Professional services (PS) businesses have more choice than ever when it comes to technology. However, deciding whether to invest in enterprise resource planning (ERP), customer relationship management (CRM), or professional services automation (PSA) software can be confusing.
While all three types of systems can benefit businesses by automating processes and centralizing data, each serves a unique purpose. To help you make an informed decision about which solution is best for your company, let’s look at their differences and similarities.
WHAT IS ENTERPRISE RESOURCE PLANNING (ERP)?
As the name suggests, ERP software is designed to facilitate strategic resource planning and management for large companies. While ERP solutions contain accounting and general ledger capabilities, they are not just accounting solutions. ERP platforms provide process automation and create a central database to extract financially-driven organization-wide insights. Think of them as a complement to accounting solutions, expanding on the scope of an organization’s financial management capabilities. ERP helps the finance team, and the business as a whole, better understand how departments, projects, and resources—whether financial, human, or natural—are performing against financial goals.
Most ERP systems let you choose between a wide range of modules depending on your company’s unique needs—including financial management, human resources, project management, marketing automation, and more. Users can select the best tools for their processes and responsibilities. Plus, ERP software supports substantial scalability.
Many PS firms choose ERP software to enhance their ability to juggle multiple processes and projects in an increasingly-complex industry. However, ERP software wasn’t designed for services-based operations. Getting what you need out of an ERP system may require you to either customize the software or modify your processes to fit the technology.
WHAT IS CUSTOMER RELATIONSHIP MANAGEMENT (CRM)?
Customer relationship management (CRM) software gives companies a single place to track, manage, and analyze interactions with existing customers and prospects, with the goal of strengthening customer relationships. While CRM tools have evolved over the years, they’re still primarily focused on external business relationships—helping you better understand win-loss ratios in sales initiatives, which in turn informs internal changes to teams and processes.
A CRM system is usually part of a larger suite of customer experience (CX) applications, covering everything from marketing to customer service. Tracking additional customer interactions, such as emails, calls, downloads, and purchases over time helps teams better understand how that relationship is changing.
For PS firms, understanding how close you are to making a sale, what led to a closed-loss, and how relationships with current customers are evolving will help to strengthen the sales pipeline and ensure successful renewal when contracts are up. Ultimately, PS organizations succeed or fail based on customer relationships. CRM software can play a crucial role in helping you manage those interactions.
WHAT IS PROFESSIONAL SERVICES AUTOMATION (PSA) - AND WHAT IS A PROFESSIONAL SERVICES CLOUD
PSA software is designed to help people-powered organizations plan, measure, and manage the lifecycle of every project, automating repetitive tasks to streamline processes and make project delivery more predictable. However, in recent years the industry has evolved significantly. PS firm needs have surpassed what’s possible with traditional PSA software—which has led to the rise of the Professional Services Cloud.
A Professional Services Cloud (PS Cloud) is a modern, cloud-based system that delivers a complete set of vertical SaaS solutions, purpose-built to increase productivity and ensure better outcomes for your teams and clients. Connecting across the entire professional services value chain, a PS Cloud orchestrates resource planning, service delivery, time tracking, and project accounting. Centralizing PS functions provides the necessary perspective to keep your skilled workforce and client-facing work aligned.
People-powered organizations searching for the level of coordination promised by PSA tools but in need of a modern solution equipped for increasingly complex everyday business are turning to this new way of working.
KEY FEATURES OF ERP, CRM & PROFESSIONAL SERVICES CLOUD SOLUTIONS
ERP, CRM, and PS Cloud solutions are all designed to support and coordinate business processes. While all three types of software can deliver standout support and meet modern needs, each serves a specific purpose—with unique areas of support. See below for a comparison of the three.
| ERP | CRM | PS Cloud | |
| Resource Utilization | YES | NO | YES |
| Client Communication | NO | YES | YES |
| Project Management | YES | NO | YES |
| Team Collaboration | NO | YES | YES |
| Business Intelligence | YES | YES | YES |
| Financial Management | YES | NO | YES |
COMPARING STRENGTHS AND WEAKNESSES
Looking at the crucial differences between ERP, CRM, and PS Cloud, it’s important to know what’s missing from each to help you better position the solutions within the context of your business needs.
