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:
