What is Professional Services Automation (PSA) Software?

Professional Services Automation applications help professional services providers manage client engagements throughout the project lifecycle. A project starts when a sales opportunity is created, the deal is closed, and resources are allocated to deliver the work. The lifecycle nears completion when invoices are issued and cash is collected. 

Using PSA software empowers services organizations to establish a consistent process for planning, managing, and measuring the performance of each project throughout its lifecycle. By centralizing business processes and data, services can be delivered more predictably, and repetitive manual processes streamlined or automated. It is often seen as analogous to Enterprise Resource Planning (ERP) software, and PSA is sometimes referred to as ERP for services organizations.

Common PSA capabilities include the following: 

• Accounting 
• Billing, Invoicing
• Calendar Management
• Customer Access (e.g., through a Customer Portal)
• Team Collaboration 
• Document Management
• Project Management
• Proposal Generation
• Resource Management
• Software Integrations (e.g., to a CRM)
• Time and Expense Tracking

Organizations delivering billable, client-facing work stand to benefit the most from PSA software. By centralizing project delivery data, PSA software solutions can provide visibility into performance metrics such as revenue, cost, utilization, and profit margins. Because the dollars involved in professional service delivery grow with headcount, the financial benefits of a well-implemented PSA solution scale with company size.

PSA software was originally developed for the professional services sector, which includes consultants, lawyers, professional services teams, and others. The software is now earning wide adoption across several project-based industries:

• Information Technology (IT) Services firms
• Business Consulting firms
• Marketing and Communications agencies, by both customer-facing agencies and internal departments
• Software & Hi-Tech firms that use embedded professional services organizations to implement their products and enable their clients
• Architecture, Engineering, and Construction (AEC) firms

While the advantages of a specific PSA solution depends on its capabilities (and how they are used), the central benefit of PSA software is enabling people who are responsible for business performance to manage and measure service delivery at scale. Reporting features enable account and resource managers to identify trends and allocate staff to match demand. Executives can see where the business is performing well and where there are opportunities to improve certain areas. 

Effective PSA applications help organizations do three things: 

1. Easily Manage Projects (e.g., by reducing spreadsheet time) 
2. Optimize Resource Use (e.g., by improving utilization rates) 
3. Drive Stronger Margins (e.g., through greater reporting and visibility) 

According to research from Service Performance Insight (SPI), businesses using a PSA solution have a distinct advantage over those that don’t. Business leaders surveyed by SPI say that they have seen 8.2% absolute improvement in employee billable utilization and 6.1% improvement in project margin since adopting PSA, with revenue leakage and time to generate invoices cut nearly in half. With these improvements, among many others, PSA adoption drives an average net present value of approximately $32.0 million across five years for a business with 376 employees, according to ROI analysis conducted by SPI. Because the delivery of services is where professional services organizations make their money, and because PSA is the primary solution used by project managers and others responsible for services delivery, SPI recommends that any organization with more than 20 employees utilize PSA.

Using PSA tools is instrumental in helping organizations gain control over their project, financial, timeline, and resource data. Organizations often choose to adopt and/or upgrade their PSA tools when they have the following needs:

• increase in headcount
• demand increases
• range of services offerings needs to grow to meet client needs, 
• expanding their market geographically
• projects, deadlines and timelines become more numerous and difficult to manage using manual processes

A great PSA tool keeps decision-makers out of spreadsheets and more engaged with the contextual insights and data they need to make decisions that drive greater profitability.

Like just about any software, PSA software can be purchased commercially off the shelf (COTS) or built in house. Both require implementation, business process reengineering, and user training, all of which incur costs in staff time or budgets. 

COTS solutions may have limited integrations and limited customizability; organizations opting to purchase PSA software must select an option that fits a majority of their feature needs, integrates with the systems they already use, or offers an API to build their own integrations. 

Homegrown solutions come with their own limitations, including costly maintenance, upgrades, and integration build-out costs. Homegrown solutions are best suited for organizations that have a great need for custom functionality combined with significant internal expertise and financial  resources to sustain a custom software application indefinitely. 

Additionally, in spite of the prominence of professional services in the category name, it can be hard to find Professional Services Automation solutions that are purpose built for the current needs of services organizations. When Kantata commissioned Forrester Consulting to ask services leaders about the future of professional services technology, more than one-third of respondents who had adopted PSA did not identify their PSA solution as a vertical SaaS solution tailored specifically to the needs of professional services organizations.

