One of the first factors a business considers while subscribing to professional services automation (PSA) software is its return on investment (ROI) and how it would benefit the company financially in the long run.
PSA tools help businesses boost their ROI by centralizing and streamlining business processes, thus eliminating hectic manual entries. This lets businesses view the project status and performance in a single interface.
Many businesses have adopted PSA software to make their project management process efficient. A report states that the market value of PSA software is expected to reach USD 1679.72 million by 2026.
But before we dive into the ROI of PSA, we shall take a quick look at what PSA is.
Professional Services Automation or PSA software is a platform that offers services to businesses. These tools offer end-t0-end solutions to manage projects, finances, or people. It combines multiple functions such as timesheet tracking, project management, resource management, business intelligence, and more.
Here are some key features of PSA software that might benefit your organization.
PSA software allows you to manage tasks and projects, and track and view task and project updates in a centralized platform. Using a PSA tool instead of manually populating spreadsheets to track the progress or completion of each project helps better project execution and delivery.
PSA software also helps project managers track their available resources and assign tasks based on availability and skill set. They can also assess whether more resources must be added to meet the project’s demand, contributing to accurate forecasting and budgeting.
With a PSA tool, you can analyze the performance of projects, the associated risks, and the efficiency of each project.
Another compelling feature of PSA is that it allows organizations to track and manage the costs and profitability of projects through invoices, billing, and time and expense tracking.
PSA tools enable project managers to track their team’s performance and generate productivity reports. They can also automate live dashboards, including billable hours and project deadlines, ensuring that everyone is on the same page and working towards a unified goal.
PSA tools also enable project managers to track employee performance and work hours Overall, it gives them complete visibility into projects, business operations, resources, and so on.
There are several benefits of using PSA software to manage your projects. A PSA software can help organizations optimize their operations, enhance team collaboration, improve project delivery, and boost overall productivity, among other benefits. Here, we shall look at some of the key benefits of using professional services software.
SMBs lack the extensive resources to implement billing, invoicing, and revenue recognition processes. They usually outsource such processes to third parties.
PSA software helps SMBs automate repetitive tasks and business processes, thus saving them considerable time and outsourcing costs.
With a PSA tool, managers get real-time visibility into their resources, allowing them to match the resource with the right skill sets and tasks. It lets managers track and allocate tasks to resources efficiently and ensure that organizations optimize the utilization of resources.
Businesses can ensure consistent service delivery and achieve business milestones swiftly and efficiently.
A PSA makes life easy for businesses by offering data centralization. This eliminates the hassle of creating and updating lengthy and complex spreadsheets and collecting important metrics and insights from them.
PSA software provides detailed real-time insights and analytics that enhance the decision-making capabilities to project managers and allow them to identify and prevent bottlenecks and achieve deadlines easily.
Rocketlane's Operations Insights lets you discover essential metrics and insights, such as customer satisfaction scores obtained throughout your project lifecycles.
With the help of PSA software, organizations can create a client-focused strategy.
You can automate project updates and completion statuses to be shared with the customers to keep them in the loop about your project progress.
Sending regular project updates to customers throughout the phases of the project ensures that the project is on track and that any issues that may arise are dealt with promptly. This gives the customers complete visibility of the project and ensures that they enjoy a premium customer experience.
Professional services automation software enables team collaboration with the centralized document and template sharing feature. Creating a designated space for all the shared documents and notes makes it easy for team members to access it without sifting through various documents and emails.
Rocketlane also has an in-app chat feature to keep all the conversations in one place for easy and convenient access to information and updates. This ensures that all the conversations regarding a specific project are available in a single interface. This helps teams complete their tasks more efficiently and boosts their overall productivity.
With the help of a PSA tool, organizations can reduce administrative efforts by eliminating manual data entry, thus saving valuable time and resources. The increased efficiency leads to cost savings by optimizing staff utilization and minimizing time wastage.
Various factors determine the ROI of professional services automation software, such as organization needs, software efficiency, and industry. Companies can implement multiple best practices to yield the best ROI, which you can find later in this blog.
