Managing a growing consultancy with scattered tools and spreadsheets can quickly become overwhelming and inefficient. Professional services automation for consultancy growth helps bring everything together—projects, people, and finances—into one system. With improved visibility, streamlined processes, and less manual work, firms can scale faster, cut costs, and deliver more value.
If, like me a few years ago, you have not heard of PSA, you may find the data and processes of your firm are a combination of spreadsheets, apps, Office documents, and a few storage platforms like Drive or DropBox. If you’re technologically minded, you may have connected some of these with software like Zapier or IFTTT to link processes.
Yet, you may also notice some integrations are unreliable, manual interventions increase with growth, and app costs rise ever skywards. A growing consultancy generates a large, complex data ecosystem it must manage effectively to remain efficient, timely, and minimize costs.
Importantly, most, if not all, of these data are interdependent: an upcoming project needs resourcing, planning, reporting and managing, and each of these might trigger other processes such as recruitment, investment or sales.In the early stages of growth (say 1- 5 employees), the major questions around profitability, pipeline, forecasts, and project progress, can often be answered from the heads of the founders.
But soon, an increasing number of disparate, stand-alone apps create disconnected data silos teams cannot easily analyse or present properly.
A number of problems often arise:
- Partners do not have quick and accurate answers to major strategic questions
- Directors spend too much time answering questions which should be provided automatically
- Data is inconsistent and updated in different ways at different times
- Data security becomes a threat when different people in different places access it without control.
- The dependencies between pipeline, people and profit are not always clear and quantified
- Clients have limited visibility of the project data that is important to them.
If this sounds familiar, explore integrated systems for professional service firms to manage processes and data, from tasks to billing.
Many consultants who left large companies may say, “We had one called ERP, and we spent £60m rolling it out.” Fortunately, Software as a System (SaaS) means that the pricing of PSAs is cheap. Avaaza, for example, offers a free PSA service for an individual, followed by adding on additional users for around $5 a month.
PSA software aims to provide better visibility, interconnectedness and efficiency of data and processes across organisations and their clients. Both my sample and other research demonstrate that PSA correlates with better outcomes for the consultancy firm.
In my own sample, those consultancies which used PSA achieved lower operating costs and faster growth (though the sample size was not large enough for a significant relationship).
In other research, SPI (2019) found that the use of PSA was correlated with:
- 17% higher revenue growth due to better staffing
- 50% higher revenue per project
- 31% increase in revenue from new clients
When interviewing owners of PSA firms, the mechanisms for achieving these became clear.
Behram Kahn, co-founder of Avaza told me:
‘an improvement of 5-10% in utilisation is not unusual due to better resource planning: there are fewer status meetings because the data is there for everyone to see, there is less use of email because all collaboration happens on the tasks in the system, and there is less time taken up trying to work out project finance’.
The obvious advantage to PSA, especially for the ex-consultant founder who may not be an expert in forecasting, data management or financial planning, is that it supports these administrative and management tasks to be more integrated, more efficient and more accurate than using disparate systems. However, there are other advantages.
First, you know what data and processes you should define, as PSA companies refine systems from experience across many PSFs. Their architecture has therefore good claim in being ‘best practice’.
Whilst every PSF is different, the basic requirements of finding, resourcing, completing, an d billing for projects are pretty much the same, and a good PSA will also be able to provide excellent advice (see it as free consultancy!) on the best metrics to capture for a growing firm.
Second, the use of a PSA also provides advantages to stakeholders outside the firm. For example, you can give clients access to your PSA to see the progress of projects, manage risks, and even sign off time-sheets. Moreover, for buyers, PSA data provides clear, unambiguous, detailed company metrics which firms without PSAs would spend months collecting.
Four final pieces of advice when it comes to the sourcing and use of PSAs: First, it is definitely worth speaking to PSA providers early on, so that you have an idea of the type and format of data that would be useful to capture. This is important because you may develop systems not best practice or build ‘electronic concrete’ that makes transition difficult.
Second, and relatedly, since many PSAs are now cheap, you lose little by using them early before migrating from spreadsheets. Third, all the PSA CEOs that I interviewed warned against the dangers of amending their systems too much:
‘we often bump up against firms who want us to build around the data that they already capture. The problem with this is that what they capture is often inadequate to the task. Although every PSF is unique in terms of content, the process should be very similar. It’s worth bearing in mind that we’ve developed our processes with hundreds of companies and what we have now is best practice’.
Finally, PSAs become much more powerful when integrated with other systems your company runs, such as financial management or CRM systems.The SPI survey mentioned above demonstrates that integrating a PSA, rather than using it as a stand-alone system, enhances all performance metrics.
Of course, some PSAs have these built in, but a standalone CRM system such as Active Campaign is likely to be superior to anything that a PSA could hope for. Integration is relatively straightforward for most PSAs, but an additional cost is likely.