ERP: Focused on finance
As the goal of ERP systems is to measure and support financial planning, they often lack front-office capabilities. This includes customer communications and project delivery data. As a result, many companies use both an ERP and a CRM solution.
PS firms primarily use ERP software to measure how their teams are performing against budgets and determine what adjustments need to be made to maintain profit margins. The major business impact is a greater understanding of financial performance and more informed decision-making regarding spending, budgets, and scaling—all back-office functions.
CRM: Front-end facing
Today’s CRM software solutions are designed to create a customer data repository, storing information about all of a company’s customer interactions as well as analytics tools to understand sales team performance and customer satisfaction. However, as a front-end software system, CRM tools lack data and analysis about internal team performance.
PS firms primarily use CRM software to better understand success and failure when it comes to sales and customer success teams. CRM solutions provide information about sales cycles, customer service tickets, and other key processes that have to do with customer and lead interactions. As such, the primary impact is a better understanding of customer interactions for stronger sales processes.
Professional Services Cloud: Filling the gaps
As the next step in the evolution of PS technology, the PS Cloud is designed for services-based businesses, where success is dependent on revenue-generating, client-facing projects. This presents a common imperative for services leaders—they need to find technology that aligns efforts across the services delivery lifecycle and surfaces context about the impact of decisions on profitability, client satisfaction, and employee retention.
Unlike ERP and CRM software, which support a broad range of users, PS Cloud solutions specifically target the unique needs of the professional services industry. A PS Cloud can help you balance both front- and back-office requirements, improving project and resource management as well as enhancing customer interactions—without sacrificing the well-being of one for the other. With a PS Cloud, you can achieve well-balanced growth and take a more holistic approach to company health.
WHICH SOLUTION IS RIGHT FOR YOUR PROFESSIONAL SERVICES BUSINESS?
While most professional services businesses will actually use all three of these solutions in their technology stack—benchmark data from Service Performance Insight shows that all three types of solution are used by at least 75% of surveyed services organizations—knowing which solution to prioritize based on your current challenges and opportunities is important. An honest assessment of your current business needs and long-term goals paired with an understanding of each technology’s strengths and weaknesses will help you make an informed decision about whether ERP, CRM, or PS Cloud will benefit your business the most.
Why choose ERP?
Businesses that need greater insight into and control over their back-office departments will likely find the most support from ERP software. Any PS business desiring greater internal coordination will find ERP to be a helpful tool for complex business processes.
Why choose CRM?
If you’re lacking visibility into sales cycles and customer communications, CRM tools will deliver deep, trustworthy customer insights that your teams can’t extract on their own. This is the front-office support you need to stay competitive in the market.
Why choose Professional Services Cloud?
If you’re looking for robust coordination between front- and back-office and capabilities to support the needs of both your workforce and your customers, a PSA solution likely makes the most sense. SPI Research recommends that any services organization with more than 20 employees utilize PSA. The PS Cloud moves beyond the functionality promised by PSA tools to address more complex business needs.
DISCOVER WHY PS LEADERS ARE CHOOSING THE KANTATA PROFESSIONAL SERVICES CLOUD
The Kantata Professional Services Cloud is designed to fill the gaps left by traditional ERP, CRM, and PSA solutions. Empower your resources and deliver the high-quality projects your customers demand, with a Kantata solution tailored to your unique needs.
To learn more, schedule a call with a Kantata representative or click on the Live Chat button below for 24/7 support. We look forward to discussing your needs.
‘“Kantata is all-encompassing; we manage our entire project lifecycle in Kantata. From the day we decide to bid on a project all the way through the final invoice, all activity is managed in one place. That was a huge benefit for us.”’ — SHANNON HARRIS, VICE PRESIDENT OF FINANCE AND OPERATIONS, METOVA
DIG DEEPER
To learn more about ERP, CRM, PSA, and the Kantata Professional Services Cloud, check out these articles: