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4 Ways to Improve Employee Utilization

Posted by Scott Seal on May 04, 2023

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In the most recent  AE Clarity Report  issued by Deltek, the average employee utilization rate was reported as 58.5%. Firms are often confronted with how they can improve employee utilization to create a positive impact on the firm’s bottom line, all while keeping employee morale in mind. To improve employee utilization in both the short term and long term, focus on these four key areas: 

1. Set Realistic Utilization Targets

One of the key factors that affect employee utilization is the target utilization rate. While it's essential to aim for high utilization rates, it's equally important to set realistic targets that employees can achieve without feeling overburdened.  

These realistic targets allow for staff to focus on other, non-production (yet still important) initiatives for the firm, such as business development, staff development, and team building. Firms that allow employees time to focus on these areas will greatly increase employee productivity in the long run through increased employee and team efficiencies, as well as reduced staff turnover. 

Unrealistic targets can lead to burnout, poor performance, and low morale. On the other hand, achievable targets can motivate employees to perform their best, leading to increased productivity and job satisfaction. For more information on setting realistic targets for employees, read our blog here!

2. Align Resources Effectively

Proper resource allocation is crucial for improving employee utilization. Before starting a project, it's essential to align resources based on their expertise, level, and availability. This ensures that tasks are performed efficiently and effectively, and labor costs are kept within budget. Proper resource allocation also helps to keep employee realization aligned with employee utilization, resulting in accurate billing and better profitability.

3. Manage Client Expectations

Effective client management is a key factor in improving employee utilization. By managing client expectations and delivering quality work on time, firms can build trust and long-term relationships with their clients. It's also important to identify tasks that are not part of the original scope of work and notify clients promptly. By doing so, firms can avoid scope creep and allocate resources efficiently, improving employee utilization and profitability. Need some help with managing client expectations? Find out exactly what they’re thinking with our presentation on Understanding the Client's Mind Using Feedback!

4. Leverage Technology

Technology can be a game-changer when it comes to improving employee utilization. By using tools like Deltek Vantagepoint, firms can track employee utilization in real-time and make data-driven decisions.  

This real-time visibility gives your firm insight and the opportunity to influence the final results to ensure resources are properly aligned, client expectations are managed, and employee utilization is maintained. 

Technology can also automate mundane tasks, freeing up employees' time to focus on value-adding activities. 

Other Ways to Improve Employee Utilization 

In addition to the four ways mentioned above, here are a few bonus tips that your project-based firm can use to improve its employee utilization. 

  • Foster a Positive Work Culture: A positive work culture is essential for improving employee utilization and retention. By creating a supportive and collaborative work environment, firms can boost employee morale, motivation, and engagement. This leads to higher productivity, better quality work, and lower staff turnover. Some effective strategies for fostering a positive work culture include employee recognition programs, open communication, and flexible work arrangements. 
  • Offer Professional Development Opportunities: Providing professional development opportunities to employees is another effective way to improve employee utilization. By investing in their employees' skills and knowledge, firms can improve their performance and productivity, leading to higher utilization rates. Some effective ways to offer professional development include mentoring programs, training sessions, and educational courses. 
  • Monitor and Measure Results: Finally, it's essential to monitor and measure employee utilization regularly to identify areas for improvement. By tracking key metrics like billable hours, utilization rates, and staff turnover, firms can identify trends and patterns, and make data-driven decisions. This helps to optimize resource allocation, manage client expectations, and boost employee utilization and profitability. 

In conclusion, improving employee utilization requires a combination of effective strategies, tools, and a positive work culture. By setting realistic targets, aligning resources effectively, managing client expectations, fostering a positive work culture, offering professional development, leveraging technology, and monitoring and measuring results, firms can improve their employee utilization and enhance their profitability and growth.  

With the right approach, firms can achieve high levels of employee utilization, leading to better outcomes for both the firm and its employees. View our free webinar on optimizing project management processes to learn how you can improve employee utilization and take your professional services firm to the next level. 

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Uncovering Top Trends in Financial Management

Posted by Scott Seal on October 26, 2022

2022 - DVP Clarity Financial Management-Feature

The data from the 43rd Deltek A&E Clarity Study shows that the opportunity outlook for A&E firms is bright. However, there are significant challenges to seizing that growth. Although net revenue growth is forecasted to grow to 17.6%, operating profit on net revenue is down by 6%. Recruiting and retention challenges loom large over firms, undermining their ability to meet demand and extract profits.  

