Technology Improves Project Profitability

By: Marco
February 14, 2013

Like many organizations, Marco long struggled with project management. We could keep the tasks on track, but we never knew if we made money or not at the end of the project. As we began to take on more projects for voice, video and other products we sell, it was evident that we needed to find a way to track the profitability of our projects.

We recently leveraged some simple technology and rolled out a new project management system that allows us to do just that. We’ve seen a significant increase in our bottom line because of it and now have 10 project managers leading the effort. Here’s a look at some keys to our success:

Identify and automate workflow.
We started by formalizing the workflow for each project. We identified what steps had to be taken, at what time and by what team member. Then we used SharePoint to automate the workflow. From the sales order process to the follow up meeting with the client, every task is accounted for.

Track metrics.
From hardware to services, we track the hours it takes each member of the project team to complete their respective duties. We compare that to what we budgeted and our benchmarks. By the end of the project, we can clearly see where we exceeded budget and where we fell below. Whenever we exceed or fall below the budgeted amount for a project by 20 percent, we initiate a deep dive to determine the cause and how we can prevent it in the future.

Pay on profitability.

We have given our project managers incentives to create accurate proposals and keep the projects on track. We pay them on each project’s profitability. We also reward our technicians, and other members of our team, for being smart with their time and the company’s resources by paying them on profitability.

Set thresholds.
We have set thresholds for what projects need to reach to go through this process. We know that it is not a good use of time for small projects. We initially decided we could initiate this process for projects totaling $2,500 in labor or more.  For smaller projects, typically the lead engineer can manage them adequately.

Repeating results.
After we started tracking our projects, we found that we often underestimated or overestimated the hours needed to perform the work. Neither is good for business. This project management system has allowed us to refine our scoping techniques and develop proposals that are much more competitive. That’s a win for the company, our customers and our employees.

Our new system is so efficient that when our company needs a project completed, we contract with our own project management team to accomplish it. Our project management team recently coordinated moving all of our technology when we moved to our new corporate headquarters. They took this complex problem and made it an efficient process and seamless transition for our all employees. Without them, I’m certain our results would not have been as good as they were.

Topics: Business IT Services