How to build a business case for a PSA solution

    Written by CloudBlue PSA on 2016-09-19 Last updated 2018-07-09 - 6 minute read

I’ve written before about the business case for buying an enterprise Professional Services Automation / PSA tool, but not about how to go about building such a case. So, that’s today’s challenge, to tell you how to build your own business case for an integrated solution for the control of your technology or consulting business.

Clearly, I’m partisan. As I sell HarmonyPSA, the points I’m making revolve around the end to end completeness of Harmony. However, in the spirit of fairness, please use these points to build the case of other business software: just adjust them to suit the scope of the solution you are considering. (And then add Harmony into the mix to make sure you’re not short changing yourselves!).

Being an engineer, I need structure, so I’m going to break the problem down into four categories, becoming less tangible as we progress:

  • Saving money: the most tangible and direct consequence of implementing a modern PSA solution
  • Eliminating revenue leakage: a good PSA tool will ensure you bill everything you should and stop doing work for free - I’ll give examples
  • Improving efficiency: enabling you to optimise the delivery of the business have and ensure you don’t miss any opportunities, slightly harder and less tangible, but very real nevertheless
  • Taking opportunities: maximising your share of wallet of your existing customers. OK, so this seems pretty intangible, but if you can’t see/understand those opportunities right now, how do you know?

The combination of these four should both reduce your costs and increase your revenue while allowing you to become more efficient along the way. Now, the maths students among you will realise that as you simultaneously reduce costs and increase revenue your profitability goes through the roof and that’s the real reason people implement PSA systems.

Now, onto the numbers.

#1 - How does a PSA tool save you money? Below is a checklist you can work through and quantify:

  • Work out the % of your staff that are in Finance, best practice is ~3%, we see examples over 10%. Don’t plan on less than 5%, but redeploying the surplus people into revenue-earning roles will see you save real money fast
  • How much are you spending on software to do the following functions: timesheets, expenses, service desk, purchasing, asset management, CRM, quoting, project management, invoicing and MIS? Not all of these will be needed by all businesses, but many will. Write down the costs of all that software, including any internal time spent making the data flow between them (manually or automated by you). If data is a problem in your shop, add in the time spent fixing the data or creating manual spreadsheet views of it for management. If you don’t have these figures, make reasonable assumptions - I’ll wager it’s more than you think. If it’s an internally developed system, check out your time bookings and cost them honestly. As Harmony does all this in one place, those running costs will disappear, completely
  • Take a look at any “coordination” roles you have in the business. If they are really just holding badly integrated software together (be honest), they will have nothing to do once you implement Harmony: nothing

#2 – What is revenue leakage? Well, it’s when you work for a customer but don’t get paid. Look at the examples below and consider what happens in your business:

  • Do you ever provide support without confirming that your customer has a current support agreement for the device or software in question? Before you say no, check, I’ll bet you do. Would your support people even know that a customer has cancelled, every time? Again I doubt it.
  • How well is your Project Management software integrated with your order management process? Only PSA tools join these up. Without that join, I’ll bet scope creep means you are working for free on the margins of your projects. The right integrated data stops this dead.
  • Have you ever forgotten to invoice something? Sounds unlikely when actually it’s quite common. Have a think and put an annual estimate in the box: it will never happen again.
  • If you develop software and customise it for customers, do you add support elements to each change? The software is becoming more complex over time - are you getting paid extra or just sucking it up? If the latter, you are missing out on real revenue opportunities. Better make sure your control environment can handle that complexity.