Here are the top takeaways from the study, along with guidance for navigating the challenges and opportunities ahead.

Labor Challenges and Growing Pains Are Top Stressors 

Labor challenges are front and center for A&E firms, as finding and retaining qualified staff ranked as the top financial challenge. Forty-four percent of respondents said it was their top challenge, a sharp increase from last year. In this highly competitive job market, A&E firms have more open positions, and the cost to acquire new employees has increased. To win over candidates who have plenty of options to choose from, firms are offering increasingly attractive (and often costly) compensation packages.  

Managing growth was the second most commonly cited challenge. Demand is high, leading to an 18% growth in estimated net revenues. But with rising demand comes new challenges. Professional services firms are challenged with bidding competitively and ensuring the timely completion of work. Labor issues are a contributor to this challenge since firms need to fulfill staffing needs to meet current and future demands. 

With inflation and labor costs cutting into profit margins, A&E firms also said increasing profitability is a top concern. Collection periods increased by nearly two weeks this year, and many firms must work diligently to complete work on time, invoice quickly and collect payment as soon as possible. Encountering delays at any point in the process threatens profits and their ability to grow.  

Staffing Challenges Impact Key Metrics 

Persistent staffing challenges aren’t just keeping firm leaders up at night—they’re impacting financial performance. Here are some of the most notable metrics: 

  • Operating profit on net revenue dropped to 12.8%, a level last seen in 2015.

  • Overhead rates increased to 160%, a 14% increase. 

  • Utilization rates dropped to 58.5%, the lowest level of the last 10 years. 

After rising steadily over the past 10 years, operating profit on net revenue dropped significantly. This is largely driven by an increase in overhead rates. As firms face longer project ramp times and non-billable periods while backfilling roles, overhead rates rise. Higher employee turnover is also a contributing factor to lower utilization rates.  

Performing the Backlog Balancing Act 

Backlogs increased by more than three weeks year-over-year. It’s an indication that, while firms are in demand, they need to perform a delicate balancing act to complete projects on time. Bidding, scheduling, and labor planning must be precise, otherwise, increased activity can hinder project delivery, which only reduces client satisfaction in the long run. Firms that can effectively manage expectations will be able to reduce their backlog to sustainable levels. 

Growing backlogs are influencing the average collection period, which increased by 13 days. Firms wait for nearly 77 days, on average, to receive payments on accounts receivable. This is a return to the average collection period seen in 2012 and 2013. Back then, firms were able to lower this rate in the following years. To reduce the average collection period now, they may want to look at returning to those previous strategies.  

For a deeper dive into the key financial metrics from the study, watch the webinar 

Looking Ahead 

Financial leaders of A&E firms are focused on meeting day-to-day challenges. When asked about their financial priorities for next year, firms selected training project managers on financial management and improving business processes as their top two choices. This is in line with the results from last year. Notably, firms are less concerned with better forecasting, better growth management, and organizational changes and realignment than they were last year. This indicates that they’re focused on improving the efficiency and effectiveness of daily processes. 

The most successful firms will position themselves for success by also focusing on the HR challenges they face. Unconventional benefits, loyalty rewards, and engagement programs can help companies attract and retain the employees they need for the years ahead. Forty-one percent of firms said that they plan to make talent acquisition and retention investments one of their top priorities next year. Those that make the right decisions will stand out from the pack.  

Get More Financial Management Insights 

Despite the challenges A&E firms face, it’s possible to seize the opportunities ahead. By looking back to previously proven strategies and preparing for future demand, financial leaders can make the most of the market. For more financial management insights, click below to download the full report.  

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Project-Based Firms and Deltek Collaborate Through the Deltek Idea Portals

Posted by Scott Seal on August 03, 2022

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How many users have brainstormed good ideas regarding their Deltek Vantagepoint system that they wanted to share but didn’t know how? What about any suggestions for product enhancements that these same users would want to offer? Fortunately for these users, Deltek has recently launched the Deltek Idea Portals, a new online tool for submitting and promoting ideas to Deltek product management directly. Let’s check out how it works, the reasoning behind it and what Full Sail Partners’ consultants have to say about it. 

