PSA software
Rebecca Annies
Jul 6, 2022 | Last updated: Sep 29, 2022
Insights | 8 min read


If you are looking for ways to make your project management simpler and more transparent, you have probably come across various methods, but also a variety of digital solutions to support your project management. One of them is so-called PSA software. What exactly does the abbreviation mean, though? Is this type of solution the right fit for your company? What should you consider when buying PSA software? We will answer the most pressing questions.

What is PSA software?

Professional Services Automation software is a central hub where all activities of all departments of a company come together and can be managed centrally from there. PSA supports people with certain recurring tasks. On the one hand, it is meant to take workload off of employees. On the other hand, its purpose is to simplify, automate and accelerate processes. The backbone of it all is a common data basis where all data regarding customers and projects as well as all further company-relevant information is stored.

PSA solutions support you with:

  • evaluating leads,
  • creating quotes,
  • planning and managing projects,
  • tracking working times and expenses,
  • creating invoices and
  • keeping an overview of costs and project progress.

Microsoft’s PSA software, formerly known as Dynamics 365 Project Service Automation, has been on the market since 2016. It has recently been reworked and updated, and is now available as Dynamics 365 Project Operations.

Who benefits from PSA software?

For companies whose business model it is based to execute projects for their customers, a PSA tool is indispensable. This applies to service providers, consulting firms, and other project-oriented organizations from different industries, for example, construction, engineering, business consultancy, or IT.

It is by far not only project managers who work in PSA software, but everyone involved in a project from any department collaborates there:

  • The sales team documents the (pre-)sales communication so the project managers know how close they are to sealing a deal.
  • Required resources such as developers, technicians or consultants are involved to estimate the duration and costs of the project.
  • Once the project has started, team members are able to easily record their working hours and expenses which, in turn, enables accounting to create precise invoices and send them out quickly.
  • Upper management always has an overview of current project progress, resource consumption, costs, and other project parameters.

What are the advantages of PSA software?

Used in the right way, Professional Services Automation helps your project-oriented company to reduce workload, optimize workflows and eventually increase revenue.

Efficient collaboration

Only if each department knows what the other teams are doing they can work on projects seamlessly and without interruptions, and complete them successfully.

Example 1
The project team is well aware of what the sales team agreed with the client and therefore knows what is expected of them. On the one hand, this gives the team members the chance to prepare for the upcoming tasks. On the other hand, it positively affects the customer relationship since they get the feeling it is a top priority for the company.

Example 2
Accounting has an overview of all billable hours and other expenditures for each project and doesn’t have to check back with the project manager to inquire what is allowed to be invoiced every time before sending an invoice. But that is not all: the customer’s preferred type and frequency of billing are also saved in the PSA system. That means that invoices can be sent immediately and thus revenues can be earned faster.

Precise planning

Professional Services Automation enables you to make accurate predictions about the number of employees, materials and financial resources that are required to realize a project. This information is relevant to the company to plan accordingly. Furthermore, it helps to prepare quotes for customers that you can meet without risks of loss. PSA software also helps you to draft reliable schedules.

Clever resource assignment

The satisfaction of your employees largely depends on the manner and scope of the tasks they are assigned to. Your employees should neither be bored nor overwhelmed with their work. You achieve that by assigning them tasks according to their skills and neither under- nor overbook them. That is another issue PSA software helps with: it lets you calculate the scope of the project and the corresponding need for resources, so you can assign them to tasks based on their competencies and availabilities.

Resource management in Dynamics 365 Project Operations
In Microsoft’s PSA software Dynamics 365 Project Operations, resource profiles show the competencies and availabilities of your employees.

Timely interventions

However much you plan, there will always be situations that you won’t be able to foresee, for example a sudden absence of an employee due to illness or the accidental shipment of the wrong materials. To prevent situations like these from delaying the project for too long or causing a drastic rise in the project costs it is important to recognize them as early as possible. Equally important, but even harder to spot are subtle negative trends that might jeopardize the success of the project. For example, if milestones are not achieved exactly on the scheduled date, it can happen easily that the entire project gets delayed and thus causes unplanned costs.

PSA software provides you with an overview of the status and progress of your projects at any time. If something doesn’t go according to plan, project managers can recognize it instantly and initiate measures that will bring the project back on track.

Data-driven decisions

Professional Services Automation unites all information of all projects from everyone involved in one solution. Besides costs and a timeline, you can define more Key Performance Indicators (KPIs) significant for your business model. Dashboards allow you to view this data in a clear format, making its evaluation quicker and easier. A profound data basis is the foundation of smart decision-making – on project level as well as on company level. If you know where your company is coming from and what its momentary situation is, it will be a lot easier for you to develop a business strategy and to make sure your business is moving in the wanted direction.

How do I choose the best PSA software?

In order to find the Professional Services Automation that is right for your company, you must define what you expect it to do. The size and industry of your company play an important role, and so do your business model and strategy. To articulate concrete requirements, it can be helpful to involve people from different areas and of different hierarchies. That way you make sure to consider expectations from the solution from various angles.

However, there are three aspects you must pay attention to when choosing a PSA software – no matter what specific requirements your company has:

  1. The software should integrate well with your existing IT infrastructure. The new PSA solution mustn’t be a secluded “island;” it rather needs to form one coherent IT environment together with your current sales or CRM system. That is the only way to ensure that all processes and data come together in your new solution.
  2. The solution needs to be scalable. Purchasing Professional Services Automation software is an investment in the future of your company. You simplify, standardize, and accelerate workflows to become more productive and to grow. That is why your PSA software should be built to grow with you. That means you should have the possibility to add or extract user licenses flexibly and adapt the working environment according to changing business reality.
  3. The IT partner implementing the PSA software should be experienced. Firstly,the IT provider or vendor – whoever is responsible for making the solution work for you – needs to know the product, its benefits, but also its potential pitfalls. Secondly, it is truly helpful if your implementation partner already has practical experience in your industry. Then they know about industry-specific challenges or particularities and in the best case already have suitable fixes for that.

While that sounds great, there is still one question unanswered: how can you know which solution fits your needs? The best way to find that out is to get right into it and explore the actual environment via a test or demo version.

Take the first step!

Professional Services Automation is not just a trend that’ll pass by or a nice-to-have. In project-oriented companies, PSA software might even be what separates an average company from a constantly growing successful company. Admittedly, the way to get there will not be a fast track, but in the end, your customers, your employees, and you will be thankful you did it.

If you need help with orientation or an outside perspective to help you identify and assess your company’s needs, feel free to get in touch with our experts.