Improve Disconnected Processes Affecting Your Organization – Part 1 of 5: Project Management and Project Accounting

Many PSOs struggle to implement best practices efficiently and with the flexibility needed to handle everyday challenges that arise. Imagine the time and frustration (not to mention the costs) you'd save if you no longer had to bury yourself in multiple spreadsheets every time you wanted a quick look at the organization's performance. With multiple systems and disconnected data spread across many parts of an organization, project managers are handling projects in one location and financials in another – and how do you reconcile the two? Not being able to match project management and project accounting data is a common scenario with PSOs. Using pieced together tools to operate your organization is costly and will directly affect your bottom line which is why a standard, integrated solution needs to be in place so project managers can truly understand their project costs and project status. 

Overcome the Challenges

The first and most important step PSOs can take is to foundationally understand the project life cycle and how it is actually being managed.  What are your assumptions of the project? Do they match with the actual cost of the project? Even more important – get connected – the delivery and finance teams need to communicate and understand the factors driving costs. Sharing information is important, but really understanding the impact each team has on the other is critical.

Easy right? Common sense tells you that up-front project planning is a good idea, but the reality is that it often gets pushed aside when other more pressing tasks arise, and the management of multiple projects grows exponentially more complex as an organization grows. In our experience consulting hundreds of PSO organizations, once an organization grows beyond 60 billable resources, management from disconnected systems is unwieldy, and once an organization reached 80 or more billable resources, project management without connected systems is virtually impossible. For PSOs, where knowledge is the product, maintaining healthy profit margins takes reliable processes and systems to ensure that your service teams are running at maximum efficiency. But without some sort of vision and structure in place, service organizations will always fall back to their old ways of managing a project.

The Power to Excel

Balancing all the elements of a complex project — time, money, scope and resources — is the project manager's responsibility. Making sure they have the right tools in place to succeed is essential to dealing with the unexpected challenges that come with every project.

Organizations that have implemented a professional services automation (PSA) solution to run their business have an early competitive advantage. Streamlined communication from the initial sale through delivery eliminates the time and costs associated with sales to delivery transitions, facilitating quicker payments to you. An integrated solution aligns all business functions — sales, service, project management and accounting/billing — to provide a 360-degree view of how projects move through your entire organization. If you provide easy to follow processes and give your project managers the power to actually manage using the right tools, they will excel, and projects will be run more efficiently with greater profitability. And every project the organization completes will become a baseline for the next project.

PSAs automate vital project management and project accounting processes so you can deliver predictable services and profitable results. These benefits include the ability to:

  • Capture every hour worked and every dollar spent.
  • Track profitability on multiple project types including: fixed, cost plus and time and material.
  • Keep accurate real-time data on every project.
  • Identify when a project might be going off track (before it actually does.)
  • Know when you are behind schedule versus under budget.

With a PSA solution, project managers will have a better picture of the overall project enabling them to address the profitability of each client and ultimately, become more strategic when prioritizing resources. The reliable and real-time data puts the power in your hands to determine qualified resources with bandwidth, and helps organizations prioritize projects based on profit.

Organizations that have adopted a fully automated, integrated solution significantly increase communication across departments and have better real-time visibility into operational performance, driving growth and profitability. Executives at those firms are able to use that visibility to establish a more accurate performance baseline and develop a clearer picture of where they want to be next month or next year, ensuring each project's success translates into organizational growth for years to come.

Now that you have been introduced to the benefits of managing a project utilizing professional services software and how back office automation increases visibility into many aspects of a project lifecycle, our next blog in the series will focus on how you can improve your organization's revenue with better forecasting tools.

Other Resources

Guide - 5 Steps To Improving Disconnected Processes in Professional Services Organizations

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