Professional Services Automation (PSA) and Resource Management Software – what’s the difference?

When comparing professional services automation (PSA) software with dedicated resource management software there are some key differences to note. To help you understand the right solution for your firm, this article defines and outlines the pros and cons of each.

What is professional services automation software?

PSA is a business software designed to assist organizations that deliver billable projects or dedicated professional services to their clients. The broad goal of a PSA system is to provide a framework that helps to connect, manage, and streamline the organization’s day to day projects and operations.

PSA frequently asked questions

Who uses professional services automation software?

Typical users of professional services automation tools may include consultants, lawyers, accountants, and other professional services teams. What these professional service sectors have in common is that chargeable projects, also known as engagements, usually make up their primary source of revenue.

What does professional services automation software do?

In the context of accounting, professional services automation software should enable teams to manage their projects end-to-end, both efficiently and predictably. When implementing a professional services automation tool the objective is often to pull as many systems and information into one place to reduce friction and inefficiencies during the engagement lifecycle, from “order to cash.”

In its most basic form, PSA software may provide “front-office” support and an alternative to using multiple, siloed systems. PSA tools can help to connect day-to-day systems such as project management, time and expense tracking, billing, and reporting. More complex PSA applications can pull in “back-office” modules that can integrate or replace systems such as finance, Human Resources (HR) or Customer Relationship Management (CRM).

In addition, PSA software can (and often does) include a resource management module. The general capability of this resource management module vs. the power of a specialised resource management software tool is a key differentiator we will dive into in more detail below.

What is dedicated resource management software?

In order to best define resource management software, let’s first cover the concept and purpose of resource management itself.

Resource management is the process of planning, scheduling, and allocating organizational resources in the best way possible to maximize the value and potential of your resources. In the context of accounting, the term resource usually refers to the firm’s fee-earning staff and their billable hours. Interestingly, in this context, the resource is both the primary source of revenue and the core cost base for accountancy firms. For this reason, optimal resource management is critical to the survival of these firms and other professional service organisations. This is where resource management software comes in.

Resource management frequently asked questions

Who uses resource management software?

Resource management software is primarily used by resource and project managers. In the context of accounting, another key user would include engagement managers and those responsible for supervising engagement performance. Although often used by project managers, resource management software is not to be confused with project management software.

What does resource management software do?

A dedicated resource management software system is used to optimize the overall resource management process, from resource planning to allocation, scheduling, utilisation, and forecasting. This type of software allows users to analyse resource capacity alongside demand to ensure the right skills are available at the right level, and at the right time.

What are the differences between PSA and dedicated resource management software?

To present the key differences between professional services automation and dedicated resource management software, we have highlighted the pros, cons and key features of each.

What are the pros of professional services automation?

When introducing PSA software, a key objective for accountancy firms is usually to connect the tools used by their teams in order to streamline workflows and in turn, improve productivity and profitability. Here are some of the benefits of implementing PSA software in accountancy.

Everything in one place

By connecting the multiple systems required to deliver the sales cycle end-to-end, PSA software can pull tools and information into one place to make managing projects easier for day-to-day users. With one system to adopt, manage, and maintain, PSA software can be beneficial from a user adoption standpoint. With teams working from and updating one system at the same time, a PSA system can also act as the one source of truth.

Suited to mid-market and smaller enterprises

For mid-market and smaller enterprises PSA software can offer a more complete solution to project management. By allowing users to build out their projects and raise bills directly from the PSA system, projects can be managed end-to-end from one system. More complex PSA systems can also bring in CRM, insights, and HR modules and allow smaller enterprises to reduce the cost associated with running multiple systems.

What are the cons of professional services automation?

While PSA platforms can present many benefits for accountancy firms, its value can also be limited depending on the size, complexity, and objectives of the organization. Here are some of the potential drawbacks to consider.

Lack of specialization

Depending on the size, needs, and complexity of your firm a key weakness of PSA software is often found in its lack of specialization. When compared to dedicated, or “best of breed” solutions, for individual functions such as resource management or CRM for example, a generalist PSA solution will fall short.

Put simply, PSA systems tend not to be strong in any one area in particular but aim to cover many functions well. This means that PSA software is generally better suited to smaller firms with less complexity and requirements for custom functionality to optimize the performance of key business functions at scale.

Limited configuration options

A potential disadvantage of basic PSA solutions may be that they are limited in the integration or configuration options they can offer. Often this means that a firm must select an option that best fits the majority of their needs and integrates with the systems they already use. More complex, or custom-built, PSA software solutions may offer more integration flexibility but may also present other limitations such as costly upgrades, dedicated maintenance, and the need for internal expertize.

