Common Pitfalls in Professional Services Organizations & How to Avoid Them (2/3)

The professional services organization (PSO) landscape is changing — employees are harder to recruit and retain, a globalized marketplace increases competition for clients, clients want more for less, and management is often too focused on short-term firefighting instead of long-term strategy. As Thomas J. DeLong (Senior Fellow at Harvard Business School) puts it, “In the past, the work of [PSOs] was a gentleman’s game — and now it’s a blood sport.”

This is the second article in a three-part series that isolates three major pain points for PSOs today, and offers actionable steps you can take to address them.

If you missed our first post on project planning, click here.

Problem 2: Project Visibility


If a project diverges from its initial estimate, it’s better to warn clients of delays or cost overruns well before they happen. Still, it’s easy to miss the warning signs if you can’t track the status of projects in real-time. If you lack decent project visibility, there are a few challenges you can expect to run into:

 

 

 

Client expectations often change over the course of a project

69 percent of PSOs list “managing changing customer expectations” as one of the most prevalent and daunting challenges they face, which isn’t shocking. When a client changes priorities mid-project, it typically increases the project’s scope by adding costs and extending timelines, and it can be difficult to gauge the feasibility and impact of these changes. Will you have to take a resource from a different project, and can you? Will a delayed timeline keep someone from starting a new project? Can you adjust to the desired changes without surpassing your client’s price threshold? Variations in client priorities and expectations are practically a given, so you need to be prepared to address these situations as they crop up.

 

Problems are only addressed after the fact

Harvard Business School Senior Fellow Thomas J. DeLong notes that “senior partners have often preferred to respond to challenges and opportunities as they arise, rather than plan for them.” This might explain why, according to an ESSU survey, roughly 30 percent of projects end up overrun.

The thing is, when projects are organized on more of an ad-hoc basis, you’re far more likely to run into otherwise avoidable setbacks. Not only is this bad news for you in terms of project overrun and additional costs incurred to your business, but it also prevents you from keeping your clients fully apprised of new developments. While no one can predict every challenge or setback that might occur down the line, failure to note patterns and anticipate highly likely setbacks can hinder your ability to successfully manage customer expectations.

Best practices

Pinpoint issues and spot trends in real-time

PSOs rate “poor communication and understanding of client expectations” as the second-highest pressure for their business, just under “managing changing client expectations.” Though the customer is always right, and it’s impossible to prepare for every possible whim and deviation, it’s important to anticipate changes and minimize additional costs as much as possible (especially with fixed bid projects) . And, without systems in place to collect and review in-progress project data, it’s almost impossible to do so.

Look for a solution that allows you to aggregate real-time data throughout the course of a project — you want to be able to make quick comparisons between actual data and estimates to know as soon possible when you stray from projected costs or timelines. In addition, you want to implement a system that employees can access at any time and from anywhere, as many PSO employees are part of a remote or traveling workforce.

Emphasize granular visibility

If you can only see the bottom line of how time was spent, and not the details behind it, then chances are the little project visibility you have won’t be that useful to you. A vague, catch-all description for how time is being spent (example: “planning”) isn’t good enough — you need a to be able to capture granular information that ties back to specific resources, tasks, activities, and costs for each. You want to be able to slice and dice the data in a variety of different ways to capture the most relevant insights, and it’s difficult to do so without access to specific decisions made, resources implemented, and time spent every step of the way. This can make the difference between spotting actual patterns and trends in your business operations, or only spotting obvious outliers.

At the end of the day, you can only glean so much from the bottom line. If certain projects consistently aren’t performing, don’t just look at profitability at a consolidated level — drill down to a resource, project, and practice level to find out where things went wrong

Check back on Monday for Part 3 of our series, or subscribe to the blog by entering your email address below.

 

Regina Mullen
ABOUT THE AUTHOR
Regina Mullen
Regina is the Workforce Management Expert & Content Marketing Associate for Replicon. Replicon provides award-winning products that make it easy to manage your workforce. With complete solution sets for client billing, project costing, and time and attendance management, Replicon enables the capture, administration, and optimization of your most underutilized and important asset: time.
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