Project success isn’t simply defined by outcomes — it’s also critical for Canadian professional service organizations (PSOs) to consider the total costs of project completion.
Here’s why: Even if projects are strategically successful, overspending on staff and resources can reduce the total ROI of professional service initiatives. To ensure project financial management delivers on both practical objectives and profit-driven outcomes, leaders need actionable, applicable and accurate metrics. But how do firms effectively navigate these numbers? Which metrics matter most, and what’s the best way to ensure they’re delivered on-demand?
Parsing Project Problems
The biggest barrier to successful project completion? Managing costs. In fact, almost half of project managers surveyed said costs were their biggest concern, while 45 percent pointed to hitting deadlines and almost the same amount faced challenges in sharing information across teams.
While no two project financials frameworks are identical, many of these issues are tied to common causes, including:
- Lack of defined goals — Preparation is paramount for any project. If organizations don’t take the time to define clear goals and specific metrics it’s easy for projects to get off-track.
- Task tracking — Visibility is key to project success. In addition to assigning staff critical tasks and creating relevant milestones, PSOs need a way to ensure tasks are completed on-time and on-budget.
- Resource distribution — The right resources used the right way at the right time make all the difference in delivering on project outcomes. As a result, enterprises need ways to track and manage resource use at scale and on-demand.
- Siloed data — As noted above, one of the biggest project management challenges for businesses is sharing information. In many cases, this problem starts with siloed data — information that’s easily used by one department but nearly impossible to access for another. Here, companies need software solutions capable of streamlining access across organizational lines to ensure data is effectively used to drive project completion.
- C-suite buy in — No project succeeds in isolation. Without a C-suite champion — a boardroom member willing to take responsibility for project timelines and outcomes — it’s easy for even the best-designed project frameworks to get off-track.
Managing Mission Metrics
As noted by CIO, effective project management depends on establishing key performance indicators (KPIs). But it’s one thing to recognize the need for project financial metrics — it’s another to identify which measurements offer the biggest benefit.
According to a recent Sage Intacct whitepaper, while corporate leaders often want metrics focused on customer satisfaction, revenue per employee and standard vs. effective costs, project managers need fast and useful access to metrics such as:
- Project and task-level profit as they relate to standard and effective costs
- Budget vs actual spend
- Earned value
- Recent transactions over a specific threshold
To provide maximum project financing value, these metrics must be easy to read, drilled down to detail and delivered in real-time. While back office metrics offer value for longer-term initiatives and sustained investment outcomes, up-front and immediate data returns are necessary to ensure professional service projects stay on-time and on-budget.
Integrating Innovative Infrastructure
While improving project financial management starts with a recognition of common challenges and the definition of key management metrics, these steps won’t deliver successful outcomes without effective underlying infrastructure.
This starts with data collection and storage solutions capable of handling increased information volume and velocity across the organization — for professional service organizations, this often includes the ability to capture everything from consumer engagement to corporate expectations and anticipated expense outputs.
It also requires the deployment of project management software specifically designed to deliver:
- Customized project accounting — Every project comes with unique accounting needs — PSOs need centralized accounting and reporting to ensure the numbers add up.
- Improved profit margins — It’s not enough to simply complete projects; companies must also ensure outcomes deliver reliable and robust profit margins. The right project management software can help identify potential areas for profit improvement.
- Lowered costs — Where can projects reduce costs, and where is full-budget spending required? Real-time visibility into current project status and task completion can help identify specific areas for cost reduction.
- Increased client satisfaction — Client satisfaction ultimately makes or breaks PSO projects. The right software tools help define and integrate this metric into existing project processes.
Put simply? Improved professional service project management is all about data — access to better data, on-demand makes it possible to create and manage relevant metrics that provide real-time reporting on project status, in turn allowing project managers to detect and correct emerging issues before they become large-scale concerns.
The result is projects that come closer to delivering key outcomes on-time and on-budget. While professional service firms realize the impossibility of perfect project management given the sheer number of variables and potential pitfalls, customized and cloud-based project management solutions provide critical visibility into current operations backed by accurate and applicable metrics.