4 Ways Poor Resource Management Costs Services Companies Profits, and How to Fix It

Joseph Clancey, Product Marketing Specialist

February 24, 2022

For a services-based organization, staffing projects is a complex practice that can challenge even the most prepared project and resource managers. Picking the right resource to assign to a project involves a complex set of variables, and circumstances can change in an instant.

For example, project managers need to consider resource skill sets, where resources are located, their interests and experience, hourly rates and availability. Further, not assigning the proper resource can lead to over- or underutilizing employee time, which can burn out a workforce and reduce profits.

Professional services automation (PSA) solutions make resource management easier and higher profitability more achievable. Organizations with a PSA solution see 86% billable utilization and 94% on-time project delivery, according to SPI Research. Organizations without a PSA solution see just a 54% billable utilization rate and 48% on-time project delivery.

 

4 Project Staffing Challenges PSA Can Solve

Despite the impact a PSA solution can have on the bottom line, many businesses are still staffing projects using spreadsheets or disconnected systems. That can create the following issues.

  1. Reactive Resourcing. Assigning the right resource to the right job is essential to successfully staffing a project. If project managers can’t easily determine which resources are available in order to best match skill sets to the task, they risk misaligning bookings and running inefficient projects. For example, if you can’t see that the resource assigned to an implementation project has scheduled time off during a time-sensitive phase of the project, you’ll be forced to rebook resources at the last minute or after the fact. That can lead to delays in project work, potential hourly rate changes and unhappy customers.   
     
  2. Poor Collaboration. Maintaining accurate, widely available, up-to-date status information is vital to optimizing resource management. For example, if project statuses are given verbally instead of being tracked in the system, that can skew the project scope or lead to a resource working extra hours and needless administrative work for a project manager. For instance, if one phase of the project finishes ahead of schedule and there is a resource handoff without the proper updates, that can impact the transition of resources. With spreadsheets and disconnected systems, tracking down accurate status figures becomes time consuming. Disjointed collaboration can be easily overlooked, but if it’s not properly handled through systematic processes and a centralized data source where all stakeholders can view status updates and resources can receive automated alerts, then businesses will see delayed projects and go over budget.
     
  3. Poor Utilization. Not all resources are created equal. When project and staffing decisions are manual, you run the risk of overusing or underusing a resource. These imbalances, in some cases, can be disastrous. If project managers are not monitoring the load the resources are taking on in real time, it threatens the success of the project. For example, if a resource must work beyond the hours agreed upon in the contract because the project has been poorly planned, that work becomes nonbillable hours that eat into profits.  

Bench management is also a constant struggle. Resources are often the most expensive part of the project. If a resource is spending most of their time on non-revenue generating activities such as calls and other administrative tasks, that eats into the number of billable hours the organization can charge. With the right automation and monitoring tools, businesses can keep resources working billable hours.

  1. Limited Reporting Visibility. The primary reason service-centric companies overutilize resources is that project and resource managers lack a clear understanding of how their project is performing. This begins with the initiation of the project, when managers need to see resource skill profiles and bookings, and continues throughout the project as they calculate profit margins and utilization rates. If you’re running staffing and utilization reports, and forecasts are divorced from the data being tracked in your main project solution, you could be missing the key attributes you need.

 

NetSuite OpenAir Tackles Resource Management

When project managers track resource management(opens in new tab) in a PSA solution, they can more easily and proactively assign the right people to the right project based on requirements like skill set, experience and availability. Businesses can also proactively forecast bookings to ensure projects are properly staffed. With PSA solutions, automated workflows track resources, time and expenses, and collaboration, safeguarding customer satisfaction and ensuring projects are delivered on time and profitably.

NetSuite OpenAir’s PSA solution helps to optimize your staffing and utilization by fine-tuning your resource pool and ensuring that qualified resources are working on the right project. NetSuite OpenAir resource management gives you visibility into all aspects of your project resourcing needs, helping you increase overall utilization and manage and deploy bookings based on employee skills, experience and availability.

To learn more about staffing projects with NetSuite OpenAir, register(opens in new tab) for the Suite Fundamentals product demo webinar.

NetSuite has packaged the experience gained from tens of thousands of worldwide deployments over two decades into a set of leading practices that pave a clear path to success and are proven to deliver rapid business value. With NetSuite, you go live in a predictable timeframe — smart, stepped implementations begin with sales and span the entire customer lifecycle, so there's continuity from sales to services to support.