How to choose ERP for consulting firms? ERP for professional services.
5 software tips for the professional services industry
Challenges in acquiring top talent and new skills to cater to diverse clients and stay competitive are increasing for consulting firms. Add to this the problem of inconsistent or disorganized knowledge-sharing without unity in a single, transparent system and it's no surprise that consultancies are looking for a new, better way of doing things. For many, that’s ERP.
Specifically, cloud-based ERP can help consulting businesses adopt the “‘anywhere, any time team operating model” Infosys Consulting CEO Mark Livingston sees as critical to delivering the choicest talent to clients wherever they are with direct access to the information they need in real time. It does this not merely by allowing consulting firms to operate remotely, but by solving yet other problems that flourish in outdated consulting practices—poor resource management and information silos.
Using ERP, consulting businesses can differentiate from the competition with superior services and resourcing, make knowledge transparent and gain the means to make client work more profitable than ever.
In this article, we’ll give you the information you need to find the best cloud ERP for consulting firms.
What is the best ERP for consulting firms?
Resource management: ERP’s secret weapon for consultancies
Key benefits of ERP for consulting firms
How to select ERP for consulting businesses
What is the best ERP for consulting firms?
Hands down, the best ERP for consulting firms is Professional Services Automation software, or PSA. PSA is a type of ERP that consolidates the various components of your Quote-to-Cash cycle in one data-rich system, strengthening resourcing, project planning, financial management and organizational efficiency. Elimination of project, client and cross-departmental information silos allows your consultants to execute their expertise responsively and with the agility needed to deepen client relationships.
Moreover, PSA ensures the efficiency and 360-degree visibility required to increase billable time, win more deals with the right resources at the right time and stay nimbler to meet the complex project needs of clients big and small.
As purpose-built ERP for professional services industries, PSA covers:
Quote, proposal and opportunity management
Project management and planning
Resource management, scheduling and forecasting
Time tracking, which in leading solutions can be automated with auto-populated timesheets that update project budgets and margins
Business expense tracking, which can be as swift, simple and transparent as uploading photos of receipts and assigning predefined expense categories
Task management with tasks available for all team members across your organization and visual task tracking against client projects
Billing and invoicing, which the software should automate, including the scheduling of invoices for retainers and fixed-price projects
Real-time reporting with data you can configure any way you need for various stakeholders
Resource management: ERP’s secret weapon for consultancies
Today’s consulting prospects are seeking providers that can quickly resource and solve specific, often “specialized” problems with specific, specialized services.
In this environment, getting your ducks in a row across borders and time zones with correct resourcing may be more important than ever before.
Gaining instant insight into your hiring needs
ERP gives you an almost immediate understanding of your hiring needs. Leveraging ERP’s advanced project planning capabilities, you can see past project data and detailed information on project deliverables, including schedules, margins, budgets and resource allocations along with their cost and sales rates. Comparing this information to granular resource availability information and project planning, you can forecast resources and pinpoint what types of skills you’ll need as well as when, where and how best to apply them.
Being a powerful data repository and organizer, ERP can also store the types of activities your current resources can perform so you can quickly identify which skills might be missing. And this just scratches the surface of what ERP can do.
Some solutions can also give you a head start on planning before deals are struck with resource planning placeholders. These will give you an edge in forecasting job roles that will need filling, planning resources further out and calculating how much opportunities are going to bring in in terms of revenue, giving you more control over individual project profitability.
Key benefits of ERP for consulting firms
In addition to knowing which skills you’ll need, you’ll also be able to:
Price services correctly guided by the financial details of successful projects you’ve completed combined with insight into internal and external resources’ cost rates
Limit bench time and utilize existing resources to the fullest extent with a side-by-side view of project planning and resource availability
Quickly spot instances where the completion or start time of work packages can be moved up with visual resource planning charts
Share cross-organizational knowledge in real time with project and client documents, statements of work, notes and relevant information centralized, allowing for better, more flexible service delivery
Incorporate analysis of pertinent (non-confidential) information captured in the ERP system, including project budgets, margins and work breakdown structures, into future projects and proposals
Lower overhead, helping your organization grow in a fiscally responsible manner
How to select ERP for consulting businesses
Realistically, there are many moving parts of operating a consultancy as a profitable business and industry leader that deserve a much more thorough analysis than can be provided in this blog post.