For now, let us discuss the factors that contribute to the ROI of PSA software.
Professional services automation software helps businesses with their resource management and allocation. It makes it easy for organizations to assign tasks to the right resources and also helps them make hiring decisions. Factors such as billable hours directly impact profitability and revenue generation for the organization.
PSA software helps businesses manage and track their project progress. Project managers can also track their project costs, revenue, profitability, and so on, on a PSA tool.
A PSA ensures accurate budgeting, timely invoicing, and cost control, which enhances the project’s profitability, increasing the ROI of the professional services software.
Using a PSA tool helps businesses reduce revenue leakage, improve cash flow, and enhance billing processes. Companies can automate and streamline various processes with PSA to ensure a higher ROI.
Rocketlane’s financial management capabilities enable businesses to streamline their project finances and create financial reports, thus enabling them to make informed decisions. With features like rate cards, time tracking, and project reporting, Rocketlane lets you manage your finances according to your specific needs.
Professional services software makes client management easy with its customer relationship management (CRM) feature. A CRM ensures better client interactions, improved service delivery, and enhanced customer satisfaction.
In the long run, CRM helps with customer retention, which directly impacts the ROI of the PSA and contributes to the growth and profitability of the business.
Organizations can manage their finances with the help of PSA software. With budgeting, reporting, and forecasting features, companies can improve their financial visibility, optimize costs, and maximize profitability.
Here is the formula for calculating the ROI of PSA software:
ROI = [(Current value of investment – cost of investment) / cost of investment] x 100]
Divide the increase in value resulting from the investment by its initial cost, and then multiply that figure by 100 to get a percentage.
In order to calculate the ROI of PSA, businesses need to break down their costs and revenues while focusing on the efficiency with which they use the billable time and how quick they are with their project delivery.
Now, the big question: How do you know if your PSA tool is giving you a good bang for your buck? It's simple: by keeping a close eye on those crucial metrics that spell out the ROI. While these metrics may vary based on your business, there are some common ones that every professional services business can benefit from tracking.
Profit margin gain helps businesses assess the total increase in the profit margin after implementing professional services software.
Profit margin gain can be calculated by comparing the business’s profit margins before and after implementing the PSA software. You can read more about calculating profit margin for your business here.
PSA software contributes to the profit margin gain of an organization by providing better resource allocation, reducing costs, and improving project management on the whole.
Tracking profit margin gain also helps companies assess the financial impact of investing in PSA software. Over time, tracking profit margin gain helps companies identify trends and make smart business decisions, thus maximizing their profitability and boosting their ROI.
Revenue leakage reduction tracks the potential loss of revenue caused by insufficiencies, errors, or the lack of properly tracking billable hours. This metric identifies the areas where revenue might leak due to inaccurate invoicing, missed billing opportunities, or other factors.
PSA reduces revenue leakage by automating processes such as time tracking, expense management, and billing processes. This, in turn, increases revenue and profitability for the company.
By tracking revenue leakage reduction, companies can better understand whether the professional services automation software is improving the company’s overall revenue capture and enhancing the ROI obtained by the software.
Delivery improvement tracks the time a business takes to complete projects from start to finish. It showcases the total time that was saved during a project delivery with the help of professional services automation software.
PSA software marks the progress of projects and tasks and lets the team members track whether they are on track or behind on their projects.
Rocketlane’s Interval IQ helps companies track and measure their Time-to-Value (TTV) for their customer projects. By capturing key events and milestones, Interval IQ lets businesses track the interval between their key events, uncovering key insights about the project’s progress and delivery.
It is crucial to clearly define your objectives and expectations when you implement PSA software. Invest some time in determining specific business goals that you want to achieve through the software.
These goals may include improving resource utilization, increasing project profitability, enhancing client satisfaction, or a combination of these factors.
By clearly defining your objectives, you can align your implementation strategy and measure the success of your PSA software adoption.
