Project profitability isn’t the job of just one individual or department.
When you’re seeking to raise your game with project profitability, you need teams that can collaborate throughout project lifecycles and across functional disciplines. Sales must bid on the right projects at the right fees. Project managers need to assign the right resources to that project. And your talented professionals have to deliver their work on-time and on-budget. While all of that happens, you’re charged with monitoring budgets vs. actuals to avoid overruns, ensure profitability—and analyze the data to make even better bids in the future.
What to do?
Here are four savvy steps your firm can take to enhance project profitability.
Track the Right Metrics: With so much data (in so many formats across extensive timeframes), it’s tempting to generate screen after screen of reports, analyses, and statistics. But amid all of the information you can access, you don’t want to lose sight of what matters most. One crucial step toward improving project profitability is to determine which metrics are important to your firm’s success. These five top KPIs for services organizations from Services Performance Insight can be a great starting point: billable utilization, project overruns, project margins, annual revenue per billable consultant and annual revenue per employee.
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Create Dashboards for Project Managers: Ernst & Young found that 67 percent of 769 CFOs surveyed believe improving cross-functional collaboration is a high priority for finance.2
This is especially true for project-based companies where project managers and client services drive project execution and profitability. Finance can improve collaboration with project managers by providing information they need to be more efficient and make better decisions.
Analysis Time: Having the right data is one key to profitability. But, to make the right decisions, you also need time to analyze the data and make recommendations. Modern, cloud-based
accounting software automates your finance and accounting processes and eliminates duplicate data entry by easily integrating with third-party tools.
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Data Intelligence. Data Decisions: According to Forrester Research, 74 percent of firms say they want to be data-driven, but only 29 percent say they are good at connecting analytics to action. CFOs can play a critical role in fostering data-driven decision processes throughout the firm. That culture starts by providing the same reliable, trusted data in both financial and operational reporting. They want the same data that’s used create P&L reports for executives and project-margin analyses for project managers – timely data, in context, in real time.