Managing Project Revenues In A Services Business

Each persona in a professional services organization has a specific role to fulfill. A CFO or the Head of Professional Services is responsible for managing the company’s finances and revenue, including future project work and forecasting; a COO manages the day-to-day operational metrics and resources; and a Services Delivery Head handles every aspect of projects and practice management, ensuring everything stays on-track and on-budget. In theory, all three roles can successfully operate on their own with little overlap between them – and this has been the existing practice in professional services up till now. But the reality is slowly dawning on the services industry: that these roles actually see the world from three different perspectives, often with three distinct sets of data, and subsequently come to different conclusions, leaving senior leadership with different versions of truth. 

With this lack of end to end workflow visibility, there is no overarching, real-time, or actionable view on how the business operates day to day. There is no cohesion between roles, diminished accuracy on all available data, and weeks of wasted time and money. In short: there is no unified, holistic view governing the entire project organization as one whole. 

100% account of resource time
And here’s the trouble: these businesses are not taking into account 100% of resource time for calculating business metrics. Time spent by resources on projects and tasks, etc. is a key component of all metrics; it is required to identify concealed patterns within an organization’s body of data, and it can’t be done halfway. Without the complete picture into all time – whether project, non-project, billable and nonbillable, all metrics around profitability, utilization, project revenues, billing and costing are inaccurate – and so are the decisions based on them. It’s the long road to project failure. 

Consistent metrics
But the problems don’t stop there. Without a consistent, formalized methodology for measuring these metrics across an organization, each team – or even team member – will interpret data differently, resulting in error, conflict and confusion. Deliberately establishing a standard definition for an organization’s metrics is the only way to set the record straight. Business leaders should also understand how they work, and why they are determined the way they are. This enables business leaders to understand the discrepancies between a project’s estimates and actuals, and lends credibility to pricing, resource management, and timeline estimation for future work. 

Critical collaboration
Accurate metrics are central to any organization’s success, but they aren’t everything. Teams need to collaborate within a business, and that adds yet another layer of complexity. Deliberate communication between sales and delivery teams, for example, is critical when it comes to meeting the client’s requirements. Sales should be well aware of the timeline’s viability, what resources are available, and what kind of costs can fit the budget – as briefed by the delivery team. Staffing can also be determined by collaboration between the project manager and operations manager – either way, it’s not a one-person job. Equally important is for both delivery and sales to coordinate with the finance team on initial bids, changes in scope, budgeting, and invoicing for a streamlined final product.

Only by collaborating on a single source of truth for all personas – time – can a professional services organization truly understand and effectively utilize their operational metrics. With everyone on the same page, services firms can account for 100% of their costs and resource time and get true visibility into their operations, project execution, and financial performance.

How can Replicon help?

Investing in an effective solution can revolutionize how you manage your professional services. Interested in how Replicon’s Professional Services Automation can help meet your organization’s project and resource management needs? Request a customized demo to learn more:

 

Get A Customized Demo →

 

 

Sara Longini
ABOUT THE AUTHOR
Sara Longini
Sara works in Content Marketing and Social Media at 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.
Get started today.
Set up a free trial based on your business needs. Start Free Trial

The Future of Project Resource Management in Professional Services

When it comes to PSA, automation is (literally) the name of the game. We turn to machine learning and AI to make our processes easier and cut down on the…Read More

If You Want Profitability, You Cannot Ignore Resource Utilization

After an enormously challenging year, professional services firms are trying to get back on track to achieve their growth and profitability goals. To do so, it has become more important…Read More

Reduce Revenue Leakage and Drive Efficiency in Professional Services

Imagine traveling in a boat that has a small hole at the bottom. The boat is slowly filling with water, and unless you do something to fix that hole, it…Read More

Using shared services? These five technologies are a must

As organizations continue to scrutinize operating costs and look for areas to drive efficiencies, shared services centers (SSCs) are a no-brainer. The concept of a multi-function SSC has been around…Read More

Miscalculating wages by a few cents led to this company paying a six-figure lawsuit

West Marine Products, which operates a chain of retail stores across the United States specializing in boating supply and fishing equipment, recently settled a class action lawsuit involving 707 former…Read More

Employee time tracking is dead

iBeacons, Bluetooth Low Energy, Proximity sensing and the obsolescence of time tracking as we know it. Businesses have to track the time their employees work for a variety of reasons,…Read More
  • Polaris
  • Time & Project Insights
  • Time & Projects Solutions
  • Replicon Products
  • Replicon Users
  • Cloud
  • Corporate
  • Professional Services Management
  • Shared Services Management
  • Time and Attendance Management
  • Customer Feature
  • Time Intelligence
  • Industry News
  • Global Compliance Updates