Project Going Over Budget? How To Get Back On Track And Achieve Customer Success

Project Going Over Budget? How To Get Back On Track And Achieve Customer Success

Even the most world-class Professional Services Organizations (PSOs) with the best project managers and service team members will encounter problematic projects every once in a while.

When this happens, projects can run over budget and clients can become frustrated if the service team doesn’t turn the project around and get things back on track.

If you find yourself with a project that seems like it’s derailing quickly, here’s some steps you can take to resolve the issues, get the project back on track, and deliver a successful and complete project that will keep your client satisfied with the service you provided:

1. Identify the problem areas

When a project starts to derail, the first step is to identify what the problem is. Maybe your service team has hit a roadblock where they’re waiting on a piece of information from the client. Or perhaps there is a technical difficulty that needs to be resolved by another department within your organization, such as the IT department. Maybe the project was incorrectly scoped during the sales process and your service team is unable to deliver a complete project with the allotted hours dedicated to project implementation.

Whatever the problem may be, identifying it allows you to step back and look for a resolution to the problem. This is where a project manager should take control and resolve the issues at hand in order to get the project back on track.

A Professional Services Automation (PSA) Software can help a project manager identify and resolve project issues, because it helps provide a clear picture of the entire project lifecycle. Part of monitoring a project for success requires tracking a project’s estimate-at-completion against its budget. Doing so, acts like an early warning indicator, alerting project managers when a specific aspect of a project may have taken more effort than intended. For this to be effective, however, project managers need to maintain accurate resource management projections and visibility into the project in real-time. Using a PSA software can easily enable a project manager to do this.

2. Resolve the issues by making necessary adjustments

When you’ve identified that there’s a problem with the project, the worst thing you can do is hope that it will correct itself along the way and everything will work out in the end. If it seems unlikely that a project will be completed on time and on budget, that will most likely be the case unless you step in early and make adjustments in key result areas.

Some project managers will assume that a tiny setback will not have a large impact on the completion of the project. This may be true in some circumstances, however, tiny setbacks can often add up throughout the lifecycle of the project which means it is the responsibility of the project manager to adjust for these discrepancies and keep the project moving along smoothly.

One tactical action that project managers can take is to identify the project’s key result areas, also known as critical success factors in project management. These are the big-bucket items that must be completed on time and to a high degree of quality in order to achieve project success. Much like an intricate game of chess, project managers can shift around priorities to accommodate for discrepancies in the project’s plan.

For example, if you know that a client is more budget-conscious than time-sensitive, you may be able to play around with resource utilization in project management. You might trim the team to stick to the budget but at the expense of time to market. If scope or quality are factors that can be adjusted, you may be able to make small reductions that don’t jeopardize the ultimate goal of the project while still achieving your key result areas.

3. Include the client in the discussion as adjustments are being made

There’s nothing that will frustrate your client more than being told at the last moment that the team has used up all of the allocated hours for the project and the work hasn’t been completed, especially if the client was under the impression that things were running as planned. If your client has a strict budget for the project or a non-negotiable date for project completion, they will not be happy if they find out at the eleventh hour that there are issues with the project plan.

As soon as the problem has been identified by the project team, and suggestions for making adjustments have been decided on by the project manager, the client should be made aware of the adjustments that are proposed and sign-off with their approval of the changes to the project plan.

This transparency provides the client visibility into the project and ensures that they are less likely to feel blindsided later on if there are unexpected costs associated with their project, or timelines have shifted.

4. Use data and insights from problematic projects to ensure future projects run more smoothly

Sooner or later every project team will face a problematic project. Hopefully by taking the steps above you can turn a project around and successfully deliver a project that meets your client’s satisfaction, however, the best PSOs will learn from their mistakes and use the lessons they learn from problematic projects to make future projects run smoother.

