From Excel hell to cloud clarity in global professional services
- Summary:
- Hear from two professional services organizations who left spreadsheets behind in favor of tracking and reporting using a cloud-based system
Professional services providers often find themselves operating with spreadsheets because they have needs that are not well served by general-purpose business software, such as complex revenue recognition, cost allocations and so on. But while spreadsheets make it possible to complete these custom calculations, they introduce many opportunities for errors and miscalculation.
Recently I met with two professional services companies that have been able to move away from spreadsheets. They were attending a customer event in London organized by FinancialForce.com. Both companies implemented the vendor's cloud-based professional services automation software last year. The impact on speed and accuracy of management information has been dramatic.
From 2 weeks to 45 minutes
Sabio, a 200-person global call center systems integrator, used to take two weeks to compile management reports that it can now produce in 45 minutes, project systems and quality manager Mike Woods told me.
While it was effective, the speed it took to do reporting was limiting. The whole management information could only run twice in a month ...
We've now got exactly what we want. The granularity of information is exceptional. To run the management information reports and produce it takes about 45 minutes. So we could run it on a daily basis if we needed it.
We're using data now to identify trends, compare budget versus actual figures, calculate gross profit. This is therefore giving directors the data to make strategic decisions.
Related stories
- Small and boring wins the day in the new age of services (diginomica.com)
- What's So Bad About Spreadsheets? Do you seriously consider replacing them? (cfototality.com)
- Prepare now for a 7-year famine in IT services/a> (diginomica.com)
Hosting and cloud services platform provider Parallels has removed the earlier pain out of revenue recognition that used to occur when, for example, people would enter spreadsheet data in the wrong currency. As Martin Zitz, senior director of global professional services operations, told me:
That has removed a lot of stress every quarter. [If someone made a spreadsheet error] you only found out when it was in the ERP system and the numbers didn't match.
Revenue recognition is a critical function for Parallels because its professional services are mostly delivered within a revenue sharing model. The company provides the automated systems that large hosting companies use to deliver services such as Office 365 alongside domain hosting, email and storage services. The Parallels system provides the mechanism not only for provisioning these services but also takes care of bundling, selling and billing, including support for reseller channels and self-service administration by users.
Our SKUs are service modules for which we have a standard price and set of deliverables. As a service provider, the way we're earning our revenue is based on percentage completion for each of those SKUs, which we also have to manage in different environments — lab, stage, production.
Bridging the departments
Clearly this required detailed information as the project progressed through various stages. Zitz's team had been managing this with a hodgepodge of spreadsheets, Powerpoint decks and Word documents. It worked, but it was cumbersome and didn't cope well when changes occurred. Moving into FinancialForce has improved visibility and has brought the data into the Salesforce environment that sales teams use. Zitz explained:
What we were doing was mega spreadsheets, loads of Powerpoints to track each project. Going into FinancialForce.com, we're limiting the aggregation we had to do in the past, bridging the departments.
Before, a prospect would have led to an email request, now the sales rep can do it Salesforce.
So now if the customer changes spec halfway through, it's all totally transparent. It allows our financial guys to go in and figure out where [in the past] similar financial transactions may have come unstuck.
In many organizations, emailed spreadsheets often emerge as the most viable platform for collaboration across globally distributed teams. Parallels certainly falls into that category, with a global deployment team based in Novosibirsk, business consultants and engineers in the field (about half of them external contractors), and an integration team located in Moscow. Zitz, who is based in Munich, comments:
Most of our business is in Europe and the Americas. You can sit everywhere on the planet, it doesn't matter.
The emergence of global cloud platforms provides an alternative for distributed working that overcomes many of the shortcomings of the spreadsheet approach.
Improving business operations
Once the new system is in, the faster, more flexible reporting and analysis it allows creates opportunities to improve the way the business operates, says Sabio's Wood:
Six months in, we have changed the way we use it two or three times. It's only when you get into using the system you understand the restrictions — or other benefits you can get out of it ...
It's not going to necessarily save huge amounts of time if you want to use it as a management tool. The more information you put into the system, the greater understanding of your business you'll get.
Therefore what we've done is reduce the administration level about 25 percent [instead of a possible 50 percent] but extended the amount of data we enter into the system to allow us to understand the business and help us develop that business to be more profitable.
Look at it not only as a business management tool, but as a repository of data that needs to be analyzed to understand potential issues and the root of the data source to take corrective action ...
It's a fundamental way of understanding how you're running your people and where you're spending your time.
Disclosure: FinancialForce.com and Salesforce.com are diginomica premier partners. Salesforce.com is, at the time of writing, a consulting client of the author.
Image credit: © Leonid Ikan - Fotolia.com