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»Your Project Planning Processes May Be Causing You Unneeded Stress
By David Sweetman
If you are an executive in a professional services organization, then a few minutes spent on this article may reduce your daily stress by 15 percent. I am sure you will agree that projects that go bad (and cause you immense stress) do so because they were not planned very well to begin with. Planning a professional services project is the most important and challenging part of the engagement life cycle.
It is important because it lays the foundation for the success of the project and it is challenging because three key components of a project—schedule, resourcing and expenses—need to come together in the project planning phase.
The project schedule defines which tasks are completed in what time frame and what type of resources and skills will be required to complete each task. Resourcing determines which consultants should be assigned to each of the tasks based on their skills and availability. Expenses determine how much of billed and unbilled expenses (that are not people related) should be assigned to the project, so full costs are accounted for in planning the project.
The total cost of the project will be based on the cost of people’s time, the sum of billable non-people expenses and any standard overhead that may be applied to each project on a percentage basis. So the big question is—where is the challenge in project planning?
Many professional services firms and services organizations of product companies use spreadsheets and project management systems as their planning tool. Their project schedules are created in a Microsoft Project (or Microsoft Excel) and typically sit on the engagement manager’s laptop (or maybe a shared drive). The skills database of your consulting resources is managed in spreadsheets and in word documents, containing their resumes.
Most organizations use shared drives to provide access to this information to all stakeholders. The availability of various consultants is tracked in a separate spreadsheet. The billable non-people expenses associated with each project may be tracked in yet another spreadsheet. When a services firm/organization is small and in a single office, such methods may be adequate. However as a services firm/organization grows and/or sets up offices in multiple locations, but uses a centralized pool of consultants, such manual methods begin to fall apart.
Project plans, created on spreadsheets, are not visible to other stakeholders of the project, and there may be multiple versions floating around. A delay or extension in a current project, being managed by a different manager, may cause consultants on that project to become unavailable for your project, but you may not know about it in time to create an alternative plan and notify your client, potentially affecting client satisfaction.
Non-people related expenses may be captured in your spreadsheets, but may fail to make it to the accounting team who is doing the billing, hurting project profitability. If you later choose to send an ‘additional invoice’ to the customer to cover these expenses, it may affect your client satisfaction. Consultants in another office may be working on a project and acquiring new skills that may be critical for your project, but you may not have that information handy, while staffing your project.
As a result, you may end up using consultants with lesser skills (which can hurt the project delivery) or you may be forced to use multiple people when the job could have done with one (potentially affecting project profitability). Manual solutions such as spreadsheets and desktop project tools for project planning don’t scale very well for a growing consulting firm/organization and creates challenges downstream.
Fortunately, there are software packages available in the market that address end-to-end business processes of a professional services firm/organization in an integrated manner. With every improvement in resource utilization and service delivery directly dropping to the bottom-line and with accurate billing having a direct effect on cash flow/liquidity, efficiency and effectiveness are the key ingredients for a profitable and sustainable services business.
The scope of business processes covered by packaged services industry solutions include:
• Sell: Covers processes such as marketing, lead management, pipeline management, proposals and close
• Plan: Includes processes such as project schedule planning, project resourcing and expense planning
• Deliver: This includes project and document collaboration, project reporting and skills update
• Bill: This includes time and expense capture, and support for various types of billing including time and material, fixed price, milestone, deliverables based etc.
• Analyze: This covers reporting and analytics to have visibility into all key metrics of the business such as backlog, liquidity/cash flow, utilization, profitability by project/customer/practice etc.
These packages are available from the cloud in a Software-as-a-Service (SaaS) model, so you don’t need to buy any hardware or software to run these solutions. They are very cost-effective to implement and available on a monthly/quarterly subscription fee, they are the right solutions for growing services firms. In fact, even firms with less than 50 consultants on staff can increase profitability, improve cash flow, grow sales pipeline and raise client satisfaction by deploying such solutions. But most important, such packages solve your project planning problems and hopefully, reduce your stress by 15 percent.
David Sweetman is Senior Director of Solutions Marketing for SAP Business ByDesign, responsible for professional services segment.