Streamline Your Professional Services Firm’s Quote-to-Cash Process, Part II - The Blytheco Blog
Streamline Your Professional Services Firm’s Quote-to-Cash Process, Part II

Streamline Your Professional Services Firm’s Quote-to-Cash Process, Part II


Eliminating breakdowns in the “quote to money in the bank” process

In the first part of this series, we looked at how to speed up the time between quote to money in the bank and some of the issues that prevent that from happening. In this article, let’s review how to eliminate the breakdowns that occur.

As in most businesses, without effective leadership and collaboration, PSOs operate in silos, or on a department-by-department basis. They are narrowly focused on succeeding in their given tasks. For organizations to succeed, they must work in partnership, with support across all functions. PSOs will only prosper if business processes are aligned across all departments, teamwork is pervasive, and visibility exists company-wide.

Common breakdowns in quote-to-cash business processes

The underlying cause of poor financial performance often stems from organizational and functional process breakdowns in the quote-to-cash process:

  • Quote (presales). Poor lead qualification contributes to a high cost of sales and a lack of alignment between opportunities and service capabilities.
  • Sell, negotiate and get order (sales). Inability to articulate the service value proposition inhibits calling on the real decision-makers. This can lengthen the sales cycle and may force acceptance of unfavorable contract terms or excessive discounts.
  • Staff (initiate project execution). Inefficient resource management and poor or nonexistent skills tracking can lead to assigning the wrong resources on projects, resulting in delays and overruns.
  • Delivery (project execution). Poor alignment and handoffs between services sales and delivery lead to miss-set client expectations and acceptance of unrealistic timelines and/or deliverables.
  • Invoice and collect (billing and reconciliation). The lack of alignment across contracts, statements of work, project plans and time and expense collection can trigger invoicing errors which lead to lengthy collection cycles, rework and lost revenue.

Clients, understandably so, hate repeating discussions, requirements and agreements to disconnected sales, service delivery and finance representatives. Messy handoffs between functions inevitably cause project overruns and lengthy collection cycles which compromise client satisfaction, referrals and future business.

These organizational and process breakdowns are exacerbated by poor or non-existent systems, manual processes and data re-entry caused by a lack of integration between client relationship management (CRM), professional services automation (PSA) and enterprise resource planning (ERP) applications. The final coup de grâce in a broken quote-to -cash process is the lack of management reporting and visibility to be able to spot problems and fix them before they spin out of control.

How to fix a broken quote-to-cash process

When the quote-to-cash process is broken, the best place to start is with an assessment. Some of the areas that are effective improvement steps include:

  • Comparison to industry benchmarks shows the revenue and profit potential if improvements are made and provides the business justification for making an investment.
  • Assess competing functional roles, responsibilities, goals and measurements to reveal the underlying causes of friction and misunderstanding.
  • Conduct RACI analysis to clarify roles, goals and lines of authority to pinpoint processes where clear ownership, accountability, measurement and rewards are missing.
  • Model “as is” and “to be” business processes to lay the foundation for change and clarify roles, responsibilities and handoffs between functions.
  • Based on objective analysis, align leadership priorities.
  • Develop an actionable business plan which includes budget for new systems and applications.
  • Empower project teams to focus on the top improvement initiatives, which will likely include selecting and implementing new systems and business controls with appropriate metrics.

What it takes to get results

To drive profitability levels higher, professional services executives are taking a more holistic approach to the quote-to-cash process, perhaps the most critical of all PSO processes. Delivering services efficiently and effectively is just one area of importance in improving profit margins. Ensuring the organization is focused from the beginning on selling, delivering and collecting from the best clients who will continue to buy and use the most profitable services is paramount to success.

While there are many collaborative tools organizations can use to inform and educate their employees on which clients to target, what services to sell and at what level of expected return, the use of CRM in conjunction with PSA, each integrated with the core financial solution, offers the best chance of improving profitability.

The next article in our series will provide recommendations for integrated business applications to streamline and automate the quote-to-cash process.

Want to learn more about an integrated quote-to-cash process for your professional services organization? In our free one-hour consultation, you can learn how to get visibility into projects, consulting systems that improve profitability and much more.

Jeanne Urich, Managing Director, Service Performance Insight, has been both a professional service executive for over twenty-five years as well as a management consultant specializing in business optimization and transformation for companies engaged in delivering services. She is a world-renowned thought-leader, speaker and author on all aspects of Professional Services.

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