will give you a solid framework to manage the resources in your organization effectively and determine its next best course. Get in touch with the most reliable service resource management software solution that suits your profession.
