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It\u2019s not easy to keep track of project costs. It\u2019s even harder to relate them to resources, time, and budgets while projects are still ongoing.<\/p>\n
Often, we find ourselves waiting to the end of the month (or even longer) to see accurate project financials. By that time, it\u2019s too late to make quick decisions if a project isn\u2019t on track.<\/p>\n
In this era of continuous change, organizations need to keep a tight rein on their finances. As a result, waiting until the end of the month, milestone, or project for definitive answers is no longer enough.<\/p>\n
Project financials must be available on-demand \u2013 at any stage \u2013 to inform fast, accurate decision making.<\/p>\n
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In the past, project financials focused on costs and revenue. However, such a simplistic approach is no longer enough to enable project teams to adapt to continually changing customer needs.<\/p>\n
Today, project financials are focused on managing scenarios and making tradeoffs to support continuous planning cycles and ongoing work. It\u2019s not just about which projects get funding \u2013 it\u2019s about what return the time and budget invested will generate.<\/p>\n
In such a fast-paced environment, understanding the bottom line of every financial decision is essential. Everybody from the project team to senior leaders needs to understand the implications of each decision so they can make accurate, timely calls that contribute to the organization\u2019s broader goals.<\/p>\n
Accurate financial data based on actual project performance can help your organization:<\/p>\n
Up to now, most organizations have managed project financials separately from project work, often using a procurement system like SAP or Oracle. While there is logic to this approach, it isn\u2019t conducive to the demands of today\u2019s continuous work environment. After all, how can you make accurate decisions about an ongoing project if you can\u2019t tie financial data to the work in progress or already completed?
\nThe solution is simple. When you manage financials alongside work \u2013 using the same system for both \u2013 it becomes easy to see every project decision\u2019s bottom line.<\/p>\n
All it takes is three simple steps.<\/p>\n
Step 1: Identify the real cost of work across your organization Step 2: Proactively improve planning and decision making<\/strong> When you have systems in place to track project costs and resources in real-time, you\u2019ll dramatically improve your ability to make fast, accurate decisions \u2013 both for individual projects and at a broader strategic level.<\/p>\n For example, if your data shows that a project phase or task is trending over budget, you can immediately decide how to respond. On the other hand, if you had to wait until the end of the month to have accurate data, it might already have gone significantly over budget, leaving you in a far worse position.<\/p>\n Having real-time data on project work and financials can also help you identify broader trends. For example:<\/p>\n When it comes to planning for the future, having a comprehensive set of data that shows how employees, projects, and portfolios have performed is essential \u2013 and that\u2019s exactly what you\u2019ll build when you manage project financials and work in the same system.<\/p>\n In effect, your enterprise work management<\/a> system becomes the single source of truth for all elements of planning, execution, and monitoring. This enables you to accurately forecast project and portfolio performance based on up-to-the-minute work and financial records \u2013 and adjust dynamically to respond to change.<\/p>\n For example, you can:<\/em><\/p>\n Step 3: Align and optimize all work against business goals<\/strong><\/p>\n The ultimate goal of all project work is to support business goals, whether through increased revenue, reduced costs, or other measurable outcomes. Having a single source of truth for project work and financials makes it infinitely easier to optimize project resource deployment.<\/p>\n This has obvious benefits for the organization as a whole, but it can also be a huge benefit for project and portfolio managers. Having the ability to demonstrate how work and financials correlate to business goals can be the difference between:<\/p>\n 1. Keeping all of your resources; or, To illustrate this, consider this customer story, recently reported to our VP of Customer Experience, Angela Bunner.<\/p>\n At this individual\u2019s organization, management inspected all departments to see what projects they had underway and how they were performing. This individual heard from other departments that the inspection was grueling, with meetings running to multiple hours.<\/p>\n However, when the team came to inspect this individual\u2019s projects, the meeting took 20 minutes. She was able to pull up dashboards in Planview AdaptiveWork to aid the discussion. These dashboards reflected her capacity plan, what her teams were doing, and how their work aligned to the organization\u2019s goals using real-time resource and financial data.<\/p>\n The result:<\/strong> the inspectors moved on without making any reductions to the organization because they could quickly and clearly see the value the division was having on business results.<\/p>\n This is the power of having on-demand data for both project work and financials \u2014 the ability to make fast, accurate decisions at all levels and ensure resources are invested to best support business objectives.<\/p>\n Know the Bottom Line of Every Project Decision<\/strong><\/p>\n This article has covered the basics of how and why you should manage project financials and work through a single system. In reality, there\u2019s a great deal more to say on the subject.<\/p>\n For a full rundown, watch our latest on-demand webinar, presented by Planview AdaptiveWork\u2019s VP of Customer Experience, Angela Bunner. The webinar covers:<\/p>\n Watch now:<\/strong> Maximize Your Impact: Know the Bottom Line of Every Project Decision<\/a><\/p>\n It\u2019s not easy to keep track of project costs. It\u2019s even harder to relate them to resources, time, and budgets while projects are still ongoing. Often, we find ourselves waiting to the end of the month (or even longer) to see accurate project financials. By that time, it\u2019s too late to make quick decisions if…<\/p>\n","protected":false},"author":205,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_editorskit_title_hidden":false,"_editorskit_reading_time":5,"_editorskit_is_block_options_detached":false,"_editorskit_block_options_position":"{}","footnotes":""},"categories":[35],"tags":[],"class_list":["post-18403","post","type-post","status-publish","format-standard","hentry","category-pmo-project-management-organizations"],"acf":[],"yoast_head":"\n
\n<\/strong>How do employee hours translate into dollars? Answering this question requires two components:<\/p>\n\n
\nYou don\u2019t have to go down to the individual level, and clearly, not everybody should be able to see what other individuals earn. By setting average role-based rates, you can estimate labor costs for different types of project work. If your business relies on billable hours, you should also determine hourly bill rates so you can easily measure and track profit margins while the work is in progress.<\/li>\n
\nWith the right system, time tracking at the individual level can be fast, easy, and, above all, mandatory. If you don\u2019t track time spent on projects accurately, you\u2019ll never really know how people spend their time. As a result, you\u2019ll never have accurate project financials.<\/li>\n<\/ol>\n
\nHaving lots of data is only useful if you have real-time visibility. If you don\u2019t, you simply won\u2019t have an effective basis for sound decision making.<\/p>\n\n
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\n2. Losing them to another project or priority.<\/p>\n\nIncrease your business agility with Planview AdaptiveWork\u2019s project management software<\/div>\nTake a Product Tour<\/a><\/div>\n<\/div>\n\n
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