What are the pros of dedicated resource management software?

A key objective for implementing resource management software is to streamline the engagement management lifecycle by ensuring the right resources are consistently allocated to the right tasks, at the right time. Some of the benefits of dedicated resource scheduling software include:

Best of breed solution

For many firms, adopting a best of breed software solution for resource planning is necessary to allow them to reach their strategic goals, maintain profitability, and deliver client satisfaction.

Where resources are highly specialized, have multiple reporting lines and are spread geographically, leveraging these resources in the best possible way can be challenging. A dedicated resource management system can help firms to overcome these complexities, deploy resources strategically, and proactively identify revenue opportunities.

Highly configurable

Dedicated, resource management software involves more than just resource planning. An intelligent resource scheduling system also allows engagements to be managed and optimized end-to-end in one system via highly configurable and automated workflows. This level of insight and control over engagement workflows can only be built into a focused resource management software, which has been tailored to the specific needs of the firm.

Ability to scale and adapt

A resource management solution that has been tailored to the specific needs of your firm over time should offer the flexibility to scale and adapt alongside your strategic goals. With more flexibility and focused development, dedicated resource planning software has the ability to pivot and scale to match the longer-term growth and strategic development of firms at the enterprise level.

In addition, a standalone resource planning solution usually offers more scope to explore integrations with other providers and solutions, which further supports firms opting for a best of breed approach.

What are the cons of dedicated resource management software?

The right resource management software can allow firms to increase overall engagement performance and plan their resources in a way that delivers both maximum profitability and client satisfaction. However, dedicated resource scheduling software may not be the right solution for every firm. Here are two key points to consider.

Investment in multiple systems

Taking a best of breed stack approach to optimizing organisational performance will inevitably require the management and maintenance of multiple systems. The process of maintaining and updating these various platforms and integrations is also likely to require a level of internal expertize and ongoing investment. For a smaller enterprise, the financial investment and resources required may outweigh the need for such a specialist tool.

Best suited to a larger pool of resources

Intelligent resource management software can allow firms to optimize resource scheduling, automate and streamline workflows, and benefit from greater efficiencies. When these efficiencies are delivered consistently and at scale, the full value of dedicated resource management software can be realized. For this reason, a dedicated resource management solution may not always be the best fit for firms with a smaller number of resources and no plans for this pool to grow.

Why choose dedicated resource management software?

Choosing the right resource management software solution for your firm can help to optimize your workforce like never before. If your firm has over 100 resources to manage or are looking for a solution that can be scaled alongside your growing business, here are some key reasons to choose a specialized resource planning tool.

Advanced resource scheduling

Reduce the admin burden on your team and optimize your resource planning with automated engagement scheduling. To streamline the scheduling process, resource management software can be used to automatically identify and deploy the best people for the job, ensuring that skills, qualifications, availability, location, and all of your key criteria are accounted for. By streamlining the decision-making process and reducing manual steps, resource planning software can also increase efficiencies and free up time to focus on more strategic tasks.

Live engagement economics

Make more informed decisions, faster, with live engagement economics, automated project controls, and reporting all in one system. Intelligent resource management software allows you to see the impact any resource changes have on your engagement financials, monitor actuals in real time and make changes to prevent reduced margins and potential overruns.

Automated and configurable workflows

Effective resource planning is essential to maintain visibility of capacity, monitor and adapt to ongoing changes, and identify resourcing risks. Intelligent resource management software can offer configurable approval workflows, which can be automated to ensure engagements are reviewed by the right people, at the right time and remain on track.

Automated project controls and alerts can also be used to speed up the process of resolving clashes or prevent them from happening in the first place. These features work to minimize disruptions and delays on projects will also benefit teams and client service as a result.

Configurable reports

Establishing, monitoring, and leveraging the right metrics is key to optimizing your resource management strategy. The most efficient way to measure and optimize your firm’s resource management practices is to combine in-depth reporting and data-driven insights with a powerful resource scheduling software solution. Configurable reports let you drill into the information you need quickly and reduce manual steps to speed up the overall decision-making process.

In-depth reports can also be used to track the skills, qualifications, and experience required and acquired over time, giving resource managers the insight they need to understand resourcing risks alongside current and future demand.

Get in touch with us to discover how your firm could benefit from a dedicated resource management software solution.