Time Is Money: How Project Management Can Make Or Break Your IT Business

By Geoff McQueen, CEO, AffinityLive

Professional services firms are rapidly growing and show no sign of slowing down. According to data from the Bureau of Labor Statistics, professional services firms accounted for 29 percent  of all new jobs in April in the U.S.

Growth for these firms means more clients, increased revenue and greater competition to attract quality talent to their teams. While these are welcome consequences of growth, it can also be dangerous for professional services firms unless it is carefully managed. It’s easy to get caught up in the thrill of landing that big new account or moving into a nicer and bigger office, but pressure on systems (you’re too big to manage with a spreadsheet and whiteboard) and finances (bigger projects cost more when they go over budget, and you're already spending a lot on new people) can cause a company to break — permanently.

Here are some tips for professional services businesses to help manage workflow in times of growth and to ensure happy clients.

Keep Clients Up-to-Date

According to a recent study by AffinityLive, client communication was nominated as the most important factor influencing the success of a project (more than 80 percent of project managers nominated it as critical). Just like a member of your own team, clients want to be kept in the loop as to the status of your work. This can be difficult, however, if it takes you hours to pull information from project collaboration software, compare it to timesheet software and then bring it back to the original project plan, which may not be much more than a quote. If you don't know what's going on, how can you intelligently keep your clients up-to-date?

Since project plans and scope often change throughout the duration of the engagement, clients should be reminded of the updates to avoid miscommunication about resources and budget. While there's a lot of buzz around messaging and collaboration tools as a way to centralize communication, the same study by AffinityLive found that project professionals still nominated email (90 percent), informal meetings (55 percent) and calls (49 percent) when asked to name their top three communications tools — with project collaboration software coming in last with 27 percent. Ideally, teams should use a system that synchronizes with email inboxes and calendars to keep both clients and team members in the loop.

Track Your Budget

According to the survey, two-thirds of project managers are running blind when tracking budgets. Not only is it impossible for project managers to make informed decisions, but this explains why 27 percent of service-based projects go over budget.

Since time is the major cost in a professional service business, budgets are usually tracked against data entered into employee timesheets. The trouble with timesheets is that they have to be filled in by employees with imperfect memories, not to mention a million things they'd rather do.

Further, the activities professionals spend the most time on are difficult to track. For example, employees spend an average of 1.5 days on email every week, but because of the amount of short time bursts spent on email, it’s not surprising that roughly 36 percent of employees never track time they spend on email. Unfortunately, this means a lot of time working on projects is going to waste and not being considered in project budget usage.

To avoid not being paid for work that’s critical to your project’s success, project managers should use a timesheet entry application that integrates with their project management platform — separate tools for planning a project, collaborating on a project and then entering time is a recipe for confusion, error and a lot of extra work.

Use Software To Manage And Track Projects

The simplest thing project managers can do to make their job more efficient is to track projects as they are underway. Our survey found that 40 percent of project managers do not use any project tracking software — they're much more likely to use technology to plan or collaborate on a project than they are to track it when they can have some insight and influence on its success. Without a tool to track project progress, managers are either manually tracking progress in a spreadsheet or they simply aren’t tracking them at all.

All managers can benefit from a tool that plans, tracks and works on projects with the whole team for the duration of the project. This gives project managers a complete view of project deliverables throughout its lifecycle. In turn, this data should sync with timesheets to give a comprehensive view of budget usage that is comparable to project scope.

Overall, the growth of the professional services industry is great news; however, it is also likely that this growth is going to kill companies that don't have the systems in place to manage it. More and larger projects can cause serious damage to your bottom line if they are not properly managed, but if managers can put the right systems in place to be able to effectively communicate to their clients, accurately track budgets and transparently manage projects from inception to completion, then professional services firms will successfully navigate their growth and keep their clients happy.