Guide to Professional Services Automation and PSA Software

Professional services automation (PSA) is at the core of delivering services work, projects, and supporting requirements. This article takes a deeper look at PSA, and those that will benefit from it within Professional, Embedded, and Managed Services Organizations, along with exploring how the right technology paves the way for profitable engagements, satisfied customers, and organizational growth.

What Are Professional Services?

Professional services are provided by organizations that have the expertise and resources to deliver intangible services to clients, rather than a tangible manufactured product. These services can include providing targeted advice and practical direction for achieving compliance with standards and regulations, enhancing workforce optimization, improving client experience, implementing modern technology, and fortifying information security.

There are many services firms changing how they work. For example, by expanding to a managed service model they need to capture and execute on all services type work. They are also looking for ways to increase financial confidence with access to real-time financial and operational visibility. This executive level of access to the day-to-day financial health of the business empowers decision makers to make the right decisions in driving revenue success.

This increase in business enables more information decisions that drive the actions to improve business outcomes. Fortunately for all stakeholders, especially those delivering professional services and those receiving them, there are technology-led approaches helping organizations achieve these fundamental objectives: professional services automation (PSA).

What Is the Services Delivery Lifecycle?

Professional services automation refers to an underlying business process infrastructure, which establishes and enables a structured and standardized approach to the services delivery lifecycle.

While different organizations use various terminology the professional services delivery lifecycle has five core phases:

  • Phase 1 – Development: Collaborating with prospective clients and presenting a proposal that effectively achieves their needs and goals.
  • Phase 2 – Planning: Collaborating with active clients (i.e., clients who have formally entered into an engagement) to create a robust plan that covers budget, schedule, communications, risk management, and other key elements.
  • Phase 3 – Delivery: Executing on the plan, and managing change as required.
  • Phase 4 – Billing: Accounting and billing for all services rendered, including time allocated and all other billable expenses (e.g., travel).
  • Phase 5 – Analysis: Real-time collaboration with clients and other stakeholders to identity areas and opportunities for improvement (more on this below).

It is interesting to note that in the conventional project management lifecycle, the analysis phase typically happens after a project is complete. However, in the professional services delivery lifecycle, this should ideally take place throughout the lifecycle with clients (though this is not always the case if clients do not want to include this billable activity in the scope of work).

According to SPI Research, “professional service automation provides organizations with a solution to efficiently plan, sell, execute and charge for work. PSA gives team members the tools to collaborate and collect knowledge that can be further used to optimize business processes. The net effect of PSA is a more productive and profitable business, as well as improved levels of predictability and client satisfaction.”

This is a solid working definition and a helpful starting point for this inquiry. However, to fully grasp what professional services automation is about, we need to drill deeper into these “tools to collaborate and collect knowledge.

That is where professional services automation software injects business value and – provided that the right solution is adopted – that is a business-critical difference between succeeding and struggling.

Objectives of Professional Services Automation Software

No two service delivery engagements are alike. There are always new challenges to overcome, issues to resolve, and opportunities to pursue. However, there is one core, unifying theme that connects all successful engagements, they all rely on exceptional professional services automation software Professional service automation software enables organizations to manage the end-to-end services delivery lifecycle effectively and efficiently, and achieve the following integrated objectives:

Centralize key processes and optimize end-to-end services lifecycle profitability

PSA software spans the full lifecycle of services engagements from quote-to-cash. Instead of juggling various ad hoc systems and disparate tools, professional, embedded, and managed services organizations can centralize everything that matters – pipeline management, financial management, project and resource management, change requests, operational reporting, and business processes – that provides unified client engagement.

Increase delivery confidence by successfully delivering business outcomes for clients

PSA software brings together project and resource management, configurable workflow automation, and collaboration to enable clients to deliver projects using multiple work methodologies. Additionally, PSA software proactively resolves capacity and staffing issues that affect the ability to deliver on-time and within expectations – which adds up to successful engagements that help clients achieve their objectives.

