ERP vendors launch professional services apps for SMBs
Professional services ERP applications have niche appeal and offer useful capabilities. But analysts say how they'll fare in the market is still to be decided.
ERP applications are usually implemented in large organizations with complex requirements. Now, however, professional services SMBs are turning to cloud ERP applications with specific functionality to help them manage their businesses.
These firms need strong resource management and project management capabilities in an ERP system, which is akin to materials resource planning functionality in manufacturing ERP systems, according to Predrag Jakovljevic, an analyst at Technology Evaluation Centers.
"You need to know who is available, what is their utilization, what are their skills and certifications, and so on," he said. "Then you need to have good timesheet capabilities for them so that you can bill the client and get the analytics on the project progress and utilization."
Top professional services-focused ERP systems include those from Acumatica, Certinia, NetSuite, Deltek and Sage Intacct, according to Jakovljevic.
Acumatica, Certinia offer PS ERP applications
Acumatica, which offers cloud ERP applications for industries such as construction, distribution, manufacturing and retail, released a Professional Services Edition in October.
Jeremy Larsen, vice president of product management at Acumatica, said the new edition is based on the vendor's Construction Edition because the needs of professional services firms and construction companies are similar.
"[Professional services] firms make their money on labor and projects that have a start and finish just like construction, which is also very labor intensive," Larsen said.
Acumatica is targeting its Professional Services Edition at SMBs that make $10 million to $250 million in revenue and operate adjacent to construction such as construction consultants, engineering companies and architects, he said. Subsequent versions will be aimed at computer and IT services, medical services, and legal firms.
The application was designed to meet professional services companies around optimizing labor planning and tracking -- a key factor in their profitability, according to Larsen.
"So having a resource planning tool and a scheduling tool was a must, which is the same in construction," he said.
Acumatica didn't build its own project management tool but instead partnered with independent software vendor ProjectManager to add one to its Professional Services Edition, Larsen said.
Other key capabilities include time tracking, milestone billing and a project health dashboard that enables users to see where a project might be unhealthy, he said.
Certinia, formerly FinancialForce, has built its applications on the Salesforce platform. Certinia's Professional Services Cloud ERP application is aimed at consulting organizations and software or hardware technology companies that have large professional services units, according to Deb Ashton, senior vice president of customer experience and operations for the ERP vendor.
But there are still a lot of companies on older systems. So the question is, will these companies transition to this type of system or stay with what they have? …
Robert KramerAnalyst, Moor Insights & Strategy
Certinia PS Cloud is a standalone application primarily for mid-market organizations. But it is commonly used in organizations that also run general-purpose ERP systems from other vendors, including Oracle, SAP and Workday, Ashton said.
Certinia's PS Cloud functionality has a depth of capabilities around resource management and has recently built up functionalities around staffing, skills management and skills hierarchies, she said.
"We've also built some features called intelligence staffing, which leverages some predictive AI capabilities to help make recommendations for staffing and resourcing needs," she said. "This is around a philosophy of bringing advanced resource management capabilities to the table so our customers can, at scale, find the right person for the job at the right time in the right region and with the right skills."
Good functionality, limited appear
Acumatica's Professional Services Edition has good functionality and compares well with competitive products, including NetSuite, Microsoft Dynamics 365 and Infor Cloud Suite. However, there might be a limited market for it, said Robert Kramer, an analyst at Moor Insights & Strategy.
"[Acumatica has] some additional features that some of the other competitors haven't really built in yet, because it's not yet a desperate market," Kramer said. "This is a really niche ERP that's geared to focus on professional services. But it remains to be seen if there's a market for it or not."
The advantage of professional services-specific vendors is their unique features that apply to their industry. But targeting SMBs means they'll have to overcome the problem of existing ERP systems, he said.
"These companies are probably not going to switch if they already have the functionality covered by other tools," Kramer said. "Because these are smaller companies and they're not going to invest a large amount of money into their ERP if it's not necessary."
Acumatica has an advantage as a leader in the industry, and its consumption-based pricing model might make the Professional Services Edition more attractive than a user license-based model, he said.
"But there are still a lot of companies on older systems. So the question is, will these companies transition to this type of system or stay with what they have because it's easier to do an upgrade and outsource some of the tasks like project management to other vendors?" Kramer said.
Overall, the number of vendors offering professional services ERP applications is a win for customers, he said.
"There's room for a few vendors to tackle [professional services requirements], and it's good that customers have more choices," Kramer said.
Jim O'Donnell is a senior news writer for TechTarget Editorial who covers ERP and other enterprise applications.