That said, consulting firms do need to look at specific criteria if they’re going to pick the right platform. These are what we are going to address below.
Choose mobile-friendly cloud ERP
Cloud ERP systems offer significant advantages over their (largely old-school) on-premises counterparts.
For consulting firms that want to deliver topnotch services anywhere in the world, only cloud ERP has the capacity to host instantly sharable knowledge and promote anywhere, anytime collaboration. But also, if they want to keep their services relevant and stay on top of changing technology trends, there’s no competition.
Cloud-based ERP will come with automatic software updates of new feature releases from the cloud it runs on. So if your consultancy uses ERP that runs on Google Cloud, for example, you’ll work from an infinitely scalable infrastructure and have access to new Google Cloud application technologies just by using your ERP system.
It’s also worth mentioning, data storage can be cheaper and safer with cloud tools. This is because it’s not subject to onsite storage and environmental hazards. As long as you’re working with a reputable cloud system and ERP vendor, safety and security are part of the package.
Make sure you can easily weigh capacity and demand
Good capacity management is easy capacity management. Put differently, any difficulty in understanding your consultancy’s resource capacity is going to compromise your ability to meet demand with an adequate resource pool.
What goes into easy capacity management? Quick-view sales pipeline and deal progression data accessible in real time. Clear resource availability presented in an easily digestible format. The ability to pencil in placeholders while planning resources for proposal-stage projects and assess resource gaps.
Here’s an easy test. During a free trial or demo, see if the main resource planning view makes sense to you. If it doesn’t, it’s probably not the user-friendly solution you’re looking for.
You can also check that the vendor has gained recognition in the B2B community as a leader in resource management software. This can give you confidence that the solution has been tested, vetted and confirmed to meet the highest resourcing standards.
Look for billability and utilization tracking
How billable is your consultants’ time? How efficiently is it being used? These are questions you can rely on your ERP to answer instantly so long as it offers real-time billability and utilization reporting.
It’s easiest if you can find this information without having to do any digging, so look for ERP solutions that offer it, along with other useful financial information (individual client profitability tracking is another handy metric), in a premade dashboard. That way, you can check in whenever you need and find it all in one place.
Check the depth of project financial reporting
Every services business under the sun needs to know where it lies on the profitability spectrum.
Estimated vs. actual project budgets and margins are a must if you’re going to keep projects on the right track and make sure they hit profitability targets. At the same time, you can use this data to learn from your successes and repeat those, not failures.
For consulting businesses, projects that are costing more than they’re making, or returning very little in terms of margin, are not worth doing. Likewise, knowing that certain types of projects deliver higher margins can give you a good idea of which direction to take in developing services and accepting new clients.
Not to mention, actual vs. estimated budgets and margins, along with resource costing and sales rates, is part of your right-pricing strategy.
Opt for easy onboarding
The larger the size of your consulting business, or even the more spread out your teams are over the globe, the more intensive deploying an ERP solution can become. Without adequate onboarding help, this can translate to longer implementation periods, disjointed efforts and adoption roadblocks.
The ERP vendor you choose should offer comprehensive, fast and easy onboarding with a proven track record. Though no ERP solution is turnkey, a strong onboarding experience can drastically shorten the time it takes to go live with your ERP solution from many months, or even years, to eight weeks tops.
Especially for larger and more spread-out consultancies, simplified onboarding creates faster Time to Value. What’s more, it ensures the relationship building and project work your consultants are doing won’t be undermined by a sloppy software transition.
Make ERP your greatest asset
As consulting prospects increasingly demand more niche and skilled services—and don’t want to wait—consultancies can’t afford not to modernize. ERP is helping them meet the needs of their audiences and deliver the tailored solutions and specialized skills they’re looking for anywhere in the world with powerful resource management capabilities designed for the new remote-friendly business landscape.
For consulting organizations that also struggle with common problems from siloed knowledge to low client project margins, ERP is the dynamic powerhouse that will resolve them once and for all and make business predictable.
If you want to know more, get in touch with us.