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Blindsided: Why Service-Driven Organizations are Unprepared for Swings in Demand

Blindsided: Why Service-Driven Organizations are Unprepared for Swings in Demand

In my last blog post, SRP and PSA — There IS a Difference, I discussed the major differences between Services Resource Planning (SRP) and Professional Services Automation (PSA). In short, SRP addresses the capacity and demand issues that drive resource decisions and revenue forecasting, whereas PSA focuses more on the mechanics that drive the quote to cash process, such as order processing, billing, and so on. Both are needed to effectively run a project-based service organization. Most service-driven organizations have the front-end and back-end “mechanics” system (often PSA or a customized ERP system) in place but few have mastered synchronizing demand with delivery capacity. Perhaps this is why so many service-driven organizations struggle when the inevitable swings in demand happen, sending them scurrying to get a handle on their resource situation.

To begin with, let’s look at the typical pain points service-driven organizations tend to experience.

 

Service-Driven Challenges

In speaking with numerous Operations VPs and staffing directors about their business challenges, the following points hold true in virtually every organization:

  • Unreliable forecasting means incoming demand is always a surprise
  • Poor visibility of resource utilization; to find the resource information they need they must look in multiple spreadsheets or make multiple phone calls
  • Specialized, higher cost resources are consumed on low margin engagements and activities
  • Project execution methods are inconsistent, wasting resources on rework often cause delivery delays and customer satisfaction problems

For these organizations, it is critical to be able to optimize the global resource pools because the resources are the business. Specifically, service-driven businesses need to be able to accurately synchronize demand with delivery capacity. They must drive operational excellence and maximize their revenue by optimizing the timing vs. availability vs. profitability equation to improve the management of their global resource pools. The last piece of the puzzle is to establish financial transparency into the true cost of service and project delivery to improve forecasts and develop reliable proposals for future projects. Without these items in place, all of which SRP helps address, the organization is at a disadvantage.

In my next post, we will look at a few real world examples of how different services organizations have struggled with the similar challenges and how Services Resource Planning is changing the way they do business. For more information about Services Resource Planning, download a copy of the latest IDC Executive Brief titled, Service Resource Planning: Systems for Effectively Managing a Project-based Business.

I want to hear from you! What are some of your challenges your organization is facing? Share your experiences by leaving a comment below.

Related post: SRP and PSA — There IS a Difference

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Louise Allen
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With more than 20 years of experience in all facets of bringing technology products to market, Louise leads the product management and solutions marketing teams for Planview, responsible for product strategy, positioning and roadmap for all three of Planview’s product lines. Louise joined Planview from Quickarrow, where, as Vice President of Product Strategy, her efforts drove the company from self-funded startup to consistently profitable. Prior to this, she held leadership positions with companies including Tivoli Systems, an IBM company, and NetQoS. Louise received her BS in Business Administration from Trinity University, and her MBA from The University of Texas at Austin.