Using the Idea Portals 

The process for using the Idea Portals is that first, the Deltek Authorized Support Contacts (ASCs) at the firm would access the link for the Idea Portals within the Deltek Support Center (DSC). To determine a firm’s designated ASC, contact the firm’s Customer Success Manager. Next, the ASC would click on ‘Share Your Ideas’ and be taken to the links for certain Deltek products. For instance, users from Full Sail Partners’ clients which are project-based firms would choose the Vantagepoint/Vision idea portal. Once inside, ASCs can share ideas about their specific products, can vote and add insight on other ideas that have been presented. ASCs can subscribe to the item to receive status updates when those ideas move from being considered to planned and then released.  

Here is a quick screenshot of what users see when they go into the DSC. For more information, users can review the Idea Portals quick start guide. 



Promoting a Cooperative Effort  

From extensive research, Deltek learned that products developed without input from users are not successful when delivered in the end. So, the thought behind creating the Idea Portals was to provide one standard cooperative way for presenting ideas on Deltek products. This updated and convenient process promotes a two-way communication between project-based firms and the product management team at Deltek while ideas are vetted and prioritized. Not only can users see how their ideas are being received and processed by Deltek, but others interested in the subject matter can provide additional suggestions and input. 


Feedback from Full Sail Partners’ Consultants  

Full Sail Partners’ consultants have recently been visiting the Vantagepoint/Vision Deltek Idea Portal and offered the following feedback. 

One Full Sail Partners’ consultant really liked the focus on the statuses that Deltek is using to communicate where the idea offered was in the process. In particular, the statuses of “Likely to Implement” or “Planned” were interesting as was the status of “Released.” Below are some screenshots that this consultant took experimenting in the Idea Portals. From these images, Deltek users can catch a glimpse at what ideas are being considered and which statuses those ideas are being given.  

In this initial screenshot, on the right side in the highlight, there is “Filter by Status” where users can see what the available options are for statuses of idea consideration. Look at the 2090 ideas for future consideration. That is certainly a lot of ideas coming from project-based firms. 


In these other screenshots, Deltek users can see the types of ideas that are being offered, how many people voted on those ideas and the status that the idea was given by Deltek product management. 


Here is an example of what users will receive when they subscribe, and an idea is voted on. In this case, the idea was “Update the PTO Plan when an absence request is approved.” Look in the comments section to see where other users can make their contributions to help these ideas move forward with product development. 


Another Full Sail Partners’ consultant has gone even further in really utilizing the Vantagepoint/Vision Idea Portal. She decided that when interesting and relevant topics come up with her clients, she takes them directly to the idea portal if they have never been before. Then she teaches them how to search for what ideas they are interested in offering to Deltek product management and how to enter their ideas if they are new. This is a screenshot of where users add their ideas for consideration. 


With her observations and discovery, she has learned that many of her and her client’s desired items are already there, and it would be a great idea to create an email to Deltek at VantagepointIdeasPortal@deltek.com documenting the cases that seem the same. For example, as she searched for specific ideas and voted on ones already in the portal, she found duplicates like “credit card reconciliation update to make it more dynamic for payments” which was found twice or “controlling how to create a project” which appeared similar to three other user’s ideas. From what this consultant was told, Deltek is combining them when they are found. 

This same consultant also indicated that when she voted on an idea in the Vantagepoint/Vision portal, in her case it was for the “ability to update scheduled reports without having to unschedule, update the report and reschedule,” she received a survey from Deltek. This survey asked her about use cases and the most needed reasons for updating etc. This showed her that Deltek was really listening and trying to make effective changes. 

Teamwork Makes the Dream Work 

With time and collaboration, these Idea Portals should ensure that a plethora of ideas are heard and evaluated by Deltek product management, and from these suggestions, users should be provided with many of their needed solutions. Any good idea, no matter how small, should be offered to Deltek using this process. Remember, “you can’t win, if you don’t play.” 


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The Pitfalls of Project Management Planning for Project-based Firms

Posted by Scott Seal on October 14, 2015

Project Planning Blog GraphicCongratulations! Your firm just won the largest project in its history and it’s time to celebrate, or is it? Unfortunately, winning the big project doesn’t guarantee success and big profits. For project-based firms, project management is synonymous with profit management, but many projects start in the red making it nearly impossible to make a profit. Here’s a look at some common pitfalls project-based firms face before they ever start a project.

