How Can Large Professional Firms Drive Project Profitability In a Hybrid Digital Workplace?
Professional services businesses are losing revenue through gaps and inefficiencies and need newer, simpler ways to improve their revenue and minimize revenue leakages while finding ways to improve resource billability and utilization.
As a global professional services firm or project-based enterprise, we understand that your business leaders and project managers frequently ask this question: how many hours did our consultants spend on this client, on that project, on those tasks for billing?
Ever looked to bid on a global project and unsure of who is available and when? Or struggled to keep your project on-time and within budget?
Accurate time tracking is critical for all large global services firms as it helps to answer the two most important questions – “How much should we bill?” and “How much profit did a project generate?” Additionally, the enterprise time data helps to understand whether your consultants are working efficiently, are you bidding future projects competitively, are you executing projects on time and budget, are your employees missing to track billable hours, and more.
However, the biggest challenge facing enterprises with the hybrid, globally distributed workforce is the siloed time data.
Due to their complex operating landscape, most of the enterprise businesses have their project time data spread across distributed systems such as CRM, PSA, HCM, payroll, project management, on-premise databases, and more. A lack of up-to-date and unified time data leads to costing and billing inaccuracies which eventually result in revenue leakages and reduced project profitability. Every minute of missed billable time could cost an enterprise millions of dollars.
Connecting Agility and Speed to Profitability
Manual or disparate time capture platforms, delay in costing and billing due to lack of real-time connectivity within the organization’s ecosystem, and lack of visibility are challenges faced by professional services organizations to implement operational agility.
If you are managing a global project have you ever found yourself discovering that half of your consultants are still logging project timesheets manually while the other half are using multiple legacy or native-grown platforms? When you try to get real-time visibility on project status, allocate resources, and properly bill the client, you spend more time trying to make sense of the data than you’d like?
Imagine for a ten thousand person company they have around 20 million hours at their disposal in any year. But can you track the billable time for all your employees around the world?
According to SPI, 600 hours have been spent by each employee towards non-billable time in 2020 alone. Multiply that by your ten thousand employees and that is 6 million hours lost in project revenue.
You need a platform that can tell you where your global employees spent their billable time instead of you having to monitor project time within a fragmented ecosystem. A modern platform helps organizations reduce timesheet administrative tasks by 75%, recovering hidden billable time, and providing accurate time tracking on resource utilization and client billing.
Propelled by a unified system, driven by deeper insights, and real-time analytics, enterprises can meet the dynamic demands of their business and accelerate business processes to increase profitability.
“By moving from manual timesheets to an intelligent time tracking platform, you can increase your employee billable utilization and drive a higher annual revenue per employee. For example, with a 5% change in resource utilization, you can increase your project revenue by $20-$30K per employee. Multiply that by the number of billable employees, and you have real-time visibility to added annual project revenue that correlates with your profitability, resource utilization, and bill rates.”
Track Estimates Vs. Actuals in Real Time
When working on multiple projects, you need to closely monitor the hours and costs every day to keep projects on track and make course corrections before overruns occur. One of the biggest problems your project managers and business leaders face, with their team, is understanding what they have left to deliver, are we on track? What is the estimated time to complete? To allow managers to track estimates against actuals, the time tracking software lets them set target hours and estimated cost for every project.
You need a project dashboard that gives you a centralized view of your projects with early warning signs, and minimizing your project overruns and reducing potential revenue leakage. The real-time data across your connected enterprise will give a bigger picture of your project time, costs, resources, and billing, enabling managers to make proactive and data-driven decisions to reduce project overheads and maximize profits.
Improve Billable Hours
A key lever for professional services organizations to improve revenues is around how much more billable time they can get from their resources, usually tracked as ‘Billable Hours’. This is important for Time & Material engagements but also a good indicator for how well the initial contract terms are working and if any renegotiation is needed.
It is a known fact that you cannot change what you can’t measure. So firms looking to manage and grow billable hours need a way to measure this metric across their global, disparate and remote workforce. Translating revenue estimates into clear targets by groups, departments and even individuals will align everyone to work towards the same shared goal and synergize the professional services firm.
Create Reality-based Forecasts in Agile Projects
Accurate project time data is the fuel that drives near-reality project forecasting and budgeting. With a global time tracking solution, enterprises can accurately track time to get reliable data that can be used for better project forecasting. Furthermore, complete visibility into the project pipeline, resources, and skill requirements ensures that you can better predict resource needs when bidding for projects. You can even analyze resource availability by skill set to proactively hire or retrain resources to deliver projects on time.
As the project progresses, managers can use the project time tracking capabilities to plan and manage delivery in the now. The ability to see how much time was spent on a billable task, the remaining work, and the time required to finish the remaining work helps to avoid over/under allocation of resources and complete projects within the set time and budget constraints.
Achieve Global Governance and Compliance
In the pursuit of financial metrics for their services firms – revenues, profits, margins & more – many organizations overlook that the key to orchestrating global delivery teams is to enforce governance processes and workflows while making it simple to execute and report on projects, tasks and engagements. This is even more needed with the rise of the remote, hybrid and WFA (work from anywhere) project workers. To make any sense of all the project, work and time data, the teams need to adhere to guidelines so that these can be easily consolidated and reported on without adding overheads.
Also, labor compliance which has been in focus over the last few years especially with professional services firms being hit with multiple overtime, meal breaks and other labor litigations closely ties with how time is spent, in what measure and on what tasks. Having time data handy and leveraging that with local pay rules information informs any IT services or consulting firm if they are on track w.r.t their mandatory compliance needs.
Switch to The Unified, Enterprise-ready Time Tracking Platform
Recently, we gathered data from 850 businesses on the state of the workforce after the pandemic and 49 percent of businesses revealed that they plan to make remote work a permanent option for roles that would allow it. With a unified time tracking system, it does not matter whether an employee is working from home or from the office space. All data around projects and time will be automatically gathered and stored in a cloud infrastructure – making it easy to access information from anywhere and at any time. In addition, the mobile app simplifies time tracking further for personnel who may be away from their computers. A modern time tracking software easily integrates with other applications your enterprise uses to create a structured and connected way to share time data.
We’ve all heard time and again that what gets measured gets managed. Now that remote employees have become an inevitable part of your workforce, you need a unified time tracking solution to uncover hidden efficiencies and profit opportunities.
Want to see how Replicon can help your enterprise unify time tracking and increase profits? Talk to our experts today.