Professional service providers often rely on a combination of project management and financial software to digitally support their processes. This approach has historical reasons and is quite efficient for small companies, but it needs to scale better. As the organization grows, new software tools gradually complement the IT landscape.
The complexity of the system landscape continues to increase, and interface-related frictional losses impair the organization’s efficiency over time. One solution is to replace the network of standalone systems with an integrated software platform. Modern ERP systems can, for example, natively map the typical processes of a professional service company without connecting additional software tools. Compared to standalone solutions, this integrated approach has five key benefits:
Higher Data Quality
In complex system landscapes, it is unavoidable that information about an object (customer, project, etc.) is stored in different data ports simultaneously. An inconsistent database will develop over time if these entries are not regularly synchronized. Sales, for example, updates master data in CRM without informing accounting, and there are already two different data sets in the company. After a while, only some can understand which data is up-to-date.
It’s not just frustrating. Communication with customers and partners also suffers as a result. Anyone who has ever written to a contact who the addressee has not employed for a year knows how embarrassing it can be. An integrated ERP system avoids this problem by storing all data in a central database that all functional areas can access. Redundancies and version conflicts can no longer occur because there is only one aggregated data set. Experience has shown that integrated systems have a significantly higher data quality than individual solutions.
More Transparency
If each software solution contains its database, transparency suffers. On the one hand, it is difficult to determine what data is available in the company. This affects the ability of the organization to provide information to third parties. This can be problematic, especially about the information obligation of the GDPR. On the other hand, it is challenging to create reliable critical figures from the data fragments. The monitoring of the company suffers as a result.
On the other hand, an integrated ERP system stores all data in a central database. All company information, contacts, and activities are stored in one place. They can be analyzed, processed, and passed on to third parties without tedious research work—the external ability to provide information and control benefits from this.
More Efficient Processes
Interfaces between individual solutions can reduce the coordination effort but not eliminate it. The connections between business processes could be more superficial for that. There is always a residual expense. Your employees still have to coordinate operations with other departments, assign tasks to those responsible and submit data that is not part of the interface. These process breaks lead to delays and affect process efficiency.
Integrated software systems, on the other hand, map all business processes within one platform. As a result, there are fewer process breaks, and the coordination effort is reduced. Manual data transfer via import/export is no longer necessary, as all business areas share a common database. Workflows and communication processes can be managed within the system and partially automated.
Lower Maintenance Costs
Maintaining a network of point solutions can be time-consuming and expensive. On the one hand, every software tool has to be maintained and updated. On the other hand, the interfaces also increase the maintenance effort. After each update, IT has to check whether the data exchange is still working. If there are problems, she must contact the software vendor’s support and request assistance. Sometimes, the responsibilities could be more precise because several software solutions are involved. IT may have to mediate between the various providers. And internal tech support is also more complex if each department runs its tools.
It requires additional resources to keep the various individual solutions running. These costs burden professional service providers whose IT is separate from their core business. Integrated ERP systems are much easier to maintain because maintenance is limited to a single software platform. There are no interfaces to other systems; in case of problems, a contact person is available for all technical questions. At the same time, internal support costs are reduced because IT only has to look after one software solution. Companies with an integrated software system can manage with a minor IT department.
Easier Scalability
The increasing complexity of a network of individual solutions can develop into a brake on growth. With each additional software tool, the maintenance effort increases, the IT is more burdened, and the process efficiency decreases since the operational users spend more time coordinating tasks. In some cases, capacity expansion is no longer worthwhile because the increasing complexity eats up the software-related efficiency gains. The organically grown software patchwork quilt can no longer cope with further growth.
Integrated ERP systems are designed to cover the entire process landscape of a company. Suppose the company grows and connects additional areas of responsibility to the IT landscape. In that case, it only has to buy additional licenses for the missing ERP functions and train the users. This does not increase the complexity of the IT landscape. The organization only uses a more significant part of the ERP software.
Summarized
Some professional services companies should pay more attention to their IT infrastructure. Instead of designing an IT strategy, they would create a new tool when a department needs software support. Gradually, this creates a complex software patchwork that causes process breaks, ties up IT capacities, and frustrates the workforce. At some point, the company has to take action and curb the proliferation of software tools.
An alternative is to rely on an integrated IT system (e.g., an ERP solution) at an early stage, which maps a large part of the desired functions on the platform side and largely avoids interfaces. Professional service providers benefit from higher data quality, transparency, and lower IT costs. There is indeed special software that still has to be linked to the IT landscape via an interface. However, classic project management tools are no longer necessarily part of it. Modern ERP systems have caught up a lot in this area.
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