We are now on to Part 2 of this three part series on ways to increase or protect the profitability of the projects we manage. In Part 1 we examined the obvious area of budget management and ways we can handle the project budget, analysis and forecast to protect and possibly even increase the project’s profitability. In this Part 2, I’m going to discuss resource management and ways we can best manage our resource to keep our projects as profitable as possible.
In Part 2 of this three-part series on increasing project profitability, we’ll examine the role of effective resource management in keeping project budgets on track. Equipment, third party vendors, and data center charges – among other things – get expensed to our project budgets. But far and away the biggest drain on project dollars is the efforts of project team members being charged against the project budget. These are the individuals charging probably anywhere from 20% to 100% of their time on a daily basis to our projects and they aren’t likely billing at cheap rates. Mostly likely they are dinging the project budget for anywhere between $100 and $200 per hour or more so every hour accurately charged counts toward project costs and – depending on how the project is billed – revenue. Inaccurate time charges and unproductive time can really kill the project budget and profitability fast when you’re working with those numbers. So, anything the PM can wisely do to manage those resources and costs will definitely help the project’s financial health in the long run.
To keep the project financials as healthy as possible in terms of resource usage and management, I’ve concluded that the PM should follow these three concepts…
Bring resources onboard only when needed.
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.
Use the right software to manage tasks.
Use internal meetings to connect with the 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.
In Part 3 of this series, we’ll examine the role that change control and change management can play in the project’s revenue stream and profitability.
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A Business Solution Designer and IT/PM consultant and author with over 25 years of software development, management, and project management experience leading initiatives in Manufacturing, Government Contracting, Gaming and Hospitality, Retail Operations, Aviation and Airline, Pharmaceutical, Start-ups, Healthcare, Higher Education, Non-profit, High-Tech, Engineering and general IT. Brad is married, a father of 9, and living in sunny Las Vegas, NV.