Establish full visibility that drives decision-making

PSA software improves decision-making and business outcomes with real-time transparency into engagements and the full quote-to-cash cycle. It also provides an authoritative system of record that centralizes and automates data and activities, and leverages analytics to create a single-source-of-truth that supports configurable dashboards and reports. This gives executives and teams visibility into engagement health and status, as well as operational performance metrics.

Read next: The Secret Tools of Service Leaders

Centralized view of business health – AdaptiveWork Executive Dashboard
Centralized view of business health – AdaptiveWork Executive Dashboard

How to Solve Common Problems with Professional Services Automation Software

The lists below highlight how professional service automation software helps organizations solve common problems. We start with a look at operational areas that are shared by PSOs, ESOs and MSPs.

Cost management, revenue tracking, & increasing margins

  • Core problem: Difficult to track and manage costs and revenue.
  • How PSA software helps: Improves financial controls and increases margins.
  • Beneficial outcome: Improves the efficiency of cost management and the accuracy of revenue-tracking, which results in increased margins.

Services opportunities & backlog management

  • Core problem: Difficult to manage the pipeline of incoming projects
  • How PSA software helps: Enhances visibility of the sales pipeline and services backlog
  • Beneficial outcome: Enables proactive planning for pipeline projects through enhanced visibility to sales opportunities and services backlog.

Resource capacity & utilization

  • Core problem: Difficult to forecast staffing needs
  • How PSA software helps: Optimizes resource demand, capacity, and utilization
  • Beneficial outcome: Effectively manages resource capacity, forecasts resource demand, and monitors utilization.

Time & expense management

  • Core problem: Difficulty establishing consistent compliance with time and expense policies.
  • How PSA software helps: Establishes time and expense compliance for operations.
  • Beneficial Outcome: Establishes heightened governance on time and expense administration, which ensures fluidity and sound business operations.

Project management

  • Core problem: Lack of visibility into engagement health and status.
  • How PSA software helps: Enables transparency into project portfolios and core KPIs.
  • Beneficial outcome: Provides a harmonized view of critical project metrics to closely monitor health, schedule, budget, and delivery of services.

Project delivery

  • Core problem: Too many projects are not finishing successfully.
  • How PSA software helps: Enhances collaboration and delivery of client projects.
  • Beneficial outcome: Provides consistent delivery of projects while increasing client satisfaction.


  • Core problem: Billing and receiving are too time consuming and error prone.
  • How PSA software helps: Streamlines billing, while ensuring financial accuracy.
  • Beneficial Outcome: Expedites the processing of precise and timely billing/invoices to reduce DSO and accounts receivable/finance maintenance.

Revenue forecasting and recognition

  • Core problem: Issues with being able to accurately forecast revenue in relation to some solutions providing full Revenue Recognition processes achieving public accounting standards (ASC606 IFRS15).
  • How PSA software helps: Creates scalable and repeatable structure and governance in categorization of revenue recognition methods.
  • Beneficial outcome: Efficient auditable revenue recognition to ensure compliance with accounting standards and provide visibility into profit and loss.
  • Some solutions provide full Revenue Recognition processes.


  • Core problem: Lack of visibility needed to make crucial business decisions.
  • How PSA software helps: Supports better and faster decision-making driven by data analytics.
  • Beneficial outcome: Establishes a single-source-of-truth to consume business-driven data, in order to ensure educated strategic and tactical decisions.

Benefits of Professional Service Automation Software

The lists below highlight how professional service automation software helps organizations solve common problems. We start with a look at operational areas that are shared by PSOs, ESOs and MSPs, and then look at some operational areas that are specific to MSPs.

