Vendors Venturing into PSA
Jakovljevic - April 12th,
On February 29, PeopleSoft Inc. took the wraps off its Professional Services
Automation (PSA) product, software that aims to help services firms better
manage financial and human-resources systems. PeopleSoft PSA targets firms
that have difficulty managing the skills and availability of staff. The
product provides opportunity and service-resource management, which handles
project proposals and planning; identifies employees with the right skills
for the job; and manages billing, invoices, and contracts.
is not alone in the emerging professional services market. Evolve, Novient,
and Niku provide billing and management services to professional firms.
Craig Conway, PeopleSoft president and CEO, says the difference between
PeopleSoft and its rivals is that the competitors are focused on a single
piece of the market. "You don't see comprehensive billing and contract
management being integrated with opportunity management, which is what
PeopleSoft delivers", he says. Pricing will be based on the number of
employees who use the product, which is unlimited. But Conway says PeopleSoft
is considering switching from a user-pricing model to value-based pricing.
March 6, Lawson Software joined the fray by reaffirming its position as
a "premier total solution provider for the professional services industry".
Lawson currently serves 165 professional services customers with a focus
on delivering full front- to back-office integration and automated, closed-loop
e-business processes. Lawson, which announced its professional services
initiative in November 1998, has been delivering industry-specific functionality
in a fully integrated solution suite for professional services since September
"With Lawson's one-year lead in development, we feel confident that we
can continue to outpace the competition with real solutions deliverable
today and real ROI," said Carol Hallock, director, Professional Services
Business Unit, Lawson Software.
is a dynamic and rapidly expanding market that has not been adequately
addressed by our competitors, which have traditionally focused on manufacturing
rather than services industries. Lawson has been offering Web-deployable
solutions for more than four years, and has delivered front-to-back office
integration capabilities for more than one year. Since its inception,
Lawson's professional services vertical has given business management
and information technology consulting firms, professional employer organizations
(PEOs), staffing offices, consulting firms, employment agencies, law firms,
engineering firms, government contracting agencies and other services
organizations single-point access to integrated business data." Hallock
to Lawson, its Web-enabled professional services software includes:
- An in-house developed, fully integrated customer relationship management
(CRM) module for client and prospect opportunity management
- Resource scheduling capabilities
- Deployment and utilization features that allow users to not only
search and match the skills of their internal employees, but also
to perform skill searches against their partner and sub-contractor
- Web-based time and expense entry with management functionality
to capture project costs and track labor utilization
- A fully integrated Activity Management module to handle all necessary
billing, revenue recognition and contract management functions, as
well as budgeting, analysis and other project management tasks
- Advanced workflow to create and fully automate closed-loop business
- Web-based self-service for easy application and data access by a
widely distributed workforce
- When combined with Lawson's human resources, payroll, and procurement
solutions, this fully integrated solution suite allows professional
services organizations to realize efficiencies and analytic opportunities
that newly hatched and non-integrated systems cannot provide.
Contrary to ERP vendors' generally tardy and belated reactions, as in
the case of CRM or e-commerce opportunities, the above vendors have swiftly
acted on the opportunity to encroach into the PSA space. The market is
still nascent and evolving, with fragmented offerings and no established
strong leaders. As a matter of fact, a vast majority of PSA vendors are
start-up weaklings. We believe the future will bring more similar announcements
as well as news of ERP vendors acquiring their PSA counterparts. The usual
ERP suspects for these moves are Geac Computers Corporation, SAP, Oracle,
J.D. Edwards, Infinium, and SCT Corporation.
Lawson and PeopleSoft have the advantage of an early market entry, they
will face stiff competition from a number of the native PSA players. Some
of them, like Niku Corporation, Evolve, and Account4 have already created
scenario is somewhat similar to the CRM market: PSA players will emphasize
their relevant product completeness with the appropriate price tag, their
expertise in handling unstructured data, and will spread the FUD (Fear,
Uncertainty, and Doubt) about immature ERP offerings and the danger of
buying irrelevant modules in an ERP bundle. On the other hand, ERP vendors
will try to sell their holistic, back-office integrated paradigm, which
does not require any applications interfacing or integrating. At this
stage, neither side claims a sharp vertical focus and ready-made interfaces
to third-party systems like airlines, hotels, and credit card companies.
Professional service organizations are advised to familiarize themselves
with the offerings of all relevant players. While there is no clear-cut
PSA functionality scope, one should look for the following common functions:
opportunity management, qualification management, resource scheduling,
delivery management, knowledge management, and data warehousing and business
intelligence. From the technical standpoint, the solution should be flexible
enough to accommodate both mobile and stationed users; in addition to
this, both groups will typically be divided into users who need access
to the bulk of the application, and those who enter more narrowly defined
this is an evolving area with not much implementation experience accumulated
so far, users should be aware of similarities and differences between
PSA and ERP. PSA products are much smaller and simpler in scope than their
ERP equivalents. Also, most PSA systems lack a built-in suite of development
tools; therefore we expect much less room for complex customizations.
Moreover, the "legacy systems" that PSA replaces often either do not exist
or are manual practices; therefore we expect minimal data conversion.
All the afore-mentioned suggests that PSA implementations should be much
shorter and generally less traumatic than ERP.
the other hand, professional service organizations tend to have an unstructured
work style that would challenge any organized approach to project management.
Professional service managers can typically commit much less time than
their counterparts in manufacturing. These managers are the people who
would be "key users" on an ERP implementation, who would attend frequent
working sessions in a project war room, and in many cases even work full-time
on the implementation. In PSA implementations, client managers will likely
serve only as sources of information and validation, but not as full-time
team members. Therefore we anticipate PSA projects should have more of
a turnkey approach.