How effectively are you planning for profit?
Planning. Of course you do it. What professional services company doesn’t?
Confirm the scope, schedule tasks, identify required resources: it’s all part of the process.
But there, precisely, is the problem. Far too often, project planning in professional services is nothing more than a part of the process; a box to be ticked; a mundane administrative task that bears little resemblance to what actually gets delivered, when and by whom.
Maybe it’s over-zealousness: a desire to impress clients and help win the bid. Maybe it’s over-confidence: a belief that you can (or should be able to) deliver far faster than you typically do.
Whatever the reason, project planning in professional services too often overlooks the reality of prior experience and present and future workload.
So put down your A2 sheets and colored pens for a moment, and remember the point of planning. It’s not so you can say you’ve planned: it’s to guide delivery and secure profit.
But if you’re planning for profit, it needs very quickly to return to the real world.
Here, clients will be fickle. Resources will be finite. And there will be hitches along the way. You can’t foresee all of these, but you can build in realistic contingency at each stage.
In professional services, the biggest hazard to delivery is availability of resources: your people. Put simply, if key staff are booked to work on other projects, they won’t be able to work on yours – and your ideal timelines and schedules will become irrelevant.
So smart planning involves checking the pipeline: not only being aware of current projects, but also future commitments for the business. It involves checking other plans, to see who your colleagues are planning to use, where and when – then building your plan around those. That goes for the sales team too.
Above all, planning is not a one-off activity. It needs to take place throughout the project lifecycle – with plans being reviewed and adapted where necessary.
Learning from the past
Once upon a time, someone in your business decided how long a specific task – a document audit, say – should take. Since then, every time anyone has planned a project involving a document audit, chances are they’ve applied the timelines allocated long, long ago. And with increasing frequency, those timelines have been exceeded.
If so, here’s an alternative approach that can transform the accuracy and effectiveness of your planning. Look at how long tasks actually take to perform. Review previous projects and discover that instead of 5 days, a document audit typically takes 8.
Armed with that knowledge, you can plan accordingly – allocating the right amount of time to the task, and ensuring that other tasks that are dependent on the audit being complete aren’t scheduled too early.
This of course may mean that your total estimated costs will rise. But this is the first step to profitability; making sure that you give clients accurate estimates for the work required, based on realistic plans.
The lesson here is clear: if you plan properly, taking account of forthcoming workload and experience gained on previous projects, you can calculate costs and timings more accurately.
That in turn means you can make more informed decisions about the cost estimate and delivery dates you give to your clients – and you are far, far better positioned for profitability from the outset.
So what professional services organizations need is a way to gather all that information and apply it within their planning.
Five ways to make sure your plans are poised for successful, profitable project delivery:
- Plans are based on templates and timings that reflect your organization’s processes and experience
- Plans take account of existing and future projects
- Plans include realistic contingencies
- Plans are working documents, updated as projects develop
- Plans are available to staff across the business – from service delivery to sales, finance to HR
Learn more about how to effectively plan for profit by downloading our free ebook ' The Five P's of Profitable Projects and Programs in Professional Services '.