How Industry Best Practices Will Lead to Profitability

Even before you start your project plan, before you consider teams and resources and timing and budget, consider this: what does your back end infrastructure look like? According to a study by Nucleus Research, Inc.* using tools with strong industry-specific project management functionality helps Professional Services companies accelerate time to value while supporting industry best practices. The same study found that integrating project accounting and costing capabilities with industry-specific functionality will help increase visibility and productivity. 

If you are able follow these best practices you are more than likely to increase profitability, get more efficient operations and, ultimately, position yourself for growth.

Five Steps Toward Improved Profitability

Before you begin planning, make sure you start with the right tools that will provide optimal efficiency and profitability throughout the life of your project. Consider these five steps to help improve profitability on your project:

1. Creating a factual budget baseline – and sticking to it

A step-by-step budget baseline will help you monitor how much the project costs, if it’s on budget and how much has been spent on material resources versus labour resources. As the project evolves, the baseline will help you identify areas where you have overspent, and then help pinpoint where you may recoup money from elsewhere so the end result is as you expected.

2. Planning the right resources at the right time 

Beginning a project using “guesstimated” resources is risky at best, and may at worst be fatal to project success. Make sure you’ve properly researched what is available to you so you can utilise the right talent and tools for the job when it’s needed. A robust resource management tool will prove invaluable to this process.

3. Budgeting for a rainy day 

It’s a fact of life that things will occasionally go off plan. Yet many companies plan for a best-case-scenario and hope nothing goes wrong. Instead, build a buffer into your price structure so that you stand a better chance of always staying in profit, whatever happens.

4. Making employees financially responsible for their projects 

It is rare that a project manager is financially accountable for project success. Instituting financial accountability is a significant step in the right direction toward getting the right return. By setting realistic targets, benchmarking progress and remunerating the managers that yield a healthy profit, you’ll keep motivation—and revenue—as high as possible.

5. Getting automated

Provide your workforce with the automated tools they need to do their jobs at their best ability. The more streamlined and automated your processes are, the more efficient and profitable your business will be.

There are a plethora of factors that will affect the level of profitability for your project. While no single product, strategy, or activity can increase profitability, a combination of pre-project planning and industry best practices will go a long way toward enhancing your project success and, in turn, your bottom line.

Fergus Gilmore is Managing Director of the Deltek UK and Central Europe Professional Services organisation. He has over 20 years’ experience of working in the ERP software industry with extensive experience in both the Private and Public sector.

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