Understanding the Importance of Effective Project Management on Project Profitability
In our previous post we explored the 7 Key Factors Driving Project Success if Professional Services. In a highly competitive environment such as Professional Services, every aspect of efficient project management impacts every other aspect of the business.
Every aspect also drives continuous improvement; which is the ‘holy grail’ for any professional services company. It applies whatever field you’re in, from marketing to consulting, technology, telecoms, public sector, private sector, creative, healthcare, even internal IT services…the goals are the same or similar – to increase client satisfaction and drive profitability.
However, these goals are less and less easy to attain. It’s a competitive market out there, no matter what field you operate in. Meaning you have to be better than the competition. You have to make a difference by being different. And that is very much a team effort.
All companies’ margins are squeezed and all companies are up against really tough challenges. As a professional service organisation you have to stand out to drive the real competitive advantage. You have to make a difference by being different.
The good news is more and more businesses are relying on the expertise of PSOs to help them analyse and solve their own challenges or to manage change. Meaning the business and opportunities are out there. However, the main problem for many PSOs is that revenue and profitability aren’t growing as fast. Customer budgets are shrinking; new contractual approaches like outcome-based engagements are becoming more popular. That places more risk on you. When project requirements change, as they inevitably do, your margins are hit – and a delay in one project has knock-on consequences for others.
And in many cases - while business development keeps chasing new and bigger deals, your vital talent is already spread too thinly, putting teams under massive pressure and increasing risks even further.
So, back to your fee earners. They might think that the nuts and bolts of project management are just housekeeping tasks.
Of course they appreciate the importance of profitability but they tend to regard that as a function of the big flourish, the big idea, the major account win; you know, the sort of ‘headline-grabbing’ stuff.
But imagine your PSO is a Formula One driver. He might be the one who gets to shake the champagne bottle at the end of the race, but he’s also the one who appreciates the value of a tip-top team of mechanics and an engine where every part functioned exactly as it was supposed to…at its best, every time. It’s not just the driver who makes a difference.
This is true of your PSO – every team member has a part to play in effective project management and profitable service delivery.
So ask yourself this question? Do you have the processes and tools in place for hyper efficient project management, ensuring everybody is contributing to project profitability.If the answer is no, or you are looking for improvements, then we recommend watching our recent webinar on Better Business Performance for Professional Services
If you would like to see how leading professional service organisations are improving the repeatability, efficiency and quality of professional services delivery why not watch our Free Ondemand Webinar - Better Business Performance for PSOs .