Professional Services Automation: At what stage of my business growth should I invest in a PSA system?

In order to grow your IT business you need the right business management systems in place to allow for growth. Without the right systems you may find it hard to stay on top of your financial position, inefficiencies in communication between parts of the business may grow and errors may occur as a result of manual data handling. A good Professional Services Automation solution (PSA), or business management system, will allow you to get organised, manage your tickets, timesheets and resource allocation, enable clear communication across all your staff, reduce errors and, most importantly, give you the information you need to put you in control of every part of your business.

However, implementing a new business system is time consuming and can be costly, you don’t want to over complicate your business processes with unnecessary complexity. So, what is the right time to start thinking about making the change from spreadsheets and home-grown business systems? At what point can you ensure that you will see a good return on your investment? To try and help companies figure out the level of business management functionality they need we have identified 7 key stages of growth and mapped the system capabilities required to each level (you may have seen this discussed in a previous blog I wrote some time ago). First, identify your stage of growth and then use our Capability Map as a functional checklist.

Stages of growth

The diagram below illustrates the key stages companies go through from incorporation to a multinational corporation. Not all companies get there and not all stages are discrete, however, in general, this is the journey to success most businesses strive for:

The main aspects of each stage, when considering your control environment:

1. Start-up

The system support for this stage is almost non-existent. It’s helpful to have an accounting system but if you can’t hold everything else in your head, spreadsheets will do. Invoices need to look professional, but this is easily accomplished with word documents. Enjoy this stage, the world gets harder.

2. Growth

Customers are signing up and going live and the operating model is shifting focus to multi-customer support and regular billing. This shift in emphasis delivers contact management and data discipline requirements

3. Breakout

At this stage you should have a solid customer base and revenue will be less volatile as an increasing percentage is based on recurring payments. To manage things you need a solid contracts database and sales support tools. Also, customer profitability starts to matter as does effective time management

4. Investors

You’re running a successful technology business but to fully exploit your market position you may need some external investment. Any investors will want to see clear management reporting and the due diligence process will through up any weakness in control you have been living with

5. Overseas

The product is successful at home and opportunities exist to drive out into overseas markets. The reseller route has immediate attractions, bringing rapid entry, local market knowledge, support in the time zone, an existing sales force and low cost of entry. Alternatively, you may open an overseas office requiring more management time and far better MIS. Again, this is a key growth stage from a control perspective

6. Roll Up

Whether you are the one acquiring another business, or have been acquired, the needs of consolidation are many and complicated. At this point, a well-designed control environment is the key success factor above all others

7. Enterprise

Overcome all these stages and you may end up with a global enterprise. Get to this point without an integrated control environment and you will be missing revenue, sales opportunities, control and visibility across the enterprise

The table below summarises the control system needs of each stage. Once you’ve decided which stage best reflects where you are in your own journey, use this grid to checkout your own control solution sophistication and confirm that you are on track for further growth:

Capability Map

Capability/Stage			1	2	3	4	5	6	7
Finance	Basic Accounts
	Deferred Revenue Control
	Contract Management
	Central Product Pricing
	Purchase Orders
	Consolidated MIS
	Multi-currency Accounts
	Client Master Data
	Multi-entity Accounts
Sales	Basic CRM
	Pipeline Reporting
	Quote/Order Management
	Target Reporting
	Campaign Management
	Revenue Recognition
	Reseller Management
	Multi-tenant CRM
	Global Reporting
Operations	Billable Only Recording
	R&D Claim Back-up
	Incident Management
	Expenses
	All Time Recording
	Project Budgeting
	Formal Billing Control
	Support Time Tracking
	WIP Accounting
	Inter-company Sales
Capability Legend		No capability required				Essential to support growth
Capability Legend		Useful but not essential				Control gap impeding growth

Getting the control environment right and fit for purpose is a key aspect of running a successful technology business and making the most of the growth opportunities presented by the products you sell. If you are missing control solutions for the processes above, this is a gap that should be addressed at the earliest opportunity. I hope you find this analysis useful in figuring out your requirements, if so, get in touch and we'll be happy to talk to you about how HarmonyPSA might be able to fill any capability gaps you have uncovered.

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Professional Services Automation: At what stage of my business growth should I invest in a PSA system?

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