Bringing resources onboard only when you need them, effectively and efficiently managing your project resources’ tasks that are assigned to them, and how you stay in touch and conduct team meetings all have something to do with keeping your resources working efficiently and keeping your projects as profitable as possible.  Resources aren’t cheap.  Mostly likely you’re overseeing resources that are billing out to project clients in three figures per hour – using their time wisely and ensuring they’re working on what they should be working on can have a huge impact on the final profit margin for your project.

Let’s examine a few concepts to make project more profitable.

1. Use tools to effectively manage resource tasks

It probably goes without saying that mapping out the project and resource assignments with project management software is critical to the project.  And using an effective collaboration tool like Seavus’ Project Viewer can help everyone easily report status and stay on top of their assigned tasks.  But that information needs to go well beyond just the project manager’s eyes.  The customer will want to see it as well, but if the project team also has constant insight into the overall project view and tasks as well as how and where their efforts fit in, they’ll have more ownership of those tasks.  Keep them informed and focused on their tasks, give them revised schedules every week showing current assignments and task completion percentages, and hold them accountable to that information as part of your weekly status reporting and meetings.  Team members who see where they fit into the overall plan and are consistently aware of your expectations of them will be more focused and more productive.  And your project will be more profitable for it.

2. Bring resources onboard just in time.

One key aspect of managing your project resources for the goal of maximum project profitability is the concept of only bringing resource on to the project as they are needed.  Most resources in professional services organizations are required to charge their time somewhere.  If you have idle resource assigned to your project you can be assured that some of their ‘down’ time is directly hitting your precious project budget.

When the project manager and business analyst are working closely with the customer team to finalize project requirements during the planning phase, there’s no need to have the technical lead already assigned to the project with little, if any, need for work.  Plan out when resources will come on the project and look for ‘down’ times when they can be released for other work.  That way you can both maximize their productivity on your project tasks and minimize needless charges to your project budget.

3. Meet regularly with the internal team to stay on top of progress.

Weekly internal project team meetings are necessary and are a good idea for two key reasons:  1) it’s a chance for the project manager to get the latest and greatest status information in preparation for a formal status meeting with the customer and 2) it’s an opportunity for status checks on tasks that have been assigned to the project team.  Accountability is critical as most project team members are likely assigned to other concurrent projects in the organization.  These internal discussions keep the team focused on your project’s priorities and help keep everyone productive.  And productive team members who are being held to a high level of accountability for their efforts will help your project budget stay on track.

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4. Track requirements carefully

The project manager can make this as detailed or as simple as they want.  The key concept here is to track requirements as those functions are built into the system that is being developed.  It is usually best to do this within the original requirements document – noting, as the system is developed, where key requirements are being met.  This will serve two main purposes.  1) It will document that the requirements were included in the design of the system, and 2) it will make it easier for the end users to test the system at user acceptance time as they’ll better understand how to verify the requirements and create test cases to fully test functionality.

5. Keep a close grasp of overall project scope

One of the most difficult things to do as a project manager is perform scope control.  During the planning phases of the project requirements are discussed, revised, detailed, and documented.  And ultimately, they are formally agreed upon and signed off – thus becoming the benchmark that the system or solution will be created to meet.  They will serve as the basis for design, development, testing, user acceptance testing, and – finally – solution signoff and deployment.

Obviously then, managing the scope of work of the project – or the work that must be performed to meet those requirements – becomes a critical responsibility of the project team and the project manager.  Scope management is more than just creating change orders, more than just watching what your team is working on and more than just tracking requirements.  It’s making sure that at all times what you’re assigning in the project schedule in terms of tasks your team and the customer’s team are working on are, indeed, real tasks that relate to the scope defined by the original statement of work of the project.  And the project manager and his team must be on top of that to make sure they are maintaining the profitability of the project.

6. Don’t fear the change order

If the project manager finds that his project team members are performing unplanned work that is essentially ‘out of scope’, then the creation of change orders to document the work that is being performed or needs to be performed will allow the project manager to formally charge the customer for this work.  Most projects require change orders at some point during the project as new requirements come to light and additional functionality must be added.  Documenting this work, estimating the hours and price, and getting customer signoff to perform the work will help the project remain profitable and on budget for a successful deployment.

7. Keep your project team on task

By closely tracking project team members’ activities on assigned tasks the project manager can ensure that they are doing the assigned work and staying on track.  When project team members are working closely with the customer, it’s easy for ‘extra work’ that the customer requests to find it’s way into a project team member’s efforts – work that may not actually be part of the original agreed upon requirements of the project.  Unplanned extra work like this can lead to unplanned hours being spent on the project which ultimately hurt the profitability of the project.  Weekly internal project team meetings setup to discuss project task progress will keep the project manager in tune with what work the team members are performing and will allow the project manager to redirect their efforts if unplanned work is happening.

8. Draft the initial budget

As the project manager, you should already have a great starting point budget-wise using the project statement of work and an estimate which also may be the sale price of the project to the customer.  From this scope and the estimated price, the project manager can create a draft budget that – along with the draft project schedule and assigned tasks – will begin to take shape and take on detail as more detailed work is mapped out.

The end result should be a full-scale, end-to-end project budget showing all resources, equipment, vendors, and other items that will be charged against the project and when those charges are expected to occur.  For resources, of course, this information comes from the timing of their detailed tasks in the project schedule.  Starting with a well planned project budget that matches up with the price and scope of the project will help get the project off on the right foot financially.

9. Delegate accountability

Our project team members are often involved in multiple projects running concurrently.  At the end of the week, when everyone is documenting how and where they spent their time, there are always a few hours that are hard to assign to a particular task or project.  They were viable working hours, but by Friday afternoon it’s hard to remember every detail of the work you performed that week.  Those ‘grey’ hours have to get charged somewhere and you’ll find that your project team members often place those hours on the project whose manager is not watching the budget closely.

Involve your team in your weekly budget analysis.  Help them to understand how important the budget is and what it’s health status is on a weekly basis.  If they know that you’re a project manager who is concerned about the project’s budget and profitability, your project will not be on the receiving end of those ‘grey’ hours.  And your project will be much more financially healthy for it.

10. Always be reforecasting

You have to make the budget a living, breathing thing that you stay on top of throughout the engagement.  It’s definitely not enough to create a detailed budget and then leave it alone.  A budget that is closely monitored throughout the project engagement can never get too far out of control without the project manager knowing it.  A 10% budget overage is easy to correct.  A 50% budget overage is nearly impossible to recover from.

Keeping on top of your budget and re-forecasting often can be a great way to keep up with your finances and manage your business successfully. This can lead to large company growth and a possible future transition to corporate business. Having the support of a corporate law professional like  Steven Guynn can ease the transition and build confidence in your choices.

Review the budget on a weekly basis and revise it with the actuals from the previous week. 

Watch for trends and remember to revisit identified risks as you review and remap the budget on a weekly basis.  If things are beginning to get off track budget wise, work with your team and customer on possible solutions before it gets out of hand.