Cornerstone of Success for Professional Services Organizations
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Cornerstone of Success for Professional Services Organizations

Mark Simon, VP of Technology, Explore Consulting
Mark Simon, VP of Technology, Explore Consulting

Mark Simon, VP of Technology, Explore Consulting

Professional Services organizations face constant pressures to improve efficiency and processes. One of the cornerstones of success is the systems they utilize. Key among those systems are CRM, ERP, and Professional Services Automation (PSA) tools. As cloud-based technologies have disrupted and changed the landscape of traditional IT services, the impact on professional services organizations has been profound with many of the cloud offerings in the space leading the way. With CIOs having so many options for CRM, ERP, and PSA tools; what are some of the patterns becoming prevalent for professional services organizations? How are the adoptions of cloud solutions impacting those firms?

Prof Services Cloud Solution Patterns

As professional services firms move towards cloud solutions three predominant patterns have emerged: Cloud plus on premise, Full Cloud–Best of Breed, and Full Cloud–Single Solution. With a cloud plus on premise pattern it is typical that the core ERP system will remain with a traditional solution such as Sage, Microsoft Dynamics, and Epicor, and incorporate a cloud solution for CRM and/or PSA. This approach is often the first step in the evolution of cloud adoption. While CIOs know that any system migration imposes a significant burden on both operational departments and IT the adoption of a new ERP system for core financials typically has the broadest impact and along with that the most risk. On the other end of the s pectrum , any of the dozens of cloud CRM solutions including leaders like SalesForce or Dynamics CRM Online typically see easier adoption paths for a PS organization. The PSA offerings are led by mature cloud solutions such as NetSuite’s OpenAir and Projector PSA. Any CIO contemplating a mixed cloud and on premise strategy will be reliant on integration for success. While many pre-built connectors exist, their quality and flexibility can vary. Once integration is handled, retaining an existing noncloud ERP solution and utilizing cloud-based CRM and PSA can provide a great path to cloud conversation. A second pattern is a best of breed full cloud approach. With this pattern many CIOs choose SalesForce as CRM due to its position as a cloud leader and widespread familiarity among sales professionals. For ERP, NetSuite holds a strong position as the cloud solution with the widest adoption. Adding a best of breed PSA solution to the solution package often results in the utilization of Projector PSA or NetSuite OpenAir. This solution architecture is reliant upon successful integration for realization of maximized efficiency gains but the strength of market position for these solutions results in numerous options for integration.

The final common cloud pattern for professional services firms is a single product solution. NetSuite and Financial Force PSA are among these few solutions. While the NetSuite OpenAir product was obtained through acquisition and is not implemented on the core platform it is connected via an integration provided by NetSuite. In 2014 NetSuite released a Services Resource Planning module built on the core NetSuite platform along with the existing ERP and CRM functionality. These all-in-one solutions provide notable advantages for CIOs of PS organizations by eliminating the dependency on system integration, thereby greatly simplifying implementation and maintenance.

Cloud Adoption Benefits

There are numerous benefits to cloud solution adoption for professional services companies but at this point the majority of CIOs and technology leaders are familiar with the cost savings by minimizing the reliance upon on-premise servers and their maintenance. Some of the additional benefits for moving to cloud-based solutions can haven even deeper impacts on firm profitability and efficiency.

True cloud solutions hosted in a multi-tenant environment provide key advantages for PS firms over traditional on premise solutions with regards to upgrades and customization. A reason many firms report give to move off existing on-premise ERP and PSA systems is due to being trapped in “version lock.” Non-cloud ERP systems often allow customization through modification of the core code base. While this provides incredible flexibility, it also results in a pitfall for the future. When a newer version of the software is released the pre-existing customizations require merging with the code base of the new version. This lengthens the upgrade and the difficulty of this process can often lead firms to forego future upgrades or avoid customization completely in the future. Cloud-based systems that are architected as multi-tenant solutions will segregate their customization layers from the core “black box.” This will allow product upgrade cycles to occur frequently without impacting customizations. Some flexibility is lost in regards to the breadth and depth of customizations, but the trade-off is a solution that can evolve rapidly and be customized with reduced risk. It is important for CIOs to understand the architecture of any cloud product they are considering and whether they are purchasing an on premise solution installed in a virtualized environment or a true cloud product.

The impact of cloud solutions for PS firms is also seen throughout the quote to cash process with greater efficiency. The sales process benefits from better visibility into the resource availability, easier access to past project estimates to actuals, and better pipeline awareness among other benefits. Financial management is improved as many activities involved invoicing, statements, and A/R communication can be automated relatively easily with modern cloud systems. Easier access to information via a cloud solution can be improved by some PS process changes such as daily entry of time for resources. With those changes realtime data for AR exposure and project burn rates can allow course corrections to occur within days instead of weeks on projects. The scheduling and control of projects are improved through cloud-based tools that are updated in real-time showing constant progress.

CIOs for professional services firms are faced with numerous choices on cloud solutions for their CRM, ERP, and PSA needs. As cloud adoption has increased within the industry several solution patterns have emerged that provide flexibility and evolution paths for PS firms. As those firms adopt solutions, gains in efficiency and processes provided by cloud solutions is leading to improved profitability through greater efficiency.   

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