3 Challenges Faced by Project-Based Companies and How to Overcome Them

Author

Marco van der Kooij | Managing Director Kairos Software Benelux

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Project-based Companies

What are the most common problems for project-based companies?

Working as a project and transformation manager in IT-related projects for many years I have always faced three common problems, when working in and managing multiple projects at the same time:

  1. Optimizing demand with supply through capacity planning, resource and skills management
  2. Transparency in and timely management of project profitability
  3. Talent management

 

 

Project-based Companies

What are the most common problems for project-based companies?

Working as a project and transformation manager in IT-related projects for many years I have always faced three common problems, when working in and managing multiple projects at the same time:

  1. Optimizing demand with supply through capacity planning, resource and skills management
  2. Transparency in and timely management of project profitability
  3. Talent management

Project-based organizations and companies in e.g. engineering, architecture, research & development, IT and consultancy services face similar problems to manufacturing companies as they seek to optimize demand with supply and profitability at the same time. Manufacturing companies have invested heavily in new methods like sales and operational planning (S&OP) or integrated business planning (IBP) with automation to solve these problems. Meanwhile project-based organizations often still rely on multiple spreadsheets for capacity planning and resource management with project-based accounting software to plan and control their business. When a business is growing this is not a sustainable solution.

Purpose-built professional services automation (PSA) software is available to overcome these problems and optimize profitability at the same time. 

Project-based organizations and companies in e.g. engineering, architecture, research & development, IT and consultancy services face similar problems to manufacturing companies as they seek to optimize demand with supply and profitability at the same time.

Manufacturing companies have invested heavily in new methods like sales and operational planning (S&OP) or integrated business planning (IBP) with automation to solve these problems. Meanwhile project-based organizations often still rely on multiple spreadsheets for capacity planning and resource management with project-based accounting software to plan and control their business. When a business is growing this is not a sustainable solution.

Purpose-built professional services automation (PSA) software is available to overcome these problems and optimize profitability at the same time.

Kairos_PSA

 

1. Optimizing demand with supply through capacity planning, resource and skills management

Creating the quotation in the PSA software provides two benefits: the calculation of the final proposal is automatically the budget for the project and the sales pipeline is automatically part of the forecast. At the same time when new projects or extensions of projects come in, the right resources can be scheduled based on availability, hard and soft skills required to deliver the project result on time and within budget. For this it is beneficial to have a high-level multi-project planning based on roles and when a project is signed to create the detailed planning derived from the high-level planning.

 

2. Transparency in, and timely management of, project profitability

When the calculation for the budget, time registration, resource and project management with change requests are available in the same system, then it is much easier to track project progress and profitability in a transparent manner. Moreover, profitability will improve when better insight is available to match supply with demand, with the right people in a high-performance team providing the best project result for a happy customer.

 

3. Talent management for high performance teams

To provide an optimal project result for the customer the right people need to be allocated to the right high-performance team for the project. With many projects needing to be staffed, how can you optimize resource allocation to meet both revenue objectives and the development of people at the same time? Moreover, with ‘Generation Z’ entering new jobs there is an additional challenge, as it is the first truly digitally-native generation. ‘Gen Z’ does not just appreciate a connected world: they expect it. Professional Services Organizations must prepare to onboard this new generation by examining their team culture and their technology priorities. Failing to adjust, puts companies at risk of missing out on top talent, as seen below.

So, there is an important relationship between capacity planning, resource, talent and skills management to optimize project profitability. To learn more about this, please see the Design Group Italia case study.

ABOUT THE AUTHOR

Marco van der Kooij

Managing Director, Kairos Software Benelux

Marco is an entrepreneur. His mission is to find new software solutions for continuous modernization and automation. He has worked for several consulting firms and software vendors in various research & development, sales, consulting, and management positions. 

Find out more about Kairos PSA