A PSA software with functionality for creating detailed reports of projects, can help PSOs plan for better success in the future by using project data to understand where improvements can be made. In addition, a PSA software with the ability to send surveys for client feedback and create communities for clients to have visibility into a project can help you get a better understanding of what your clients are looking for and how to do better in the future. Project Health Check Statuses will allow you to quickly see your most successful and least successful projects and empower you to make changes where needed.

Gantt Charts: How They Improve Project Planning and Drive Success For Services Teams

Gantt Charts: How They Improve Project Planning and Drive Success For Services Teams

Gantt Charts are a tool that many professional services organizations (PSOs) have found useful for project planning, and for driving the overall success of their services team.

What is a Gantt Chart?

For those who don’t know, a Gantt Chart is a visual method for project planning that helps a services team accomplish their tasks, and work together as a team fluidly. Put simply, a Gantt chart puts all those pieces of a project (tasks) together for better insights into the overall project. Ultimately this improves team communication, project efficiency and potentially even helps grow revenue

Gantt Charts and Project Planning:

Gantt charts are just one tool for project planning, but one that many services teams find incredibly useful. Differing from other project management tools, a Gantt Chart allows a services team to quickly see a visual of the entire project including the route to its completion, rather than just the next task at hand.

Laid out in timeline order, different bars represent the tasks needing completion, and align to show what tasks are dependent on the completion of another, thereby forming the team’s “critical path”. The critical path is what helps a services team visualize the route they must take to complete the project, and the estimated timeline for project completion.

If a project’s tasks are largely dependent on each other, then it’s hard to visualize how all those blocks need to stack up for a project to be successful. A Gantt chart helps the whole team visualize “the build”, and then divide and conquer to meet project deadlines.

Driving Team Success:

Gantt Charts can improve visibility across a services team and improve collaboration. They do so by highlighting how a team needs to come together to make a project successful. When you can easily visualize task dependencies it’s easier to prevent steps from being bottlenecked and open the doors for clear communication.

They also allow the team to focus on the success of the project. The defined critical path keeps the project moving forward towards success. Rather than crossing items off a list, a services team can use a Gantt Chart to visualize how each step brings them closer to successful project completion. If roadblocks do occur, the team can also easily map out where the necessary changes in the project need to be made in order to accommodate the roadblock and clearly identify what the risk or setback will look like so they can then keep the client informed.

Although Gantt charts are known as a “big picture” planning tool, they are also very useful in understanding where the team members stand on the day-to-day. Milestones help divide up the critical path into focus areas or phases of the project.

Features of a great Gantt Chart:

While many PSA and Project Management tools will have Gantt Chart capabilities, some have greater functionality than others.

Klient PSA, for example, has made significant improvements to their Gantt Chart experience in recent releases, working off feedback from real services teams who use the Gantt Chart for their project planning.

Klient’s updated Gantt Chart features include: full inline editing, rapid task creation, drag-drop of task sequence, quick predecessor creation by wbs or task name, task scheduling directly from the Gantt, configurable columns display, split-pane, and much more deliver an exceptional experience for managing projects. The new Gantt experience is available as a standard page as well as a new Lightning Component.

How To Reduce Revenue Leakage for Professional Services Invoicing

How To Reduce Revenue Leakage for Professional Services Invoicing

On the surface, invoicing for professional services organizations seems like a simple concept.

For services organizations just starting out, oftentimes it’s as easy as downloading an Excel invoicing template for consulting services, punching in your hours and rate, rendering a services invoice, and sending it to the client.

However, as services teams grow past 25 consultants, firms begin to focus their attention on streamlining the invoicing process. But quite often, even some of the largest professional services organizations are still approaching the vital task of invoicing incorrectly. Given that invoicing directly affects cash flow for a business, it seems like something that organizations should dedicate time to getting right, yet to this day perfecting the invoicing process continues to be put on the back-burner by many services teams.