#3 – How can you improve efficiency? Let’s add review some examples to understand where this matters:

  • Here’s a simple example to try. Your customer makes a repeat order with a different quantity (we’ll use user license but it could be anything). How long (effort time) would it take you to create an oder, get it signed, process the order, update the contract db, customer file and raise and post the invoice? And how many people would be inolved? In Harmony (I just did it) this whole process took me less than 3 minutes, all complete, catch-up invoice sitting in accounts receivable, no hand-offs apart from the customer signing the order online (which he did in 5 minutes, paperless). Now think about the people who are involved in incremental orders and what time they would take to achieve the same. Add that saving to the business case.
  • Do you know which is your most profitable customer and which ones you are losing money on? If you don’t have this to hand, how long would it take you to produce this type of information, say, monthly? This is a standard dashboard report in Harmony (including overhead recovery) so it’s available on demand. More importantly, you can drill down by project or support contract. This is information you need to optimise your business - cost the manual production of MIS so it can be eliminated.
  • You get an order that needs a project to deliver it. How much time does it take your team to record the order (in whatever tracking place you use), set up the project code and budget etc in the PM tool and link this to milestone release, or set up the rates in the billing system and link that to the timesheet system and allocate soemone to look after the work? In Harmony, this is all part of a single unified view that would take a few minutes to manage with nothing needing rekeying. You work out the saving - that’s efficiency.
  • You get a request from a customer for a new piece of equipment. You have to get a signed order, order the kit, arrange installation, book that in the service desk solution with the technician, realign that data when the delivery is delayed etc. In Harmony, you can raise a quote straight from a service ticket, connect that to the implementation ticket, track correspondence against both in one place, on your phone, in minutes. If the coorodination of this stuff is driving you (and your customers) mad, Harmony places it all in one db with one workflow.

Now the least tangible, but actually the most exciting: maximising opportunities.

  • Reviewing your support profitability, you discover customers that cost you money to support. This gives you two choices, cancel that account, or increase the price. Increasing the price to the point where you make a return on the work is the right choice. Would you see this opportunity today, accurately without data noise, or major manual analysis? If not, there is a definite opportunity here - add it in.
  • You want to upsell the latest tech offering to your existing customers. How long woud it take you to build a campaign list of customers that might be interested in such an offering (based on what they own), and once you’ve done this, set up the campaign and start calling round? You also need to monitor the time it takes to run this and understand how much gross margin it brought in from the number of sales closed. Is your data clean enough to do this? Where is the data you need to build that list, where will you manage the campaign and how will you know how much you sold? Do you even have a clean customer list? Many businesses don’t. You can do this whole exercise Harmony, all the data is there and clean - a few minutes should do it.
  • Are you good at tracking change requests on projects and making sure the client pays or changes their mind? Or reviewing bug tickets and converting them into feature requests? Where is all that information, is it on the PM’s email? In Harmony, it will be in the project folder, the mail chain becomes a corporate resource, the specificatiton in the associated document folder, internal project reviews are simple and can ensure you get paid correctly. If you don’t have this problem sorted and visible, add 5% of your development budgets - a reasonable average for untrapped scope creep that Harmony can help you eliminate.

HarmonyPSA is designed to place your entire operation in a single place, and display it on your phone. It will maximise your revenue opportunities while simultaneously improving your operational efficiency and saving you wasted costs. If you would like more advice on building a business case that is relevant to your business, call us and we will work with you on making the case for change. A 20% improvement in profitability should be easily within your reach.

Steve Duckworth, CEO

Book a demo

See also:

At what stage of my business growth should I invest in a PSA system?
How to build a business case for a PSA solution
Implementing professional services automation - where to start?
The 5 golden rules for PSA implementation success
Assessing the ROI for implementing a Professional Services Automation (PSA) solution
Beyond Professional Services Automation – Are new breed PSA systems are changing the way technology providers do business?


About the Author: CloudBlue PSA is the most complete cloud professional services automation (PSA) software on the market. Purpose-built with functionality to simplify every need of MSPs and Professional Services Organisations, CloudBlue PSA introduces a state-of-the-art PSA system built for today’s modern service provider. The platform empowers services organizations to scale recurring channel revenue and diminish operational complexity via its advanced product suite, which includes automated billing and reconciliation, an industry-leading customer support center and network operations center (NOC), real-time profitability analysis, and much more. CloudBlue PSA is available globally. Follow CloudBlue PSA on , LinkedIn or Website

Tags: better business, Business, MSP Business, msp psa, Professional Services Automation, PSA business case, psa for software companies, Automation Benefits


Recent posts

Subscribe to our blog