Improving Professional Services’ Profits and Revenues by Uncovering Inefficiencies

In a post-pandemic world, service businesses need newer, simpler ways to improve profit and revenue inefficiencies. They know that they are losing money through gaps and inefficiencies. If you find your organization is failing to plug revenue leakage, struggling to leverage the benefits of data analytics, not managing resources to the full potential, and leaving legacy software in silos, you are not alone. There are solutions that can help. The solution is professional services automation (PSA) software that can help uncover these issues and provide a path to increased profits and revenues.

Here are four common inefficiencies that professional services organizations often face, and how a PSA solution can help.

Inefficiency #1: Not Managing Revenue Leakage

Every year services businesses lose millions of dollars in revenue leakages across some or all of their revenue streams. Often termed as the silent killer of profitability, revenue leakage refers to unbilled or underbilled service hours. A project delay, inefficient time tracking, priority change in scope, expectation mismatches, and delivery complexities all add up to a leaky bucket. Additionally, due to a lack of SLA, poor visibility around warranties and entitlements, operational conflicts, and overstaffing, that leaky bucket often reaches the tipping revenue point. There could be multiple out-of-contract circumstances that lead to missed revenue opportunities.

In an international survey of more than 2,000 business leaders by Boston Consulting Group, 45 percent said revenue leakage is a systemic problem facing their companies and 64 percent do not have standardized revenue optimization tools as part of their enterprise data systems. Plugging the revenue leaks requires you to decrease time spent on repetitive administrative tasks, maximize billable time, reduce delays, and produce itemized invoicing for increased transparency.

The best way to deal with revenue leakage for a services business is to leverage a professional services automation solution to manage service delivery, reduce administrative overheads, and streamline billing and invoicing.

Due to the integration of systems, different information across different systems is a thing of the past now. You can account for every piece of work done and invoice accurately — no oversight on invoicing, data mismatch, or underreporting. With accurate data and financial consolidation, you can identify sources of revenue leakages and prevent any rework that may come from errors. You’ll be able to manage cash flows with a clear view of WIP, billed, available-to-bill, and outstanding amounts. And you can make sure contract terms get modeled into rates and bill plans.

Inefficiency #2: Not Leveraging Real-time Data for Proactive Decisions

Real-time data helps companies know what’s going on at a glance. But loose spreadsheets and disconnected systems can’t help companies manage their live inventories. When insights are hidden in mountainous raw data, you are exhausting the data and missing out on opportunities. How can your data then (and the intelligence that comes with it) accelerate your growth and profits? The need of the hour is to move from a siloed and retrospective approach to an insightful, unified decision-making approach. An approach that comes with a real-time holistic business view based on 100 percent accurate data.

Infused with advanced analytics and AI, our self-driving PSA, Polaris, can help professional services organizations reap major rewards by tapping into their data. It has the ability to forecast to understand trends and predict resources, hours, and margins. Chances are, every practice and process is holding loads of mystery data — from transactions, time and expense, accounting, resources, and more. With a dashboard, built-in templates, and visualization, PSAs for enterprises present metrics the way your business needs to help you make decisions in-the-now.

Inefficiency #3: Not Managing Resource Utilization

The winning moves at professional services organizations come from the optimized utilization of resources. Optimization of resource utilization and profitability are two sides of the same coin. While reduced billable hours directly affect immediate profitability, overworked employees without skilling, investment, and proper allocation lead to burnout and attrition, which leads to long-term issues with revenues and growth. The sweet spot at the heart of utilization is between time, resources, projects, and profits.

Software like Polaris helps you get that right balance with competing priorities. Are you on top of billable utilization? Do you know how to measure productivity and identify revenue inefficiencies? With Polaris, you get the accurate project and task “beats” that capture billable hours and give real-time estimates vs. actuals. You’ll be able to understand skills and manage resource allocations with confidence due to intelligent recommendations. Get instant updates on billable hours to know if billable targets are being met and help with improving the overall resource utilization. Analyze and plan future resource needs with full visibility into project pipeline, resource, and skill needs by leveraging historical information.

Inefficiency #4: Not Optimizing Pricing and Resource Rates

Imagine the helplessness among resource and project managers when they wrestle with a mess of independent, non-integrated resources that don’t “speak” to each other. Far too often resources are assigned based on an unrealistic or tight deadline. Often, workers are stationed in low-value projects instead of high-value strategic ones with more ROI.

Resource rates are measured on the economic value of contribution provided by a resource. A key part of project planning and forecasting involves optimizing them to fit in the right projects. But often, resource capacity planning is poor and their utilization is badly documented. This results in a massive mismatch between the right job and the right resource. It also spills over into eroding profit and unhappy customers.

An intelligent project and resource management tool like Polaris helps services businesses model revenue based on 100 percent of all costs associated with the project – direct or indirect, and even business costs. It also takes into account other variables that directly impact revenues, like utilization, margins, etc., and helps determine intelligent rates for all project resources that can be leveraged to set up bids that ensure profitability right from the start.

If there were ever a time to knock out inefficiencies, it is now! Our PSA product offers a customized demo to show you how Polaris can help your enterprise improve profits and revenues.

Schedule a Demo →

Krishanu works with the marketing team at Replicon. Replicon provides award-winning products that make it easy to manage your workforce. With complete solution sets for client billing, project costing, and time and attendance management, Replicon enables the capture, administration, and optimization of your most underutilized and important asset: time.
Get started today.
Set up a free trial based on your business needs. Start Free Trial

6 Ways to Simplify Remote Resource Allocation and Why It Matters

When you’re an enterprise operating at a global scale with a team of employees working from home, one of your major concerns is proper resource allocation. When it goes wrong,…Read More

The Future of Project Resource Management in Professional Services

When it comes to PSA, automation is (literally) the name of the game. We turn to machine learning and AI to make our processes easier and cut down on the…Read More

If You Want Profitability, You Cannot Ignore Resource Utilization

After an enormously challenging year, professional services firms are trying to get back on track to achieve their growth and profitability goals. To do so, it has become more important…Read More

Seven critical ways to achieve global project success

There was once a time when managing a project at work was fairly straightforward. Everyone was in the same location, or at most a mere phone call away. You’d set…Read More

Time and Attendance Orientation Guide

In a growing business, the day will eventually come when managing time and attendance on paper becomes both inefficient and risky, especially when trying to balance things like overtime, paid…Read More

Using shared services? These five technologies are a must

As organizations continue to scrutinize operating costs and look for areas to drive efficiencies, shared services centers (SSCs) are a no-brainer. The concept of a multi-function SSC has been around…Read More
  • Polaris
  • Time & Project Insights
  • Time & Projects Solutions
  • Replicon Products
  • Replicon Users
  • Cloud
  • Corporate
  • Professional Services Management
  • Shared Services Management
  • Time and Attendance Management
  • Customer Feature
  • Time Intelligence
  • Industry News
  • Global Compliance Updates