Excel Invoicing Templates Are Not Enough

There’s a time and a place for Excel – but invoicing is not it. A key trait of any growing services business is the ability for top management to solve problems quickly and efficiently. Talk to anyone who has spent time managing a professional services organization and they will tell you that they spend most of their time “putting out fires.” As a result, Excel becomes a manager’s go-to fire extinguisher–it’s easy to understand, it can get the job done quickly, and it’s flexibility allows you to make things look the way you want. When it comes to invoicing for services work, however, that is where the benefits of using Excel end.

The invoicing process can be a tedious one. Even one small mistake could cost a business tens of thousands of dollars, often without anyone even noticing. And, the process can occupy a lot of time and resources if not done efficiently. With Excel, every step of the process – creating, proofing, approving, adjusting, and sending invoices – introduces inefficiency.

Not only is using Excel for invoicing labor intensive and error prone, but the manual processes can also reduce visibility and transparency for senior management who need insight into the performance of the business.

If Not Excel, Then What? 

When it comes to replacing Excel templates, invoicing software seems like the obvious answer. But for professional services businesses, invoicing software isn’t usually offered as a standalone solution. Most commonly, it is part of a financial management solution, a time and expense tracking tool, or a professional services automation (PSA) suite. A typical and costly mistake that many services teams make, is selecting a type of invoicing solution that is unable to accurately support the needs of their business.

Financial Accounting Software

When thinking about generating invoices, financial accounting solutions seem like a natural starting place. That said, for professional services organizations invoices are more about people and projects than they are about simple debit and credit transactions.

If a services team plans to grow past just a few consultants, or is already well past that size, it’s probable that the organization will outgrow their accounting system quickly and won’t be able to rely on it for generating invoices and tracking project progress.

This doesn’t mean, however, that invoices for professional services work will not need to find their way into an accounting application to track receivables, cash flow, and outstanding balances. To accomplish this, it’s best practice to leverage a solution outside of an accounting application to generate invoices that can be integrated back to a business’s financial accounting solution. Robust solutions will have pre-built integrations to some of the most popular accounting packages, allowing data to flow seamlessly from one application to the other.

Time And Expense Software

Software designed for time and expense tracking is a much more natural fit when it comes to the invoicing process for services teams. These tools are better developed to manage people and projects and make it easier to translate activities into the financial components of an invoice.

However, time and expense software is not without its limitations. Missed or forgotten transactions, for example, can be problematic with a time and expense tracking tool. If the software a business is using is not able to recognize when a billing milestone has been achieved, it can go un-invoiced for quite some time, creating revenue leakage and reducing cash flow as a result.

Professional Services Automation (PSA)

For services organizations achieving growth, the only real answer when it comes to the right tool for invoicing is a professional services automation software.

A PSA software is a project management and resource management software rolled into one easy-to-use platform. The value that PSA software brings to the invoicing process can be seen in both reduced revenue leakage, and increased efficiency.

Reducing Revenue Leakage:

Consolidating invoicing and time tracking into the same system helps to eliminate revenue leakage. PSA software takes the process a step further by focusing on collecting all of the time that can be billed, and ensuring it reaches the invoicing process. Robust PSA solutions will have a detailed understanding of how much time is anticipated in a given period. Based on project schedules, a PSA solution will alert project leaders when things aren’t going according to plan. More importantly, a PSA solution will understand the difference between earning revenue and sending an invoice. This helps to recognize revenue properly on fixed price work.

Driving Efficiency:

A PSA solution will also allow project managers and finance teams to model exactly how they would like to bill their clients up front. With so many different contract terms available, this allows the organization to seamlessly complete the invoicing process in whatever manner suits them. Finance teams can complete the invoicing workflow quickly without the headache of manual processes. More importantly, this structure drives accountability throughout the entire invoicing process. Finance Managers and CFOs are provided a detailed view of exactly what has been billed, how it has been adjusted, and what is still being waited on. This helps streamline the business’s month-end processes and frees up valuable time and resources to focus on other important projects.

