For professional service companies, the success (or otherwise) of a project relies upon two things: optimising the revenue and cost recovery. As a result, project administration is a key business process for professional service companies. It delivers on the company objectives, delivers value to the customer, and produces revenue. The data that results from good administration process provides a foundation for on-going project analysis.
Many organisations have an objective to optimise revenue and cost recovery so it is clearly still a challenge for project based companies. If we don’t invoice all the revenue, and recover the costs, it’s absorbed by the P&L of the company.
So it’s not rocket science, however it’s still a challenge. What are the common causes of this challenge?
- Key elements of the process are manual – typical offenders are manual timesheets and expense claims
- The process isn’t clear across the company, ie all parties who influence the process don’t know it
- The processes are too hard or complex for people to do their part
- Systems don’t support how people want to work
- Finance teams or the project manager become bottlenecks as they are relied upon to get the data right, ie re-coding of projects, expenses, timesheets, and mostly manual tasks.
Given this is critical to the bottom line of these companies, two important steps can be taken.
First, is to get the core process right and well communicated, that is, all stakeholders need to understand and respect the process (this is a change management objective).
The second step is to have the right business systems in place to support or enable the process.
The ultimate way to ensure project administration has the best framework to reduce leakage, to maximise revenue and recover costs is to have both of these elements in place.
These steps complement one another and deliver the balance of being efficient (is it timely) and effective (is it right). Again, both are important for project administration. The best pieces of technology can be in place, however if they support ineffective processes that have no buy in, then they won’t deliver the best outcome.
On the flip side, the business process can be sound, well supported, effective, however critical steps may be manual. This usually means that to deliver the outcome involves a lot of hands-on manual work, and re-work, by individuals to ensure the right outcome. This introduces potential for leakage in recovering expenses and maximising revenue.
When considering a system to support project administration processes, ensure they have capability to deliver outcomes for the project, the customer and your organisation. Elements to consider could include business rules, the participants, approval needs, the budget, the assets, service level agreements, the billing process and stakeholder reporting. Other important considerations:
- how will users interact with the system – where are they, what device do they use
- how to keep the interaction simple (remove complexity)
- how to ensure the output of their tasks accurate and automated. Accurate data input reduces the need for re-work.
The types of systems you might consider depend on the current strategy. If you are in the market for a new ERP (all in one), then this should integrate seamlessly to your customer service processes, back office processes and reporting. Whilst it’s still just as important to have good processes in place and the right functionality, it does take away the need for integration, data flows, etc. If you’ve taken a best of breed approach, and are in the market for specific professional services application (referred to as professional services automation or PSA), then much of that functionality is already covered. With this though comes consideration of how the end-to-end process will integrate with financials and reporting.
Try not to fall into the trap of having parts of processes work very well in your different systems, which then need to be supported by manual steps and data manipulation when they communicate with each other. Both scenarios are valid and can work very well with the right evaluation, planning and design.