Traditional PSA tools emerged from a business need for efficient financial management and project accounting. Initially, they were developed as financial department-focused utilities, aiming to simplify and automate invoicing and historical business performance tracking. While that focus can be useful to a degree, it provides a rear-view mirror perspective, often lacking the forward-looking vision that services businesses require for growth and sustainability. While many PSA suppliers have transcended the limitations of that financially-focused legacy, some of the PSA solutions currently available in the market have failed to keep pace with the evolving priorities of contemporary professional services organizations.

Prospective buyers attempting to navigate the PSA landscape today can feel like they are maneuvering through a labyrinth filled with multiple dead ends. The category has become inundated with many one-size-fits-all, horizontal solutions that provide some tacked on PS-specific features. These additions do not align with the scalability required by the businesses that deploy them.

Because of these disadvantages, many suppliers and buyers across the market are now embracing the Professional Services Cloud concept, which brings the proven idea of vertically-oriented industry clouds to a highly specialized professional services industry that has long needed it.

The people-centric businesses in the professional services industry require people-centric solutions that cater to their unique needs. Professional Services Cloud solutions have emerged to meet that need, equipping services organizations to manage their operations through a lens that is not limited to a focus on financial metrics. 

A Professional Services (PS) Cloud delivers a complete set of vertical SaaS solutions that are purpose built to make PS organizations more productive at every step of the professional services value chain. This ensures better outcomes for their teams and clients. A PS Cloud synchronizes processes and data that often remain siloed, orchestrating resource planning, service delivery, time capture, and project accounting to provide businesses the future outlook they need to keep their skilled workforce and client-enabling work aligned. 

Unlike traditional PSA tools built backward from Enterprise Resource Planning needs, PS Clouds shift the focus from mere historical financial performance to a holistic understanding of potential business opportunities and challenges. By helping PS leaders understand the impacts service delivery has on the wide array of people that make the business successful, including employees, partners, and clients, PS Cloud solutions improve not just billable utilization and margins, but also employee engagement and client retention. Consequently, businesses avoid the substantial costs associated with replacing top talent and valued clients.

Professional services automation has helped countless organizations around the world cope with an increasingly challenging industry, but the PS Cloud is helping those same businesses accelerate and thrive.

Applications in the PSA and PS Cloud software categories typically advertise similar capabilities (e.g., accounting, resource planning, project collaboration) but vary widely in the depth of those capabilities. User interfaces also differ significantly, which has implications for user adoption and team morale.

At a minimum, the system should:

• Include details about current and future resource availability to better understand who is available to take on project work at the task level
• Track skills and proficiencies to improve the matching of people to projects and key financial data related to resources (e.g. cost and bill rates) that will impact the profitability of projects 

To select the best PSA software for your services team, start by identifying your organization’s objectives and needs. Try to state your requirements in terms of business objectives (e.g., “Organization will use this PSA to see who is spending time on which projects”) rather than in overly prescriptive features (e.g., “Organization wants a button that generates a PDF of today’s time entries”). 

Next, prioritize your requirements into must-haves and nice-to-haves. You will likely need to make tradeoffs between different applications that offer different capabilities. Remember to consider qualitative requirements like user experience, since this will impact the success of your software implementation.

Once you have a draft list of requirements, you can begin evaluating software providers.  Software comparison sites like G2, GetApp and Capterra provide lists of leading applications and reviews where current customers describe their experiences. 

Once you’ve developed a list of vendors to consider, schedule personal demos to see how the applications perform. After each demo, ask yourself (or your team) core evaluation questions. Here are some to get you started: 

• Does this solution meet my team’s key requirements?
• Would my team enjoy using this solution on a daily basis?
• How would my stakeholders access the solution? (Can I get mobile access?) 
• How does the solution handle security? 
• How does the solution link to my other applications (e.g., accounting, billing, CRM, sales)?
• What tracking functions (e.g., budget, invoices, milestones, resource utilization) does the solution offer? 
• How does the solution handle the unique aspects of my business (e.g., custom fields)? 
• How easy does the solution make it to build custom reports? 
• How does the solution display information? Can my stakeholders easily spot trends?

Now that you’re familiar with what professional services automation software is and what it can do for your people-powered business, you’re probably wondering which software is best for your organization. Let’s take a look at the top five PSA software solutions available today, including their top features, pros and cons, and what type of businesses they fit best.

Our Top 5 PSA Software Picks:  

• Certinia: A good choice for companies that are fully invested in the Salesforce ecosystem.
• NetSuite OpenAir: A strong fit for firms using NetSuite ERP or planning to adopt Oracle solutions.
• Workday PSA: Good for firms looking to consolidate their tech ecosystem around Workday HR and/or Finance products.
  