Perfecting the Invoicing Process With PSA

Through leveraging a PSA solution, organizations can reduce errors and increase efficiency, while also ensuring that cash flow follows closely behind work being performed. And, as the business grows, they offer a scalable invoicing process which means fewer fires to put out.

5 Strategies for Introducing Your Services Team to New Project Management Software

5 Strategies for Introducing Your Services Team to New Project Management Software

As your Professional Services Organization grows and evolves, the software and tools you use to be successful will inevitably change over time as well.

Eventually the time will come when your simple time and expense or basic project management software will no longer be sufficient for running your business effectively, and you will need to consider implementing a more robust and comprehensive project management tool such as a Professional Services Automation (PSA) solution.

However, changing the tools your employees have come to know and be comfortable with can often be challenging. It usually helps if you can encourage your team to be excited about the new software by showing them how valuable it will be in helping them do their job more efficiently.

Here are 6 strategies to consider when introducing new project management software to your team in order to gain their support and make the transition as frictionless as possible:

#1. Talk about it early and get your team’s buy-in

It’s important to remember that you never want to blindside your team with new project management software. Make sure they know new software will be coming as early as possible (even before you determine which software to purchase). It can also help to get team members’ feedback on features they’d like to see in the software. These conversations can help warm them up to the idea of a new software solution while getting them excited about the new functionality they’ll be able to take advantage of.

Be wary, however, about asking your team which software they’d like you to implement. By doing so, you’re likely to receive a wide range of responses making it nearly impossible in the end for you to select one that will please everyone. Instead, ask your team members ahead of time which features they’d most like to see. You can also offer them a list of potential features to rank in order of importance. Let them know you’ll use that feedback to find the right project management software for the team as a whole.

#2. Make sure the software you select is a true replacement for existing tools that are important to your team

Make sure your new software is an ample replacement for whatever tools your team currently uses to manage similar tasks. If a team member doesn’t feel that the software fulfills his or her needs, they’re more likely to continue relying on their old project management methods instead of making the switch.

You may be trying to replace 2 or more tools with 1 new and more comprehensive tool, but be sure to double check that the new tool will have all of the functionality that is crucial to your team’s success and that you aren’t taking away any important capabilities from them. Adding new functionality and creating easier ways of doing things is a plus, but be careful that you’re not eliminating capabilities by sunsetting software that is imperative to the team’s performance while offering no suitable replacement.

#3. Have the basics set up before you introduce the software to your team

The setup process for a new project management tool can be time consuming. Having basics in place, such as team member logins, project information, client information, etc., before introducing the software to the team can help things go more smoothly. It will make the migration process to the new software seem less daunting and will also provide real-world examples for your demo/training instead of hypothetical ones.

Remember that the less tedious setup your team has to do before they dive in and start using the software, the more likely they are to quickly adopt it and begin using it to its full potential.

#4. Make sure everyone receives appropriate training in advance of migrating completely to the new software

Each member of your team likely has different levels of comfort with technology and differing abilities for learning new software. Tailor training experiences based on the comfort level of your employees. Some may prefer to attend a web-based training with a support rep or a detailed in-house training session. Others may prefer to watch a couple of online tutorials then explore the software themselves. Whatever the method, what’s most important is ensuring each employee gets some form of real training. This helps to create positive first interactions, enables them to more effectively use the tools, and helps them to hit the ground running when it’s time to migrate to the new software.

It may also be beneficial to select 2 or 3 people from your team who are eager to learn new software, and generally adopt to new technology easily, to become in-house experts on your new project management software. These individuals can help the implementation process by answering questions that your other team members may not otherwise have reached out to support to ask, and can assist you in training the rest of the team.

#5. Allow a sunset period with the existing tool and give enough time for your team to switch over to the new software comfortably

It’s important to fully detach from the previous tool(s), but not immediately and not without warning. It can take time to fully move all of the information over and to migrate to the new system. It can also take time for your team to adjust.