Provide thorough training to your employees and ensure that they understand the software's features and functionalities. Encourage user engagement by highlighting the benefits and value of the software to their daily work.
Offer ongoing support and create a culture that promotes continuous learning and improvement. By focusing on user adoption and training, you can maximize the utilization of the PSA software across your organization.
Store all relevant information in a centralized system, including financials, resource allocation, and project progress. Doing this helps you access accurate and real-time reporting, which provides valuable insights into project performance, profitability, and resource utilization.
You can use these reports to identify areas of improvement, such as projects that are over budget or resources that are underutilized. This data-driven approach allows you to make informed decisions and take proactive steps to optimize your operations.
Identify manual and repetitive tasks within your project management workflow and automate them using the PSA software. By automating these processes, you can save time and reduce the risk of errors.
Employees can focus on more strategic activities requiring expertise and creativity rather than spending valuable time on administrative tasks.
Automation streamlines workflows, increases efficiency, and improves productivity, ultimately leading to higher profitability.
Utilize the PSA software’s project planning and tracking features to monitor project timelines, milestones, and budgets effectively. With these features, you can create detailed project plans, allocate resources efficiently, and set clear objectives for each project.
Continuously tracking project progress against the established timelines and budgets helps you identify potential bottlenecks, address issues promptly, and make necessary adjustments to keep projects on track.
This proactive approach ensures that projects are delivered successfully and within the defined scope, improving client satisfaction and increasing profitability.
To calculate the ROI for automation, you must determine the net profit generated from automation and the total investment cost.
The formula to calculate the return on investment (ROI) for automation is as follows:
ROI = (Net Profit from Automation - Investment Cost) / Investment Cost * 100
PSA software streamlines and optimizes operations through effective project management, resource allocation, and time tracking. It enables organizations to manage projects from start to finish, ensuring tasks are assigned, milestones are tracked, and project profitability is analyzed.
Additionally, it facilitates resource management, allowing organizations to allocate the right people with the right skills to projects, optimizing resource utilization, and ensuring efficient project delivery.
PSA tools also simplify time and expense tracking, aiding in accurate billing and reimbursement processes. Financial management features, such as budgeting, invoicing, and revenue recognition, provide comprehensive financial analysis and reporting capabilities.
Collaboration and communication tools within the PSA system enhance team collaboration and transparency, streamlining information sharing and project updates. Overall, PSA enhances operational efficiency, resource utilization, project delivery, and profitability for professional services organizations.
PSA solutions offer several key metrics to evaluate return on investment (ROI). Here are the top three professional services automation software ROI metrics:
Rocketlane offers a range of features that can optimize resource management, improve profitability, and enhance customer satisfaction for on-premise and cloud service providers.
By streamlining project management processes, Rocketlane has a huge impact on billable hours, thus increasing the ROI of the tool.
Here are some of the key Rocketlane features that help you grow your business.
Rocketlane’s PSA tool helps forecast resource requirements and enhance resource utilization. This allows you to optimize your resource allocation effectively.
Businesses can create tailor-made project plans in bulk and automate reusable templates. This ensures consistency across all project stages.
Project managers get a 360-degree view of project information with Rocketlane’s PSA software, including project status, milestones, and deadlines. This visibility helps them stay on track with your projects.
Rocketlane seamlessly connects with popular tools like Salesforce, Quickbooks, Adobe Inc, and more. This integration streamlines project workflows and enhances efficiency.
Gain insights and make informed decisions with Rocketlane's insightful reports, dashboards, and analytics. These tools provide valuable data for analyzing project performance and making intelligent business choices.
Rocketlane’s Customer Portal lets clients view project status updates, pending approvals, and tasks they must complete. This improves customer satisfaction and engagement.
A powerful automation tool boosts ROI by simplifying tasks and optimizing team efficiency.
With Rocketlane, gain valuable insights through robust reporting and user-friendly dashboards. Say goodbye to manual processes and welcome streamlined workflows.
Achieve scalability and focus on delivering successful projects. Sign up for the free trial with Rocketlane today!