Below is a high-level summary of the benefits of using PSA solutions:

  • Centralizes all data and activities and gain real-time status on engagement success, so that leaders know which client projects are succeeding – and which are at risk.
  • Facilitates effective communication and collaboration between sales, finance, and service delivery teams, and ensures consistent messaging is provided to customers.
  • Captures actual time and expenses, to enable revenue forecasting and recognition based on flexibly of revenue methods.
  • Optimizes resources to meet or exceed client satisfaction targets and ROI expectations.
  • Generates real-time visibility – from quote to cash – in order to guide project initiatives, track financial KPIs, and drive continuous improvements across numerous services delivery workstreams.
  • Grows top-line services revenue and improve margins.
  • Delivery confidence – successfully deliver business outcomes to clients
  • Transparency of all lifecycle processes and real-time visibility, to put decisioning in the hands of key services and organization leaders for better, more immediate improvement towards maintaining and increasing profitability.

What Organizations Use Professional Services Automation Software?

There are three types of organizations that use and benefit from professional services automation solutions:

Conventional professional services organizations (PSOs)

PSOs require powerful services delivery solutions that seamlessly handle opportunity management, financial management, and workstream delivery. This supports accurate forecasting and real-time monitoring of services – which drive accurate revenue recognition and better profitability.

Embedded services organizations (ESOs)

ESOs are typically part of larger product-based companies and provide consulting services related to those products. They need a single integrated view of the organization’s financial operations, and a real-time snapshot of how the organization is performing against benchmarks – so that services leaders can identify areas of improvement and growth, while keeping an eye on profitability.

Managed service providers (MSP)

MSPs commonly provide ongoing support through a subscription-based revenue model. Management and visibility of those customer service-based subscription “contracts” from service level timeline, service satisfaction and margin perspective are critical for these providers.

Read next: 8 Reasons Why You Need PSA Software with Business Intelligence

Financial visibility across the business – ChangePoint Executive Dashboard
Financial visibility across the business – ChangePoint Executive Dashboard

What Professionals Use PSA Software?

PSA software is used by a range of professionals, including (but not limited to):

  • Professional Services Executives
  • Practice Leaders
  • Delivery Managers
  • Resource Managers
  • Customer Success Managers
  • Service Consultants
  • Finance Leaders

Questions to Ask When Evaluating Which PSA Software is the Best Fit for Your Organization

These seven questions will support your research and evaluation efforts when choosing PSA software that is right for your organization:

  1. Does the PSA solution map to your organization’s end-to-end services delivery lifecycle?
  2. Does the PSA solution provide “real-time” analytics that cover the KPIs, insights, and operational reporting that your organization needs?
  3. Does the PSA solution integrate with your organization’s CRM and ERP systems?
  4. Does the PSA solution manage your billing method and financial forecasting needs?
  5. Does the PSA solution cover your execution management methodologies?
  6. Does the PSA solution provide the resource capacity planning and staffing management that your organization needs?
  7. Does the PSA solution enable you to efficiently collaborate with clients?

What’s Next?

Adopting a PSA solution is not a one-time transaction. Invariably, your leaders and teams will need a full range of support: everything from strategic advice to hands-on adjustments.

While it is important to pay close attention to what prospective vendors have to offer – for example, by experiencing a demo – you also want to “go behind the scenes” and learn about their successful clients by reading credible client reviews and analyst reports. The vendor behind your PSA solution must be an active partner who clearly understands and consistently demonstrates that your success is their success.

Looking for more insights on services automation and professional service automation solutions? Contact us to discuss how Planview can help make your organization’s engagements more predictable and profitable.

Meet our author
David Blumhorst

Director of Product Management

David Blumhorst is Director of Product Management at Planview, where he oversees the Professional Services Automation go to market strategy and the ChangePoint SA product. David is an experienced technology executive that has served in a variety of roles throughout his career. These include running products and working with Marketing on GTM efforts, as well as serving as VP of professional services organizations. Earlier in his career, David managed and consulted for PMO departments at Fortune 1000 companies, served as CIO at mid-size companies, and managed Finance at startups through mid-market firms. David has made a career out of combining his business and technology experience to create high-tech solutions to business problems.