However, as much as it’s important to allow time for adjustment, it’s equally important to have a hard stop date. With advanced warning, your employees can adjust and transfer information without feeling rushed. They are also less likely to hang around in the old system for their own convenience.

Set this stop date while in advance and make sure everyone on the team knows that they should ask the necessary questions and request additional training if they need to, in order to ensure they are comfortable with the new software by this deadline.

Is your team considering a more comprehensive project management tool?

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The Top 5 Professional Services Metrics You Need To Be Tracking For Customer Success

The Top 5 Professional Services Metrics You Need To Be Tracking For Customer Success

The most mature professional services organizations and the ones who consistently deliver successful projects and foster long-term customer relationships, are those that offer high levels of organizational visibility across departments, have optimized business processes and integrated systems, focus on profit improvements, and have moved away from a one-time project focus to an increased emphasis on delivering great customer experiences for life.

These organizations have largely accomplished this by tracking 5 important and influential metrics for the professional services market. These metrics are not only imperative to a profitable business, but also critical in keeping customers happy through improved service delivery experiences. We recommend that all organizations who deliver projects to clients, start tracking these 5 key metrics immediately if you aren’t already:

1. Annual Revenue per Billable Consultant

Annual Revenue per Billable Consultant is a measure of a business’s total revenue divided by the number of billable consultants they employ. Understanding how much revenue each consultant is producing is a key indicator of financial success as well as consultant productivity, but it must be assessed in relation to labor costs. Revenue per billable consultant should ideally equal one- to two-times the labor costs of employing each consultant. Organizations with high annual revenue per billable consultant tend to do well because higher rates indicate better consultant productivity with respect to larger projects, more revenue in backlog, as well as more on-time and on-budget completions.

Tracking consultant productivity is key to improving customer success because you will have greater insight into when and how you should better utilize your consultants in order to improve their productivity and speed up project timelines and delivery.

2. Annual Revenue per Employee

Another core metric, Annual Revenue per Employee, is measured by dividing total revenue by the total number of both billable and non-billable employees. Similar to annual revenue per billable consultant, high annual revenue per employee is strongly correlated with profitability and efficiency. By measuring how much revenue each employee brings in relative to how much they cost, you can accurately determine the financial health of an organization. While not everyone on staff can provide billable services, it is important to be aware of the risks of too many overhead costs in relation to revenue per employee.

This metric can also be important for professional services organizations hoping to optimize business processes because business leaders can see departments where they may be spending too much money on employees, and can better re-allocate budgets to hire employees in areas that will make the business more successful. A successful business is one that has the right number of employees in each department in order to successfully manage client expectations and provide the support necessary to maintain loyal customers for life.

3. Billable Utilization

Employee utilization is defined by SPI Research on a 2,000 hour per year basis, and is calculated by dividing the total billable hours by 2,000. Utilization is central to accurately determining organizational profitability, as well as a key signal to expand or contract the workforce. By tracking work hours for billable employees, an organization can get a better picture of workforce productivity.

Your utilization rate tells you how much of your employees’ available time is spent on billable work. If this rate is too high, you likely need to add more resources. Too low and it means that you’re not bringing in enough work.

Tracking this metric can help you improve customer success because overworked employees are often tired, unhappy employees, and may even become so rundown that they are unable to perform to the best of their ability. On the other hand, underworked employees may become bored or uninterested in their work which can also affect the quality of the work they deliver. Both of these circumstances can be damaging to your organization’s reputation if the work your employees are performing does not measure up to customer expectations.

4. Project Overrun

Project overrun is the percentage above budgeted cost versus the actual cost of a project. This KPI is important because anytime a project goes over budget in either time or cost; it cuts directly into profitability. Whether a project goes over in either budget or allotted person-hours, it can limit future work and in many cases reveal internal efficiency or management issues, which also negatively impact bottom-line results. Project overruns are also detrimental to client satisfaction and even incoming sales opportunities.

