Project managers in services businesses have a clear goal: deliver projects as efficiently as possible while increasing their company’s profitability. But completing projects on time and staying within all the constraints set by the contract isn’t easy.
Moreover, managers are often forced to rely on manual processes to track these projects, which can become overwhelming. From project setup to budgeting and allocating recourses, this manual work makes it difficult to deliver on-time projects within budget to happy customers.
There are some common problems that interfere with services projects meeting their goals.
Why Project Run Over Budget and Miss Deadlines
- Poor project visibility. One of the primary causes of projects running over budget is that managers don’t have a clear understanding of the status of the project. Oftentimes, different teams are using different tools to update project status, creating incomplete status reports and a fragmented picture of the project. Those different tools, whether spreadsheets or dedicated project management software, can lead to a lack of standardization when monitoring KPIs and updating dashboards. This lack of cohesion creates further uncertainty when you need to align project status and financials.
Services teams need a central repository to access the right data. Otherwise, managers will waste time trying to correct and fill in the missing pieces, leading to wasted resources, unbilled hours and more risk. For example, when a project manager adds a project update to a project management tool but fails to make changes to the separate tool that manages project financials, then that missing financial information can snowball. Finance and operational teams that may be tracking the project budget see unreliable information, leading to an unrealistic view of project health.
- Lack of collaboration. Project managers often have to deal with poor communication between team members. Using email or company chat tools means it’s difficult to track updates. For example, when project statuses and timesheet approvals are given verbally instead of tracked in a system, it can introduce the possibility of mismatched information between reports and impact profits near the end of the project. With inaccurate communication, projects are delayed and go over budget, decreasing profitability.
- Misaligned resources. In services organizations, maximizing the number of billable hours per employee is critical to maintaining cash flow and increasing profits. If a business can’t identify the right employees to work on specific projects, it isn’t properly utilizing its resources. Also, in a fast-paced working environment, manual or administrative work slows and diminishes the work that could be spent on completing the project on time. For example, when an employee has to rely on manually inputting data into the project management system and manually update the project financials, they are spending a significant time on nonbillable hours, which impacts revenue.
- Accounting and billing accuracy. Spreadsheets and disconnected financial management systems can contribute to inaccurate accounting and billing errors that affect revenue recognition and the services team’s performance during a project. For example, a project team may input the wrong cost code for hours worked into a spreadsheet they are operating from, creating data that does not accurately represent the work completed. Similarly, working from separate systems and spreadsheets limits the ability to automate certain areas of a project. If the team can’t implement billing rules during the initial project setup, they can’t auto generate invoices when certain triggers are met.
The Key is a Unified Solution
With a professional services automation (PSA) solution that connects to the customer relationship management (CRM), financial and HR systems, companies can gain better control over the project lifecycle and automate cumbersome tasks. That can deliver:
- More accurate reporting by providing a standard system and process allowing teams to monitor details down to the project level, including project profitability and other KPIs.
- Improved collaboration by eliminating the need to access separate systems to communicate approvals or statuses.
- Optimized resource utilization by integrating PSA and HR systems to ensure the right resources are working on the right task by using skills searching tools to maximize the skill sets and resource allocation. For example, employee PTO and vacation requests can automatically tie into the project to show the impact of project schedules/timelines and the business performance during the project.
- Automated billing and invoicing with billing rules to link projects to financials and manage pending charges and invoices, as well as control when the organization recognizes the revenue from the project being worked for improved performance.
SuiteProjects Unifies Project Management with the Rest of the Business
NetSuite SuiteProjects is designed to help services-based businesses simplify and standardize operations so that team collaboration, resource utilization tracking and reporting as well as project accounting, billing and invoicing are easier to manage. SuiteProjects brings together all these elements in a single solution so that organizations ultimately can operate more efficiently and deliver projects on time and within budget.
To learn more about how SuiteProjects, watch this Suite Fundamentals SuiteProjects product demo webinar(opens in new tab).