5 key challenges faced by professional services organizations

5 key challenges faced by professional services organizations

The professional services industry faces many challenges such as intense global competition, changing customer behavior, talent constraints, and increasing project complexity. In order to survive and grow, project services organizations need to address industry challenges to ensure they deliver projects successfully on time and on budget. Successful organizations rely heavily on their business technology to increase agility and streamline business operations. This post will take a look at five challenges faced by professional services organizations that can negatively impact project delivery.

#1 Lack of project visibility

A major challenge that professional services organizations face is project visibility. Different teams may use different tools to update project status resulting in incomplete status reports and a fragmented picture of the project. This lack of standardization when monitoring KPIs creates further uncertainty when you need to align project status and financials and can significantly impact profitability. If managers don’t have a clear understanding of the status of a project, they risk the project being delivered late and over budget. Professional services organizations rely on accurate project reporting to bill customers and report revenue. However, disconnected systems may lead finance and operational teams to see unreliable information, leading to an unrealistic view of project health, wasted resources, and more risk.

With an industry-tailored ERP, CRM, or PSA solution, all your project and financial data will be centralized in a single solution, empowering your organization to maximize profits and create greater organizational efficiency. With a real-time view into your professional services organization’s project and financial performance, you can actively monitor and manage revenue, expenses, and profitability more efficiently over the life of a project. Seamlessly extract vital information to gain real-time insight into business health with up-to-date KPIs and customer data in project dashboards, reports, and Gantt charts. This access to accurate and real-time data improves project collaboration and supports timely, data-driven decisions across your organization.

#2 Poor collaboration

Poor communication among team members can have a negative impact on project delivery. Using separate systems to communicate important information such as approvals or status can make it difficult to track updates. It creates the possibility of mismatched information between various reports that can impact profits. Disjointed collaboration can lead to delayed projects that may go over budget as tracking down accurate status figures becomes time-consuming and error-prone.

Empower your teams from marketing and sales to service and delivery to communicate effectively through an integrated system that provides up-to-date statuses and sends out automatic alerts for key project information. Easily maintain accurate, up-to-date status information to optimize resource management and ensure your projects are delivered on time, and on budget.

#3 Improperly managed resources

Resources are often the most expensive part of a project yet many professional services organizations struggle to accurately staff projects because assigning the right resource to the right project involves a complex set of variables and changing circumstances. Additionally, maximizing the number of billable hours per employee is critical to maintaining cash flow and increasing profits. Project managers need to be able to easily determine which resources are available and match the best skill sets to the tasks required or they run the risk of misaligning bookings and running inefficient projects. Assigning the right resource to the right job is essential to staffing a project and with the right automation and monitoring tools, businesses can keep their employees working billable hours.

By implementing a powerful business solution that integrates ERP, CRM, and PSA systems, project managers can optimize resource utilization and billable hours. Easily create profiles of all your billable resources and store skillsets based on proficiency models that are easy to set up and adaptable to your unique business needs. Leverage unified scheduling for up-to-date visibility across all your projects and locations so you can match the right people to the right projects. Additionally, you can anticipate future resourcing needs and quickly identify which skills you are lacking.

#4 Inaccurate accounting and billable hours

Disconnected financial systems contribute to inaccurate accounting and billing errors that affect revenue recognition and the services team’s performance during a project. These separate systems also limit the ability to automate certain areas of a project like auto-generating invoices by implementing billing rules during the initial project setup. With a fully integrated business management solution, you can create rule-based accounting profiles that are tailored to your project types. These rules will save you time by automatically setting the billing methods in new contracts when deals are won. Then, invoice creation can be done manually or automated according to a pre-determined schedule with certain line items being auto-populated based on the contract.

A major challenge facing professional services businesses today is financial management, especially cash flow. With a financial management solution from Rand Group tailored to your industry’s unique needs, you can unlock your organization’s full potential to drive financial performance. Connected business solutions help you maximize profitability and easily manage finances at every project phase. Easily automate most of your billing and invoicing processes to eliminate the risk of human error and payment delays.

#5 Labor shortages

Professional services operations depend on highly-skilled, educated, and experienced industry professionals to solve complex customer challenges. There are lots of opportunities for growth within the professional services industry, however, many organizations struggle to attract and retain high-performing staff. By adopting professional services automation software you can anticipate future needs by quickly identifying which skills you are lacking and deploying the best hiring strategies to avoid delays and minimize hiring costs. However, once you attract top talent, you will need to adopt strategies to retain and optimize their utilization. Professional services firms can invest in their resources with ongoing training and innovative work policies that create rewarding work cultures to maintain and develop the talent pool.

Next Steps

A powerful ERP, CRM, or PSA solution from Rand Group is designed to help your professional services-based business to simplify and standardize operations, encourage collaboration, optimize resource utilization, and boost project visibility. Rand Group is an experienced solution provider that can help you select, implement, then adopt the best software or software solutions for your professional services business. Our team will also ensure that your software seamlessly connects with the rest of your technology stack and that all users are trained on best practices. To learn more, contact us today.

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