Seven Reasons Why Professional Services Companies Should Go Cloud

By TechZone360 Special Guest
David Sweetman , Senior Director of Product Marketing for SAP Business ByDesign
January 15, 2013

Professional Services organizations are adopting cloud solutions in droves; they are a perfect match for each other. No other industry segment comes even close. In this article, I will identify seven reasons why Professional Services organizations should choose a cloud solution to run their business.

Reason #1: Geographically distributed consultant team working together on client deliverables:

In most services organizations, the consultants are distributed across geographies. This poses an ongoing challenge in being able to maintain high levels of productivity while working together on client projects. The financial model of the firms, which is driven by consultant utilization and project margins, places an even more emphasis on productivity. Most small to mid-sized professional services firms use Microsoft Project for tracking their projects and e-mail for sharing project plans and documents. The challenge with this approach is that it creates the possibility of multiple versions of the same document floating around making management, resourcing and billing complex and reconciliation even harder.   On the other hand, the cloud-based solutions lend themselves to managing document and project collaboration capabilities inside of the solution, allowing geographically distributed consultants, including third party consultants and the client to work as one team on deliverables. 

Cloud solutions enable users to create template structures for a project. Using these templates, once a project manager has created an overall project plan, a user can invite their project team members into an easily accessible central workspace accessible from anywhere, where they can upload and share files of all types and sizes with their team. These include implementation documents, articles, reports and plans. Since every user accesses the same repository, it is always current – all version control issues go away. Team members can also carry out project-related discussions, create and manage activities or create and manage actions items within such a solution. Additionally, you can use powerful search capabilities to locate the file or the discussion you need in seconds. New members and clients can be added to the project in minutes, so new members joining the team can quickly come up to speed and become productive. This capability allows geographically distributed team members to work on the same project (including contractors and client team members) to share information and record discussions, as if they were located in the same office. Such collaboration reduces confusion, eliminates multiple versions of the truth and decreases the overhead from communication gaps. The collaboration and workflow capabilities also keep every team member informed at all times about the status of their projects. As a result the firm is better positioned to repeatedly deliver consistent client projects on time, on budget and enhance their reputation.

Reason #2: Consulting business continuity can be disrupted by natural disasters and not having the right files in the right place at the right time

Based on recent events, we have seen when a natural disaster such as an earthquake or a hurricane strikes an area, facilities and power could be shut down for days at a time. In such situations, the damage is limited to local areas, while the rest of the country continues to function. For a mid-sized consulting firm, if the headquarters is located in an affected area, their IT systems are off- line or even lost and their consultants, working in other regions of the country, would not be able to access their client and project documents. A cloud system, where the vendor operates mirrored-data centers in multiple regions of the world to ensure high availability, will continue to run despite of such issues. As a result, client work, as well as back office work such as billing will never be disrupted.

Reason #3: Better Security: 

A cloud solution is typically hosted at a certified service provider, whose data center has passed SAS 70 type II audit. The SAS 70 certification was developed by the American Institute of Certified Public Accountants (AICPA) to annually audit the effectiveness of operations, controls and safeguards to host and process data. Since your alternative is to run the software on computers within your own data center, unless you hire IT security experts to ensure you have built similar controls within your own data center, your data will almost always be more secure in a cloud environment. This is even more critical if you have multiple sites, so in case of running it in-house you would be going over the Internet with possibly less security than cloud solutions offer.

Reason #4: Better Uptime:

The Cloud solution providers install sophisticated remote monitoring and diagnostic software on their servers, so their IT operations can identify and address any potential performance bottlenecks or other issues before you even see them. As a result, the availability and uptime on cloud-based software is likely to be as good as or better than on-premise software – and at a lower cost of ownership.

Reason #5: More for less: 

Mid-sized professional services organizations have limited IT budgets and resources.   In-house solutions typically require ongoing upgrades which need to be budgeted and planned for. Since a cloud solution is always current and new functionality is pushed automatically to the user, you no longer have to budget for ‘upgrades’. As soon as new capabilities are available in the product, you can start using them immediately, without needing to wait for them. This allows you to be current with latest ‘releases’, but more important, you don’t need to allocate a part of your budget for consultants to upgrade the software on an ongoing basis. In addition, with a cloud solution, you don’t need any in-house IT operations capability to do backups, manage security, monitor availability and perform upgrades. As a result, you do not need to hire expertise to do these tasks. Since the service provider, who takes on these tasks in a cloud model, has a large customer base, they are able to spread their costs over a large number of users. As a result, you truly get more for less with a cloud model.

Reason #6: No upfront investment required and an elastic model

With the cloud model, you will not need to purchase any hardware or software to install the solution. The software is hosted on a certified service provider’s data center and delivered via the Internet. Your consultants just need a browser on their computers, an Internet connection and pay a one-time small setup fee and monthly subscription fees. As a result, you completely eliminate the need to make big capital outlays needed to install the system. This aligns well with the cash-flow driven business model of a professional services firm.

Another advantage is that the cloud model is elastic. You do not need to buy any additional licenses than what they need now – you have the flexibility to add users in future as you hire more consultants or operations employees. You will not need to purchase any hardware or software to add those users. This also aligns well with cash flow driven business model of services firms.

Reason #7: Mobility

Consultants are always on the go and their time is literally money – any amount of time spent on administrative tasks is the time they are not working on the engagement that can be billed to their clients. Cloud-based professional services solutions integrate with mobile technology to reduce the administrative overhead and increase velocity of the information flow. For example, they allow consultants to take pictures of their receipts, get sign offs from their customers and record time on their iPhone or iPad while they are with the client on-site. It not only reduces their administrative time, but also speeds billing - as opposed to the old days when a consultant, so engrossed in the problems he/she is solving for the client, would delay entering their time and expenses causing delays in billing, issue escalations and reporting.

The seven reasons above show that professional services organizations can significantly benefit from deploying a SaaS based solution to run their business. A comprehensive cloud solution should not only address their core business processes for selling, planning, delivery and billing (figure above), but more importantly it should allow them to gain operational excellence at low cost of ownership and at a significantly lower risk of disruption.

David Sweetman is Senior Director of Product Marketing for SAP Business ByDesign, responsible for professional services segment.

Edited by Brooke Neuman

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