Executive Briefings

Professional Services Automation and Project Management Software Are Quite Different

Analyst Insight: The software market for services has changed and is rapidly evolving. Overlap of features and functions often confuse organizations and consequently, they end up selecting the wrong type of software that they require. Organizations must be aware that the market for professional services is differentiated by professional services automation and project management and is further separated by full ERP suites or point solutions. -- Dylan Persaud, Managing Director, Eval-Source

The professional services software market is categorized into two main categories, professional services automation (PSA) and project management (PM).  These type of software include different feature sets but have overlapping functionality, full ERP suites and best-of-breed (BOB) point solutions, and therein lies the confusion.  Adding complexity to the selection process:  the market is further distinguished by full ERP suites that offer a few components of professional services, and point solutions that encompass the full lifecycle for PSA.

Several ERP vendors have modules within their software to address professional services and some are specifically targeted to service-based organizations.  While ERP entails auxiliary and supporting functionality, most are not specifically written for service-based businesses or do not support the delivery of professional services organizations well.  ERP-specific vendors who address professional services in particular, such as UNIT 4 and Deltek, have bridged the gap of supporting professional services automation, billing and delivery of the professional services into one software that greatly streamlines and maximizes PSA delivery.

The remaining portion of the professional services market is the BOB point solutions that encompass either portions of PSA or the entire lifecycle from prospect engagement to post-project synopsis.  These software solutions may include CRM, project lifecycle management, billing and collaboration.  An emerging trend is to add these functionalities to project management features and rebrand the solution as PSA software.  These solutions often pose problems for organizations as there is no clear delineation of functions, and aligning those technologies to specific organizational business objectives becomes difficult.  The introduction of cloud and SaaS solutions provides more options to companies especially within the SMB space.  Many vendors in SaaS PSA and PM are either point solutions with portions of PM or PSA functionality. Then there are vendors that offer the entire lifecycle of PSA. While most of these systems can be deployed as a standalone they are also capable of integrations that support other enterprise software functionality.

PSA and PM software differ in several functional areas and features that separate these markets. PSA software tends to have resourcing and scheduling, retailed billing with expense and budget management, demand planning, workflow creation, deeper collaboration both internally and externally and a sophisticated level of automation.   Organizations rarely can differentiate if these functionalities belong to PSA or project management tools.  PSA software contains the additional functions listed to traditional project management software to create a more defined and separate software market in order to automate service-based businesses and all of the operational components to properly guard against loss of revenue.  PSA software provides a deeper tool set to accommodate outsourcing and other areas where companies may lose revenue for not tracking time and labour associated with projects.

                                      The Outlook

Organizations need to settle upon a strategy when selecting software for service-based businesses.  Areas that require closer investigation are whether to select a services-based ERP specifically, an ERP with service-based components or a BOB point solution.  The next area of focus is whether to pursue a PSA or PM software as there are many areas of overlapping functionality. Be cognizant of enterprise categories that are added to PM software solutions; these can further complicate a decision.


Keywords: supply chain management IT, supply chain solutions, supply chain systems, professional services software, project management software

The professional services software market is categorized into two main categories, professional services automation (PSA) and project management (PM).  These type of software include different feature sets but have overlapping functionality, full ERP suites and best-of-breed (BOB) point solutions, and therein lies the confusion.  Adding complexity to the selection process:  the market is further distinguished by full ERP suites that offer a few components of professional services, and point solutions that encompass the full lifecycle for PSA.

Several ERP vendors have modules within their software to address professional services and some are specifically targeted to service-based organizations.  While ERP entails auxiliary and supporting functionality, most are not specifically written for service-based businesses or do not support the delivery of professional services organizations well.  ERP-specific vendors who address professional services in particular, such as UNIT 4 and Deltek, have bridged the gap of supporting professional services automation, billing and delivery of the professional services into one software that greatly streamlines and maximizes PSA delivery.

The remaining portion of the professional services market is the BOB point solutions that encompass either portions of PSA or the entire lifecycle from prospect engagement to post-project synopsis.  These software solutions may include CRM, project lifecycle management, billing and collaboration.  An emerging trend is to add these functionalities to project management features and rebrand the solution as PSA software.  These solutions often pose problems for organizations as there is no clear delineation of functions, and aligning those technologies to specific organizational business objectives becomes difficult.  The introduction of cloud and SaaS solutions provides more options to companies especially within the SMB space.  Many vendors in SaaS PSA and PM are either point solutions with portions of PM or PSA functionality. Then there are vendors that offer the entire lifecycle of PSA. While most of these systems can be deployed as a standalone they are also capable of integrations that support other enterprise software functionality.

PSA and PM software differ in several functional areas and features that separate these markets. PSA software tends to have resourcing and scheduling, retailed billing with expense and budget management, demand planning, workflow creation, deeper collaboration both internally and externally and a sophisticated level of automation.   Organizations rarely can differentiate if these functionalities belong to PSA or project management tools.  PSA software contains the additional functions listed to traditional project management software to create a more defined and separate software market in order to automate service-based businesses and all of the operational components to properly guard against loss of revenue.  PSA software provides a deeper tool set to accommodate outsourcing and other areas where companies may lose revenue for not tracking time and labour associated with projects.

                                      The Outlook

Organizations need to settle upon a strategy when selecting software for service-based businesses.  Areas that require closer investigation are whether to select a services-based ERP specifically, an ERP with service-based components or a BOB point solution.  The next area of focus is whether to pursue a PSA or PM software as there are many areas of overlapping functionality. Be cognizant of enterprise categories that are added to PM software solutions; these can further complicate a decision.


Keywords: supply chain management IT, supply chain solutions, supply chain systems, professional services software, project management software