Accurate Job Costing

If you have been on a proposal team, you know the feeling of relief that overcomes you once you finally submit the proposal. Weeks of working long hours reading and writing exhilarating technical content and attending meeting after meeting. All this work and time exhausted by several people when in reality, your final price is the biggest factor in winning. But, can your firm deliver the project on the proposed budget?

Accurate job costing requires accurate information, and most firms believe they have the right systems for their business model. Excel sheets and the time clock work, but these systems don’t communicate very well. Even more, consider the unreported overhead time to reconcile these systems and the mistakes made during this process.

“If it works, don’t fix it” doesn’t always apply, and information in more than one system doesn’t work when trying to maximize profit. When it comes to job costing, you already have to worry about inaccurate estimates from suppliers. These are costs you can’t control, so be sure to take control of your internal cost monitoring to create profitable bids you can deliver.

Establishing Key Performance Indicators

Key Performance Indicators (KPIs) are various quantifiable measurements used for determining the success of the project. The KPIs establish a guide to the project and are used as the basis for critical decision-making. More importantly, not executing on a specific KPI can affect the project’s profitability for your firm and your client’s satisfaction.

Here’s where some project-based firms struggle. In many cases, several of the KPIs are destined for failure before the project starts. The problem is that defining KPIs is truly challenging and your clients usually lack experience with the process. All too often, this results in KPIs that are unrealistic and unmeasurable.

Establishing realistic KPIs is the first step to managing the profit of a project. As the project manager, it’s in your best interest to have a strong role in creating the KPIs. Good project KPIs have values that can be accurately measured and clearly reported on. Further, they need to be understood and agreed to by all parties. To learn more about project KPIs, click here.

Risk Management

Projects are full of unforeseen obstacles and predicting these is not always possible, but this doesn’t mean your firm can’t minimize the impacts. They just need to have a formal risk management strategy. Although this might be a time consuming process, it’s a necessary process required to protect your profit.    

A study by Info-Tech Research Group found that organizations with a formal risk management strategy are more than half as likely to have project management success than those with a reactive approach. To put it another way, having a risk management strategy before the project gets started is critical to the project’s success and profitability.

A risk management strategy starts with identifying common risks such as unrealistic schedules and requirements that fail to align with the strategy of the project. Once these risks are identified, evaluate the impact each risk will have on the project. From there, make a contingency plan that has a pre-planned response to the unexpected event.       

Become a Profit Manager

Don’t start your next project in the red. Project management starts with project planning, and not having the right systems and processes in place can hinder the success of the project. If your firm is falling into any of these pitfalls, consider the changes that you can make to become an effective profit manager.  

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Management of Change Series: The Executive Perspective

Posted by Scott Seal on October 16, 2014
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You are the leader of a company.  People look to you for establishing goals, creating direction and for driving the company’s success.  When looking at managing change, your perspective is from 5,000 feet … but with all the responsibility of the minutiae.   This second installment in our Management of Change series focuses on how you, the executive, must navigate your employees through the rough waters of change to the calm seas of success.  Here are the important steps.

1. Establishing goals

In order to effectively manage change, an important first exercise is a goal setting session with the entire leadership team.  Unfortunately, we hear too often, “I know it’s important, but we don’t have time for goal setting meetings with all the other meetings we already have.”

Without goals, though, here is what you’re doing.  Let’s say you want to take a vacation.  Great, now book your flight(s), reserve a hotel room, and schedule some activities.  But wait – where are you going?  Is your hotel room in the same place as where your flight landed?  How much is this trip going to cost?  Are the activities in the same area as your hotel?   In your personal life, of course you know all the answers to these questions, because you already had your goal, your destination in mind and your family buy-in before making decisions and actually spending money.  But do you lead your company with this same clarity of purpose?  Do you have clear and specific goals and the consensus of the management team before making decisions and sending money?  Too many, regrettably, do not. 

It is time consuming and difficult, but absolutely necessary to establish clear goals that also have the buy-in of every member of your leadership team

2. Creating direction

Now that you know where you’re going, how are you going to get there? As we discussed in our first piece, “change management requires a structured approach for lasting benefits”, that structured approach is the direction, the roadmap that the executives of companies need to create in order to reach company goals. 

