There was once a time when managing a project at work was fairly straightforward.
Project budget conversations are hard — they can be awkward and often come with a bit of anxiety. Sitting down with customers and sponsors to discuss unexpected costs, initial underestimation, or project delays can be enough to make anyone’s stomach churn.
But this year, due to the pandemic effect, it’s going to be even harder with unexpected expenses and cost cuts. With 2021 budgeting looming, CFOs can feel the heat already. Many businesses have to operate with a tight budget due to slower sales from the economic decline, a workforce moved remotely, and plenty of uncertainty still at large. What’s truly needed is the agility to control costs for faster course-correction.
This is where Polaris will come to your rescue. Polaris helps you optimize professional services revenue and pricing by accounting for all relevant metrics, including true resource costs, utilization, margins, and more. This way, you have accurate data for creating near-reality budgets and have complete visibility into the spends to raise red flags before it’s too late. Here are five ways you can use Polaris to help you optimize your 2021 project management and resource budget.
Optimize Revenues and Prices with SmartBudget
Projects have different types of costs associated with them. It includes the cost of resources, time spent on non-billable tasks, infrastructure, software, training, reskilling fee, travel, meals, and more. Though business travels have reduced considerably due to pandemic restrictions, you still need to track other capital and operational expenditures to ensure everything is running smoothly. For instance, setting up remote teams can require out of budget expenses for work-from-home infrastructure and new cloud technologies.
SmartBudget in Polaris helps you plan your revenues in the most optimum way by considering all costs, including resource utilization and role-based price. After all, you don’t want to win a project bid only to lose money on unaccounted resource costs and expenses. Resource utilization rates indicate how much of your team’s time is being spent on billable tasks, which directly drive the revenue. Under-utilized resources could mean that you are leaving revenue opportunities in terms of higher bench time and non-billable tasks leading to slim profit margins. Over-utilization, on the other hand, could lead to missed deadlines and delayed deliverables, increased project cost, or employee burnout and attrition. SmartBudget helps you understand these issues for better budgeting and helps you drive projects towards profitability.
It also gives you total visibility into the true costs of projects and billing rates of resources. Not all projects are made equal. For instance, a few need very highly skilled resources. Polaris makes role-based price recommendations considering the skills, certifications, and other factors. You can create a global pool of resources to pick the best available resources within the budget.
Plan for Incoming Projects
Did you know that you could potentially risk the success of 80 percent of your projects if you don’t have a streamlined process? You need accurate metrics and seamless communication across sales, services delivery, and finance. You also need end-to-end visibility across sales and project management data to estimate and calculate project-related spending. A unified system like Polaris can track and manage upcoming projects while enabling sales teams and project managers to work together for landing maximum projects, without overlapping resources.
Polaris empowers you to achieve just that. It integrates with external sales and financing tools you use to create a single source of truth for all your processes including project budgeting. Once integrated, Polaris will sync relevant data with CRM, ERP, PM, and HRMS systems that your company uses to enable resource planning and budgeting. And since this handshake is automated, delivery teams can quickly pull and plan for projects from your CRM.
Optimize Resource Allocation
Resource allocation is a critical part of project management. But the truth is, it is a challenging process, especially when you have to manage a global resource pool. You need to put the right resource into the right project at the right time to ensure the project is completed within the budget.
The SmartMatch feature in Polaris solves this problem for you. SmartMatch is an intelligent resource allocation mechanism that allows project managers to raise resource requests based on skills, resource rate, availability, location, or other criteria. What’s more interesting is the built-in recommendation engine that can suggest ideal resources for the project considering the budget. It can recommend resource allocation by the percentage of total availability or by hours per day.
And because you already have full visibility into the upcoming projects and resource requirements, you can account for reskilling and/or hiring of resources while creating project budgets and bidding.
Baseline, Track, and Course-Correct
A budget baseline is essential to request fund release from the project sponsors. It’s a reference point to measure and compare the project costs and expenses in real-time. In the real world, it’s not unusual for projects to deviate from the set budget. For instance, there could be an unforeseen onsite visit to a customer, which incurs additional expenses. Or there could be scope creep requiring a resource to spend a few extra hours on the project. Whatever the reason is, you need to track these deviations in real-time to revise and renegotiate the project budget.
SmartBeats in Polaris lets you track project progress in real-time with live resource inputs around effort and completion estimates. This data helps you to revise your budget instantly — the numbers will be an accurate expense forecast. You can track this real-time data on the dashboard or generate reports at regular intervals for all the stakeholders. Get an instant understanding of all critical project budgeting metrics at a glance, including hours, cost, financials, and other details.
Leverage Historical Data to Make Informed Decisions
Analyzing and reviewing historical project and resource budgeting data is a good practice to identify the tools, approaches, and techniques that fueled the success of those projects. You need to look into historical cost estimates, WBS examples, resource allocation approaches, and budget control tools to understand what worked and what didn’t in the past. At the end of this exercise, you will understand the monetary requirements of the project, which then serves as a benchmark for estimating and controlling the budget.
Another important takeaway from this exercise is the identification of project types that bring the most profit to your business. If you’re familiar with the Pareto principle (commonly known as the 80/20 rule), you’d know that 80 percent of your profits come from 20 percent of your projects. You need to identify the top 20 percent of your projects and allocate the maximum budget to ensure the successful completion of those projects.
Polaris: The Self-Driving PSA in Harmony with All Your Existing Solutions
Polaris is the one solution you’ll need in 2021 for all your project management and resource budgeting needs. It lets you share a project, resource, time, costs, and billing information with your ecosystem to track all project-related activities and data in real-time, enabling agility in budgeting and cost control.