By tracking project overrun, you can identify which projects are consistently going over budget, and identify ways to improve internal efficiency in order to manage projects better and stay on schedule. This will greatly improve your number of projects delivered on time, on budget, and to your customers satisfaction.

5. Profit Margin

Profit margin is the percentage of revenue which remains after paying for the direct costs of completing a project. Keeping profit margins high is essential as it ultimately drives overall revenue. Poor financial performance can often be directly correlated to low profit margins, as organizations are no longer able to invest in future growth activities.

An organization that has revenue to invest in the future growth of the company is one that can remain innovative, continuously enhance and improve their product or service, and foster long-term relationships with their customers. Tracking profit margin is therefore crucial to the ongoing success of a professional services organization.

5 Reasons the Best Resource Management Software Lives Within Professional Services Automation (PSA)

5 Reasons the Best Resource Management Software Lives Within Professional Services Automation (PSA)

In the service-based business world, there are countless software solutions that can greatly improve your organization’s ability to get work done for clients.

Many options seem all-encompassing. Others appear to be so niche that they only manage one specific area of your business. It can be hard to focus on what your organization needs and even harder to make a decision.

In an earlier article about the differences between professional services automation (PSA) and project management (PM) software, we explained that a PSA system encompasses PM software and changes the focus from the project to the customer.

Here, we’ll explain the differences between PSA and resource management software — and why the best resource management software lives inside larger PSA systems.

1. Resource Management Software Is Just About Resources

Resource management software — or resource planning software — helps managers schedule their people for optimal utilization and workload distribution. This includes both at-a-glance scheduling and the ability to make changes to schedules on the fly.

However, that’s all resource management software does. Standalone systems aren’t tied into the larger strategy of your services business.

2. Professional Services Automation Includes Many Functions Across Your Business

While resource management software focuses specifically on resources, PSA systems include resource management as one of their many functions. This allows leaders to have greater visibility across the customer journey. It also gives employees easier access to the info they need to produce projects or work your clients will love.

Besides resource management, PSA should also include:

  • Accounting
  • Calendar management
  • Collaboration
  • Document management
  • Expense tracking
  • Invoicing
  • Project management
  • Proposals.

And that’s not all. Your PSA solution can also come with the familiarity and mobile-readiness of Salesforce.

3. A PSA System Within Salesforce Delivers Even Greater Service

A particularly strong PSA system will be built right within Salesforce, allowing your organization to easily access information across the entire customer journey, from the prospect stage all the way to billing and accounting. That includes seeing how resources fit into that mix, both for planning and for analytics after a project. Any employees already familiar with Salesforce will have an easier time picking up use of a PSA system built within a software solution they already know how to use. And that includes resource management software. Additionally, mobile access is also included with Salesforce for ease of use and accessibility.

4. Give More Visibility to More Employees (or Restrict It)

Having PSA set up within Salesforce gives leadership and employees the ability to see more customer information across the customer lifecycle. Sales teams, implementation specialists, project delivery teams, and even the back office can access more customer information right when they need it, reducing the slow-downs that come from interdepartmental inquiries via messenger, email, or intranet. However, for greater data security, customer information can also be restricted to only those employees who need to see it by using access restrictions. If sensitive customer information needs to stay hidden from certain departments or certain employees, it can.

5. Resource Management Within PSA Moves the Focus From Resources to Customers

In the same way that selecting project management software within a PSA system shifts the focus from projects to customers, choosing resource management software that lives inside PSA will do the same. Instead of only focusing on resources, a PSA system will incorporate your planning work into a central system — one where customers are the center of everything.

Conclusion

Selecting the right resource management solution for your business can seem complicated at first. But if you make that decision as part of your PSA selection process, you can quickly narrow down your choices.

You can have better internal visibility, stronger planning capabilities, more data security options, and a customer-centric focus by choosing a resource management tool within the right PSA system.