Directors are quite familiar with the difference between what was planned and what actually happens. The gap between theory and reality starts from the day the plan is completed and focus shifts to running the business. Financial disconnects surface monthly as forecast figures are replaced by actual costs and revenues. Last month's status report is out of date the minute it is sent.
The same thing happens with resources. Many firms manage projects while providing consulting services, developing solutions or installing systems. They assign resources and juggle expenditure to keep activities moving. In the real world staff also get sick, supply chain delays occur, delivery dates slip, billings are sometimes delayed. Managers cope through rapid reassignments, shouting at the odd supplier, calling in agency consultants and dropping the FD an email about the extra cost when there is time.
The problem arises when the unbudgeted cost becomes due for payment. Project billing is delayed along with project completion. The wage bill is overforecast owing to extra hands. Expenses claims are late and above the norm. Managers still want more resources. Before companies know it the gap between what was supposed to be and what actually is turns into a yawning chasm.
The picture that companies think they have can be stunningly different
from reality and create both nasty surprises and missed opportunities
Growing companies develop ways to help them manage. It is natural to utilise the tools at hand, so expenses and timesheet systems are built on Microsoft Excel, and spreadsheets or desktop project management applications are used to run projects. However, companies grow, and the solution which helped juggle five people's commitments and costs cannot cope with fifteen, fifty or more. Spreadsheets are designed for numbers, not project data. Desktop project tools aren't designed to handle multiple projects, or projects of different types. The picture that companies think they have can be stunningly different from reality and create both nasty surprises and missed opportunities.
Professional project management and resource management solutions are designed to help organisations, consultants and teams to deliver on their commitments. They deliver a true department- or enterprise-wide view of how resources are used because that is their job. Instead of creating information silos they make data available to all project managers or team leaders who can then balance conflicting demands, avoid duplication and plan ahead to utilise resources smartly. They can manage their workload better with a clearer view, and can generate reports more easily.
These tools enable companies to deploy people with the right skills, not those who are simply available. A consultant may be over-skilled and better deployed elsewhere, or have a great performance record on one type of project. Perhaps what is needed is permanent reassignment and provision of a few role-specific tools.
Timesheet integration eliminates wasted time on manual time tracking. Managers can track billable work to track progress or to generate accurate invoicing and maximise revenues. Such visibility allows them to identify star performers and set appropriate chargeout rates. People are expensive, and even small percentage utilisation gains for an individual can rapidly stack up significant cost savings or potential billings. Timesheets also show non-project time - which can often be put to better use.
Understanding how project costs accrue enables you to plan for material and fixed costs. In turn this allows you to minimise costs and increase profitability. Meaningful information about financial commitments and needs at any one time can help companies manage cash flow.
Choosing project and resource management tools that can cope with your business needs will be a powerful aid to recovery. Such investment can drive direct and rapid return on investment through productivity gains, minimisation of costs and revenue growth. Having the right tools enables strong financial planning and budgeting, making it possible to track, analyse and justify budgetary requirements: a fundamental requirement for those who must satisfy external investors. These tools help to reduce the risks around running a business without a true view of what is going on in reality, rather than simply on the spreadsheet.
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