Services-based businesses succeed when they can standardize operations. Standardizing operations often involves simplifying team collaboration, project accounting, billing and invoicing as well as resource utilization tracking and reporting. Many business management solutions aim to bring these elements into a unified solution to work more efficiently and complete projects on time and within budget.
But that’s not as easy as it sounds. Projects are supposed to be defined by their nature – they have defined beginning and end dates, a defined scope, and defined resources. They are not routine operations and have very specific and unique goals for the stakeholders. Project teams often include people who do not typically work together, spanning multiple departments and geographic areas, who aim to operate effectively within the project’s parameters to achieve the goal on time. Project managers, then, are the individuals who work to ensure that a team meets these requirements by applying specific knowledge, tools, and skills.
For project managers, meeting deadlines and remaining within the project’s defined scope parameters are the top priorities. From initiating, planning, executing, monitoring/controlling, and closing, these individuals are focused on delivering projects efficiently while increasing company profitability.
As with many business processes, things don’t always go as planned, and projects can fail to meet outlined goals. The reasons for this can vary greatly, but below we’ll take a brief look at some of the most common issues with project management that could be causing your projects to lose profitability.
Issue #1: Over Budget
Obvious, right? Projects can run over budget for many reasons, from inadequate planning and resource allocation to poor productivity. The most effective project managers can account for these issues with methodical project observation and a comprehensive understanding of the project status.
The key to this task is data accrual and analysis. Project managers need to ensure complete and accurate records tracking progress and cost at all times so that issues arising which might cause a project to miss the budget requirements can be intercepted before they become insurmountable.
The most effective way for a project manager to solve a budget problem is to anticipate it before it occurs. That just can’t happen if a project manager is unaware of the project status. Specialized tools like project management software can help managers stay on top of problems as they manifest while integrating critical data into a central database that makes advanced project observation more accessible and practical.
Issue #2: Poor Productivity
Collaboration is critical for the success of a project – so if productivity is low, there are a few things a project manager can consider. For one, a re-examination of communication processes and methods should be done, particularly if the team is relying on outdated email correspondence to send time-sensitive information.
Software solutions that offer embedded communication capabilities in their systems help keep project execution and collaboration in one place. This also makes it easier for the project manager to manage the project, by allowing them increased observation over team progress and project status. With many project meetings now entirely virtual, utilizing conferencing tools effectively has become incredibly important. Project managers need to ensure that a team communicates accurately and collaborates effectively to meet the project requirements and deliver profitability for their clients.
Issue #3: Resource Mismanagement
Allocating resources is a crucial job for a project manager, with mismanaged resources often resulting in a loss of profitability for a project. Comprehensive ERP solutions are a valuable tool for allowing project managers to minimize the amount of manual labor spent on routine administrative tasks. Now valuable team member time can be freed while reducing costs by automating accounting and reporting processes that would otherwise need to be done manually. Project management solutions allow for high customization capabilities and powerful integration applications to make project transitions more seamless and efficient.
Optimize Project Profitability with Sage
Sage project management software significantly enhances the project manager’s toolkit. The bottom line for increasing project profitability is to optimize your project management efforts. Know the project thoroughly, communicate effectively, and have the necessary information and tools at all times.
Focusing on these critical management tasks allows project managers to anticipate project issues before they can cause profitability problems.
To learn more about how Sage helps keep projects more profitable, on time, and on budget, contact one of our project management experts.