A primary key to project profitability is analyst insight. This is based on data from multiple industry surveys. One major survey was conducted by The Aberdeen Group. They conducted a survey designed to illustrate clear reasons top-performing organizations place organizational emphasis on resource scheduling and augmented time tracking.
The survey showed the impact these capabilities have on delivering profitable projects. Industry respondents to the Aberdeen survey indicated that 33 percent of all those who responded said that project planning and resource scheduling have been and continue to be misaligned. This can only lead to unfulfilled promises and ineffective project execution.
For project managers, designing an effective project plan while sticking diligently to budgets and timelines, means being agile enough to also please customers.
Delivering profitable projects for their organization may be the goal, but without the ability to verify accountability, time investments, project cost variances and all the other unseen nuances can mean inefficiencies that gather momentum, and make big cost deficits that are sometimes completely unseen.
Some well established ways to improve any project’s profitability through effective utilization of resource scheduling include:
1) Engagement of Profit Margin Expansion Through Cost Savings
Profit margin expansion can only come from expanding the boundaries of your company or project’s profitability. There are countless processes that go on to generate this profitability – many of these processes occur outside the identifiable boundaries of the project itself.
If a manager doesn’t have the tools or resources needed – there is an immediate cost and effectiveness hole, and a suboptimal outcome regardless of how hard one works.
When both employees and resources are allocated effectively and efficiently, new margins of cost savings are opened and identified. Now a focus on how to expand this new margin of potential has just been optimized.
2) Grow Project Profitability Through Predetermined Time Standards
The right employee, correctly focused labor, budget and infrastructure precision make a difference for profit margin realization. Sometimes very significantly. Having the ability to track time accurately, means having the ability to effectively apply labor.
Being able to identify how long one uses a tool such as a cell phone – and what inherent costs are involved if this tool use is abused by an employee, even moderately – can make significant differences for a long-term budget if more than just one employee is covertly engaging this behavior.
Managers need full-visibility with accurate time and task management tools in order to prevent occurrences such as over billing, and over or under paying for a project. Application of predetermined time-standards is one way to identify tighter labor efficiencies by realistically trimming motion-tasks down to their base-movements.
3) Grow Project Profitability Through Re-Enforcement of Best Practices
A full 33 percent of all survey respondents also indicated that best practices are not enforced across the organization. Regardless if this is a simple lack of documentation – top performing employees are not usually assigned broadly, which also prevents knowledge-sharing. And when it comes to the importance of time tracking, project-based organizations are equally hindered.
Another full 32 percent of industry respondents reported inefficient or manual processes for precision tasks like time-tracking that are far more effective when automated. Project cost-sinks can permeate a project if analytic eyes are not making constant re-evaluations.
When deficit cost numbers are totaled – someones job could be the result. For example: how do labor costs affect research and development projects? It is simply foolish to think anyone can track work efforts and hours and the budget impact they carry without efficient, reliable numbers.
The tools are available. For your professional services strategy assessment contact Socius Professional Service Solutions now.