Microsoft chooses its PSA partner

Microsoft Corp. has just forged a partnership with a British company to exploit what some analysts predict will be a business worth more than 3 billion euros by 2004.

The business has been dubbed "professional services automation" (PSA) and the venture picked out by Bill Gates' mammoth company is SharpOWL.

PSA is a suite of applications that enables organisations to become more productive by employing their time better. According to the Aberdeen Group Inc. consultancy, which coined the term, the global market for such time-saving software (for billing, time and expense management, etc) will grow tenfold from US$306 million (327 million euros) in 2000 to $3.06 billion (3.27 billion euros) in 2004. Vendors claim services companies, realising they can get a rapid return on their investment, will be adopting PSA.

Microsoft announced on Wednesday that it was positioning its Project software for the PSA market, adding it to the set of applications offered by the UK's Sharp-OWL, considered the European market leader. "We are doing it over here first because it's a little further ahead than in the US," says Zena Girdler, Project marketing manager for Microsoft. "We have chosen to partner exclusively with SharpOWL as theirs is the only complete solution that runs seamlessly alongside MS Project."

SharpOWL grew out of the development arm of Foundation Systems, a leading reseller of financial software.

Len Palmer, managing director of SharpOWL, says: "Foundation Systems began to develop a time management capability about three years ago as an extension to its offering in the general accounting market.

"We developed this considerably to work with CRM (customer relationship management) and other complex systems. Then, about a year to 18 months ago, there seemed to be a recognition among analysts like Aberdeen and Gartner of an emerging marketplace that matched the ERP (Enterprise Resource Planning) and CRM developments over the past several years. We felt that PSA was very much descriptive of what we did."

Aberdeen ran a report in January in which it identified 20 players in the PSA market, one of which was SharpOWL. Some come from project management and accounting areas, others are traditional ERP vendors saying they fit the needs of service organisations as well. SharpOWL is also working with a project management consultancy, Pcubed, and has more than a hundred customers, including IBM, BP, SmithKlineBeecham, the Ministry of Defence and PR company Text 100.

The product is targeted mainly at firms with 700-800 employees and can cost £150,000 to £500,000 (240,000 euros-800,000 euros) to implement. Smaller companies could buy just the modules they need most or rent applications from an ASP (application service provider). In the case of IT services firm Misys, it has seen a 6 percent increase in its billable revenues. The software picked up on consultants' time recorded on the system that had not been billed for and spotted time spent outside a project that could mean additional charges to be collected.

At a time when there is a serious shortage of skilled IT workers, PSA promises to help companies get the most out of the staff they possess.

Palmer cites one significant difference that may make PSA the acronym of the future: "With ERP, it can tell manufacturers what stock they have on their shelves and it can lie there a week. When you're dealing with an hour of a consultant's time, if that's lost, it's gone forever and can never be billed again. That's at the heart of what we're doing [with PSA]."

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