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PSA automation using AI technology – where is this going?

December 23, 2019

What is PSA?

PSA – or Professional Services Automation is about streamlining the administration in consulting type businesses. Administration in those types of companies directly influences the billable hours which is the key profitability driver. Many times engagement administration are put on the consulting staff, such as timereporting, engagement follow-up, customer invoicing and procurement type of activities. This differs from many other types of companies where e.g. invoicing is removed from the first-line employee. It should be obvious how critical these processes are for PS companies and how important it is to keep it lean.


Challenges working against automation

As professional services are about providing capabilities for a client that otherwise are scarce in supply inside the company the nature of engagements are as many as the number of clients. Hence the need to be flexible in the way client engagements are contracted is great. Which in turn has the following challenges that needs to be overcome when automating:

  • Pricing is rarely the same between two client engagements which leads to unique invoicing parameters

  • Consulting brokers are pushing for self-billing procedures which differs from the regular client invoicing process

  • Some clients demand to have timereports submitted into their own system so invoices are not enough

  • Different clients demand to have timereporting information presented in different way on invoices to fit with their own engagement follow-up structure

  • Large joint-venture engagements are sometimes done in third-party applications

  • Some clients demand to have dairies, invoiceable expenses and other unique information provided separately each month

  • Some clients demand to see an invoice requisition before approving to receive the invoice in the first place

  • Internal KPIs are hard to consistently calculate and track as different clients have asked for different forms of contract structures, ie time&material, fixed price, target price etc.

  • Some clients ask to see all engagements for that client grouped into the same invoice

  • In some cases there exists frame agreements that needs to be grouped together to be able to report, follow up and forecast on.

  • Organization of the company is done in a flexible manner which mean vendor invoicing and invoicing approval structures are difficult to streamline.

  • In larger companies, internal pricing models used to share revenue or profits on co-sold engagements are unique and requires controllers to “move around numbers” to make the performance numbers show fair performance.

  • Overhead allocation of shared costs in a fair way.

  • Client contracts may be unique for each client leading to time needed to be spent reviewing contracts on a very detailed level to manage risks.

  • High employee turn-over.

  • Plus all processes above in some cases still being paper-based instead of digital.


Functionality available in standard systems

The systems that are targeting the Professional Services industry have functions that are possible to use to make the processes as efficient as possible given the variation that the market demands. Some still have very unique demands, eg “we want you to enter your invoicing details in our portal” such as the industry wide solution BEAst in the Swedish construction market. Such solutions pushes administration burdens onto subcontractors to the construction industry.

But outside of that, vendors such as Deltek Maconomy, Oracle Netsuite and similar are providing functions out of the box that efficiently covers at least half of the stated challenges in the previous section.


What typically are lacking in standard solutions are these features:

  1. Pay-when-paid

  2. Internal pricing models

  3. Timereporting exports to clients

  4. Self-billing support

  5. Full support for modern expense management

  6. Smartphone app support for on-the-go employee time reporting

  7. People management incl resume maintenance

  8. Sales and contract management


Non-AI Automation options already put in place in many companies, are you one?

Some technologies have been around for quite a while but have not yet been adopted by all. There are great ROI’s on many of these, such as:

  • E-invoicing – usually costs 15-20% of paper invoicing. But most importantly allows the invoicing administration staff to be reduced as well. Common providers in the Nordic countries for these workflows are Pagero, Inexchange and OpusCapita.

  • Purchase orders – usually moves the burden of purchase invoices earlier but most importantly allows for procurement agreement compliance and stops non-approved spending. Introducing this step is often also a great promotor of accounting automation as invoice errors a greatly reduced.

  • Smartphone expense reporting including receipt scanning. Thereby eliminating paper-based handling of expense reports. One example being Expensify.

  • Digital CV forms linked to sales process to allow streamlined sales proposal building.

  • E-signatures integrated into the sales and subcontractor sourcing processes also here eliminating paperbased workflows. And in this case, also greatly reduces the need for physical storage in favor of electronic document management.

  • Specific workflow apps for self-billing reporting, one example being SAP Fieldglass.

  • Other Electronic Data Interchange (EDI) standard formats allowing digital transfer of engagement specific documentation such as drawings, material specifications and so on.

  • Data Integration layers to integrate and source one set of data in the company to be shared by all systems thereby allowing single entry of data and importantly, one truth about company performance.

  • Robotic Process Automation (RPA) that allows repetitive tasks to be handed of the computer instead of being performed by humans. This tech is rule-based so exception handling will still be done by outputting error lists for further human work. However, this technology is quickly developing to in

The above benefits, already there to implement, will have great financial impacts on the companies that moves in this direction. Many have already done so and are thinking about the next step below.


AI opportunities going forward

Mostly, the AI opportunities visible today are progressions of existing processes already possible but where rule/code based interpretation of information soon is possible to do with AI interpretation. Like understanding sketchy information, such as poorly written receipts, poorly scanned vendor invoices, poorly maintained ledger data (eg. customer addresses).


So grouping the opportunities for the near future we see:

  1. Interpreting and coding transactions that would otherwise be put in “error cues” for manual handling. See SAP Leonardo for further information.

  2. Maintenance of registers of master data where data gets updated regularly eg customer or vendor credit scores, addresses and similar.

  3. Ability to use image recognition to “see” screens and find out what is show in for example streamed videos. See for example UiPath’s latest announcements on this.

  4. Reading client engagement information from contracts and automatically setup engagaments in ERPs for automatic invoicing.

  5. Automatic sales proposal created using former engagement data

  6. Automation of cost allocations across organizational units

  7. Using speech to direct the actions of various systems ie the “Siri” voice recognition concept being extended to gradually more and more system events. Think accounting managers performing journal entries verbally while on the go.

Looking a little further into the future we see the accounting profession to be system operators much like the manual factors workers had to re-skill to become robot operators 25-30 years ago.

The biggest business case for companies moving on all of the above is their bottom line benefiting in two ways. On the revenue side the billable hours may increase as admin time decreases. On the cost side the number of FTEs needed in the administration is reduced.  

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