Taking the Element of Chance out of Project Profitability: Five Factors to Watch
Project profitability can be won or lost at the execution level. Here are five critical control points that project managers should have front-of-mind when looking for ways to improve project delivery in professional services and, ultimately, their companies’ fiscal health.
1. Master the details
The more details that project managers can efficiently marshall—task status, staff time allocated vs spent, line-by-line projected and actual costs—the more empowered they are to deliver to the bottom line. Up-to-the minute information is vital to spotting project resource or scheduling problems before they become problems—having access to reports only daily or weekly won’t cut it.
2. Provide a single source of the truth
From the portfolio and program level to the trenches, entire organizations benefit from accessing up-to-date project information. Individual players can better manage their own priorities, and those seeking the strategic view can spot the warning signs before the next bump in the road. Role-specific views are valuable only when they tie into centralized information for each project or program. This saves a tremendous amount of time in reconciling varying reports and accounts. And time is money.
3. Be alert to what’s important
Up-to-the-minute project data means you can customize the alerts you receive according to what’s important to you and your team—helping you navigate the most immediate threats to delivery and profitability. For example, knowing when a resource threshold has been crossed will help you respond instantly and effectively.
4. Watch expenditures and respond with authority
It’s absolutely critical to know where project costs are against budget and initial estimates. Knowing exactly what you’ve spent—and what you expect to spend—allows you to quickly calculate the impact of unforeseeable changes. Changes in scope and timeline can be absorbed or added to the project bill, while seeing when tasks are completed early can increase your margins.
5. Eliminate unwelcome billing surprises
No client likes to make expected payments through the project, then be hit with a large end-of-project invoice that reflects changes in scope throughout the life of the engagement. Presenting a client with accurate, up-to-the-minute billing eliminates nasty surprises that can turn into costly disputes and damaged relationships. This transparency helps project professionals better manage client expectations, providing an accurate picture of what’s been spent—and why.