• Planview ChangePoint: A robust tool with streamlined workflows for companies looking to support agile teams and work.
• Kantata: The best professional services automation software for services-based organizations looking to increase productivity and profitability.

CERTINIA

Certinia is the professional services cloud solution from Salesforce, combining PSA, ERP, and customer success into a flexible and robust platform. With Salesforce CRM and Certinia PS Cloud on the same platform, sales teams, finance teams, and resource managers can get real-time insights into project information. Up-to-date reporting makes it easier to keep projects on schedule and customers happy. 

Top Features of Certinia

• Resource Management
• Sales Engagement 
• Project Management
• Project Financials 
• Time & Expense Tracking
• Forecasting

Pros:

• Deep native Salesforce integration, making it valuable for enterprise organizations immersed in the popular platform.
• Highly configurable and easy to use, especially for those familiar with Salesforce.
• Strong project accounting and revenue recognition capabilities.
• Tightly unified sales-to-services workflows and automated opportunity-to-project creation.

Cons:

• Requires Salesforce platform licensing and relies heavily on Salesforce admin/developers, with setup and configuration complexity slowing down deployment and time-to-value
• Toolkit approach lacks native proposal functionality, and sacrifices seamless integration and real-time sync between opportunities, proposals, and projects
• Requires additional modules and significant customizations to connect Sales-to-Delivery, reducing efficiency and transparency
• Disjointed forecasting and financial visibility and misalignment between PSA and ERP systems slows down decision-making and stands in the way of efficiency

Who is Certinia For?

Certinia is a strong PSA software choice for enterprise organizations invested in the Salesforce ecosystem, and: 

• Wanting a solution that offers all the functionality professional services automation encompasses in a familiar UX for Salesforce users
• Not in the market for a fully integrated, vertical professional services cloud solution

NETSUITE OPENAIR

NetSuite OpenAir is the cloud-based professional services automation solution from Oracle NetSuite, a popular ERP platform. Bringing together multiple project and resource management modules to live on the ERP, NetSuite OpenAir offers a unified way for professional services organizations to run their businesses without relying on disconnected systems and spreadsheets.  

Top Features of NetSuite OpenAir

• Project Accounting & Management
• Resource Management 
• Time & Expense Management 
• Reporting & Analytics
• Project Budget Management 

Pros:

• Seamless integration with NetSuite ERP as well as Oracle and SAP, connects to Salesforce or NetSuite CRM tools as well as collaboration tools like Slack and Google Workspace
• Anytime, anywhere cloud access with dedicated mobile app enables timely, accurate financial tracking and project management
• Real-time project execution insights support more successful delivery
• Can be used for different sizes projects, teams, and organizations, with the ability to deploy across multiple locations and business units

Cons:

• Costs run higher than some PSA solutions in terms of initial setup, ongoing subscription fees, and additional modules needed to achieve full functionality
• Configuration and implementation can be complex, delaying time-to-value and limiting functionality, with developers needed for ongoing updates and changes
• Data migration from existing systems requires significant effort, resulting in possible disruption that can impact the business
• New users may find the UI clunky and cumbersome, which can lead to frustration and lower adoption rates, and necessitates training to use tools effectively

Who is NetSuite OpenAir For?

NetSuite OpenAir is a good fit for professional services organizations already invested in the Oracle NetSuite ecosystem and:

• Looking to support the entire project lifecycle and gain real-time visibility into project activities and resource availability
• Requiring support for multi-currency billing and invoicing as well as robust time tracking and project accounting capabilities
• Not in the market for a fully integrated, vertical professional services cloud solution

WORKDAY PSA

Workday PSA is the professional services automation solution from Workday, which also offers ERM and HCM solutions. Bringing together human resources, finance, and project management into a single, unified platform, Workday PSA offers highly accurate cost/revenue forecasting capabilities using HR and payroll data as well as strong compliance and financial governance functionality.

Workday PSA Top Features

• Human Capital Management 
• Services CPQ
• Project Execution 
• Project Financials 
• Reporting and Analytics 

Pros:

• Automates a wide range of core business tasks, from project budgeting to billing, freeing up time for higher-value work.
• Enables time, expense, and task entry and tracking via mobile app, and corporate credit card management including separation of personal expenses.
• Shared look and feel across PSA, HR, and ERP, as well as other Workday tools simplifies use, resulting in higher adoption rates.
• Option to bundle tools for a discounted rate makes it more accessible for organizations already using Workday HR, ERP, or Business Planning products.

Cons:

• Security levels impede agility and flexibility, with even minor changes requiring administrative approval. 
• Scheduling features can be clunky, time-consuming, and tend to freeze; no autosave feature means data may be lost.
• Really a series of connected modules rather than a mature professional services cloud solution.
• Lacks the ability to calculate project risk—a critical consideration for any professional services organization, particularly during times of economic volatility.

