Having founded and developed several businesses, including IT consulting firms Edenbrook and Fulcrum Solutions, Robinson is familiar with the issues that can arise when a company starts to grow rapidly. Back in the 1990s, when the first versions of PSA were introduced, the solutions were rather simple, he says. “They arose among fast-growing consultancies looking for ways to improve the efficiency of their billing processes based on learning from previous experience. Before that, the standard practice was to use a variety of spreadsheets, populated manually.”
At the time, there were a variety of ways in which partners, managers and staff at consultancies tried to use technology to perform the task in a systematic way. “Some businesses built their own solutions, others bought products and customised them. Accounting software vendors like SAP recognised that by adding a few verticalised features they could differentiate their horizontal accounting solution against other vendors who were basically selling a one-size fits all solution. They started to tailor their offerings to specific markets.”
Consulting organisations – an industry that is built on people and project-driven work – however, face specific challenges. They rely more heavily on understanding the profitability of individual projects, rather than the overall department or company performance. “In those early days, vendors like SAP and Oracle recognised that they could add project accounting functionality to address this market. Soon, vendors in the small-to-mid-market, like Netsuite and Changepoint, spotted the opportunity and followed suit.
The move towards forward-looking analysis
“Later,” adds Robinson, “independent vendors started to spring up who built project accounting solutions which were not tied to overarching accounting solutions – rather, they were for managing project costs and resourcing. Seeing this development, some of the accounting vendors acquired and ‘bolted’ on these solutions’ and sold them as a single vendor suite.”
Amid a changing consulting landscape, including a faster paced environment and clients that demand more delivery insights from their trusted advisors, consulting firms have over the years shifted their focus to proactive management of operations and engagements. Robinson: “Retrospective analysis of project performance is all well and good but it is based on data about past periods. That leads to reactive rather than proactive management of a consultancy, leading to a repetitive cycle of firefighting.”
The key development in rise of PSA technology through the current decade, as with most applications built on emerging technologies, has been a move towards real-time data and more forward-looking analysis. A key part of that movement has been realised due to the close interconnection between CRM and PSA systems. “For most services organisations, establishing a close link between pipeline (CRM) and resource and delivery (PSA) offers the possibility of transforming how the business operates. It creates a shared system that can grow and scale with the business. This is because the main way that services organisations grow is to hire more people, and in order to hire more of the right people at the right time you need to understand the nature of forthcoming demand.”
Leading PSA solutions in the market – including Robinson’s own Kimble Applications – are using their intelligent engines to help consultancies create accurate forecasts on aspects such as sales pipeline and live opportunities, therefore “helping to manage resourcing and delivery.” Robinson comments, “the ability to diagnose trends, to identify issues at an early stage and to see what is ahead, enables business leaders to make better decisions more quickly.” While start-up consultancies or boutique consulting firms with under 50 consultants typically manage this process using spreadsheets, “particularly for firms with 100 consultants and more, this is difficult, time-consuming and most importantly, ineffective.”
One of the key questions for partners that lead internal operations is which PSA system to use. Robinson, who prior to co-founding Kimble worked at Hitachi Consulting for two years, emphasizes the importance of integration into a wider IT landscape. “A strong PSA is designed to integrate easily with other applications. An example of this would be the top CRM in the world, Salesforce, where many applications available on the Salesforce AppExchange are designed to link with others out of the box. That means the preferred PSA can be selected separately and integrated with the most appropriate accounting package – which may change as the company grows.”
A new kind of automation
Going into the next decade, consulting companies will undoubtedly look for PSA to do even more. “The next generation of PSAs will address other problems, such as the problem of guiding a global workforce. There will likely be greater use of bots – to guide consultants to take the next best action, remind them to approve their timesheets or suggest a course of action.”
One trend Robinson foresees being embedded in PSA solutions is what is called prescriptive analytics. “Instead of predictive analytics which arm project managers with data from which to draw conclusions and plan, the technology will then offer more of prescriptive analytics, providing useful suggestions about how exactly to remedy challenges.” Examples span from suggesting the right consultants to add to a project, to recommending a hiring spree on a certain job level to improve project profitability.