5 proven benefits of real-time analytics for professional services organizations

Profile picture for user Manpreet Nagvanshi By Preet Nagvanshi December 2, 2018
Summary:
Real-time analytics produce proven cost and revenue benefits in professional services organizations. FinancialForce's Preet Nagvanshi explains why

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Real-time data analytics has the potential to transform the way that professional services organizations operate. Instead of manually cobbling together best guesses based on past events, professional services groups can use real-time analytics to deliver insights on what is happening right now. This in-the-moment decision making is especially important for managing resources, maintaining profit margins, keeping projects on track, resolving issues and, ultimately, delighting customers.

Here are five ways that real-time data analytics can help professional services organizations radically improve their business.

Utilize resources more effectively

Scheduling the right people on the right projects at the right time has traditionally been a challenge for professional services organizations. Prior to the advent of real-time analytics, managing resources was a manual and error-prone process. Organizations would have to wait until the end of the month to get reports showing how their resources performed, such as where they were falling behind on projects, spending more time than planned, or where they were surpassing expectations. By then it was often too late to make meaningful adjustments.

With real-time analytics, however, organization have a much better handle on resource utilization. For instance, at any given moment they can see which resources are sitting on the bench doing nothing and which resources are stretched to the breaking point. As a result, they can make needed changes on the fly and immediately resolve staffing situations — before they become costly problems.

Maintain high profit margins

Profit margins are generally thin in professional services organizations. Real-time analytics help improve profitability by optimizing two key operating metrics - realized hourly bill rates and billable utilization (defined as hours billed divided by available hours). For example, if you can see in real time how many hours are being billed to a particular project, and you notice that billing is running lower than projected, you can intervene immediately, before the problem escalates and negatively impacts your overall profit margin.

You need to make those critical adjustments in real time, when you can still control the situation, rather than wait till the end of the project, when it will likely be too late. In the days before real-time analytics, there was no easy way to get that kind of end-to-end visibility into billing and profitability.

Get reliable forecasts

With real-time analytics, service professionals can do forecasting and run their businesses with greater confidence and predictability. In the past, forecasting was largely hit-or-miss and not very accurate. When planning a project, for instance, managers would have to manually check everyone’s calendar to figure out which resources would be available in the weeks and months ahead.

Real-time analytics, by contrast, eliminates old-fashioned, time-consuming spreadsheets. Managers can instantly see what is in the services pipeline (services projects yet to be sold) and project backlog (services projects sold but not yet implemented), what is invoiced and what is paid. They can also access and analyze revenue at each level by group, customer, project or region. Overall, analytics can drive better decision making, better forecasts and better outcomes.

Accurately match supply and demand

Real-time visibility into your project pipeline means that the right number of resources are at your disposal, whenever and wherever you need them. The beauty of real-time analytics is that service organizations can quickly and accurately gauge client demand and then figure out from where to pull the resources necessary to meet that demand.

With analytics, you know what your resource pool is doing at any given time and you have visibility into how those resources can be deployed going forward. In the past, that kind of visibility simply wasn’t possible, especially for fast-growth businesses that were still relying on manual methods to match supply and demand.

Control value leakage

No matter how good you are, there will always be times when you’re giving away services or offering significant discounts, usually for strategic reasons. The reality is that a software company, for example, will sometimes offer its professional services at a discount in order to sell more product licenses. But too much discounting can place a lot of downward pressure on service organizations and be a real drag on the business.

With real-time analytics, however, organizations can gain true visibility into how much discounting is actually going on. This visibility also enables the business to set parameters around those giveaways, so that so-called value leakage is contained. At any given point, you can see how much value has leaked out of your bucket and whether it’s an acceptable amount or if you need to step in and make the appropriate changes.

In today’s hypercompetitive environment, professional services organizations simply can’t afford to waste time trying to manually analyze financial trends, generate reports or calculate the effects of potential business decisions. The bottom line is that real-time analytics can help services organizations avoid expensive mistakes, accelerate growth and shine in the marketplace.