Who is Workday PSA For?

Workday PSA is a good fit for businesses that have already bought into other Workday products, and are:

• Seeking strong compliance and cost/revenue forecasting capabilities 
• Needing to manage skills more than projects and resources
• Not looking for an agile solution with an intuitive UI or deep customization

PLANVIEW CHANGEPOINT

Planview ChangePoint services automation software is the foundational solution in Planview’s PSA solution. Bringing together project, resource, and financial management provides deeper visibility across the entire project lifecycle, from opportunity to revenue realization. Firms can use this solution to streamline processes and improve profits.

Top Features of Planview ChangePoint

• Opportunity Planning  
• Project & Work Management
• Resource Management
• Financial Visibility
• Analytics & Reporting

Pros:

• Extends visibility into software development teams by integrating with agile software, including Azure DevOps and Jira.
• Gives users anytime, anywhere access via mobile app for easy time and expense tracking.
• Connects to enterprise tools including Salesforce, SAP, Microsoft, Oracle, and ADP.
• Adheres to stringent security and compliance standards for stress-free auditing and privacy assurance.

Cons:

• Dated interface, with page-loads, updates, and performance often lagging, and no ability to customize look and feel to match the brand, including colors.
• Data updates may rely on an overnight engine run, so not all data is real-time—which makes reporting less accurate and therefore less valuable.
• Basic tasks such as time entry, rate changes, and staffing can be difficult and time-consuming, and only one person can make configuration changes, leading to bottlenecks and reducing agility.
• Customer collaboration requires an additional tool (ProjectPlace) and sharing is limited to Kanban boards.

Who is Planview ChangePoint For? 

Planview ChangePoint is a good choice for enterprise service organizations using Planview portfolio management and other products, and:

• Looking to consolidate around one vendor by extending core systems. 
• Not worried about ease-of-use, time-to-value, or a modern, intuitive experience that doesn’t rely heavily on IT. 

KANTATA

Kantata professional services automation software is purpose-built for people-powered firms looking to optimize the entire services delivery lifecycle to operate more efficiently, scale faster, and achieve measurable results. Customizable templates and permissions enable investment in a single tool that solves all of your pain points with a modern, intuitive user experience. Combining real-time data with actionable insights enables smarter decisions, reduces risk, and enhances agility. Unlock workforce potential, deliver predictable value, and increase billable utilization and profit margins.

Top Features of Kantata

• Project Management 
• Resource Management 
• Financial Management 
• Business Intelligence 
• Collaboration & Feedback

Pros:

• Pure-play provider, purpose-built for the modern professional services organization, with 95% forecast accuracy for greater financial confidence.
• Granular resource planning, AI-powered scenario forecasting, and sophisticated resource optimization to support margin expansion and growth goals.
• Tool-agnostic integration capabilities fit seamlessly into your existing tech ecosystem with real-time sync between opportunities, proposals, and projects. 
• Faster time-to-value, lower TCO, and quicker ROI, with minimal IT dependence—no need for code-based customizations.

Cons: 

• Due to comprehensive capabilities, new users will require training to make the most of all the platform has to offer.
• Fewer customization options to preserve process integrity compared to some professional services automation solutions.
• May not be ideal for teams in the market for basic or standalone tools.

Who is Kantata For?

Kanata is the best choice for firms handling client-facing, revenue-generating, services-based projects, and: 

• Looking to gain an in-depth, real-time view of project status, resource utilization, and overall financial health in one centralized solution.
• Wanting actionable insights into employee and client sentiment data alongside budgets, actuals, and other critical operating metrics.
• Needing to quickly and accurately respond to real-time reports. 
• Looking to drive ongoing optimization and improvement.

If you are ready to start evaluating professional services automation software, you can schedule a call with one of Kantata’s representatives to discuss your organization’s needs. We are also available to answer questions 24/7 by clicking the Live Chat button on the right. We look forward to speaking with you!

“I wish I would have moved to Kantata sooner. There were a lot of blind spots previously, and Kantata gives you the tools and the data you need to be able to run your business.”

– Corey Ariss, VP of Operations & Technology, Hakkoda

To learn more about PSA, visit these articles:

• Wikipedia’s “Professional services automation”
• Service Performance Insight’s “Professional Services Automation End User Survey”
• G2’s “Best PSA Software”
• GetApp’s “Best Online PSA Software”
• TechRepublic’s “Choosing a PSA Software: What Should It Do For You?”