Of course, you know all this already; you spend hours of your valuable time in seemingly endless business planning sessions.  But this is a bit different.  When looking at change, you are not just trying to reach a goal, like higher profitability or increased revenue, but you’re working to reach a goal of minimizing any negative impacts change might bring.  Change is usually required most often as a result of

  • External forces like politics, environment, or technology


  • Internal requirements like a major reorganization or change on offerings

Another thing you are already quite aware of … change is hard.  It effects not only your established company processes but, more importantly, the people in your organization. 

Process Changes

When change impacts your processes, every area in your organization is impacted:  Finance impacts HR which impacts Marketing which impacts IT which impacts … well, you get the picture:  Your company is an interrelated amalgamation of interactive expertise.  Although executives often speak in department silos – “Let’s work with Finance on that new report” – we all know that the report depends on information from every other department in the company which means that “new report” is not just Finance’s responsibility but every department’s responsibility.  And why?  Defined as a series of actions or steps taken in order to achieve a particular end, process is what drives your company’s every day activities which ultimately lead to the achievement of your company goals. 

People Changes

But there’s more.  While change impacts your processes, it’s the people in your organization who are actually running those processes, and it’s the people who struggle with change (yes, even you executives are people who struggle with change too).  Peter Drucker, Wikipedia tells us, “whose writings contributed to the philosophical and practical foundations of the modern business corporation, says that ‘We now accept the fact that learning is a lifelong process of keeping abreast of change.  And the most pressing task is to teach people how to learn.’” Change is indeed a hard and necessary evil but can be abated with training which is the next most important part of company-wide user adoption of change.

3. Drive Company Success through Powerful Tools

dashboardSo what are the tools to allow you to be an effective, involved leader of the management of change process?  Quite simply, an executive dashboard in a technology solution from a company like Full Sail Partners who can customize software for your change management project.  Dashboards, like the one pictured here, can allow executives to get a snapshot of activities taking place during the change process ensuring that you have a pulse on your project.  

Bottom line

As the executive, you have many roles – not the least of which is company change agent.  A tremendously important role necessary to allow your company to continue to flourish in the wake of ever-changing internal and external environs.  The leadership team must clearly define goals and create a clear plan for reaching those goals keeping in mind:

a) The impact of the changes in process and the people who are required to do them

b) The tools and the allies, like Full Sail Partners, Inc., that you have access to which will help manage your change. 

Now is the time for company executives, like you, to accept the challenge of change! 


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What Do Soccer and ERP Consulting Have in Common?

Posted by Scott Seal on August 14, 2014

Here in the United States, our sports zealots perform crazy antics like going shirtless in freezing weather or painting their faces in support of their teams.  But it’s more than the individual antics; the real difference is in the scale of extremism that soccer fans exhibit – a literal global exuberance all in support of their beloved sport.  But wait, isn’t this an article on ERP Consulting? 

Well, believe it or not, soccer and ERP consulting have quite a lot in common: 

  • They both strive to achieve a very specific GOAL.
  • They require coordination among the various efforts of serious talent to make it all happen.
  • True fans are enthusiastic about the team winning.

Breaking it down: Are Soccer and ERP Consulting that Similar?


First, let’s talk about and define ERP.  Enterprise Resource Planning (ERP) is the name given to the compilation of software products and/or modules.  According to “Could Your Firm Benefit From an Enterprise Resource Planning Solution

The original Enterprise Resource Planning (ERP) solutions, introduced in the 1990s, were primarily designed for and used by manufacturers. Today, ERP solutions have evolved and serve as a tool to manage the project life cycle for professional services firms. These include firms involved in IT services, architectural and engineering, design and planning, system integration, and management consulting, to name a few.
Furthermore, according to CIO.com’s “ERP Definition and Solutions
ERP’s must serve “the needs of people in finance as well as it does the people in human resources [and other departments which typically have their] own computer system optimized for the particular ways that the department does its work. But ERP combines them all together into a single, integrated software program that runs off a single database so that the various departments can more easily share information and communicate with each other.” 

This sharing and communicating of information is all geared toward one, single purpose – achieving business goals. 

Putting them together

Next, let’s get back to one of my favorite subjects, soccer.  Soccer is a game requiring the coordination of individual players, each with their own proficiency; sometimes it involves players from different nationalities, or differences in a position focus like a goalie or halfback or a variations in specific skillsets like juggling or dribbling the ball. The players rely on the communicating and sharing of information during a game to one single, purpose – putting the ball into the net for a GOAL, a win.

So, like the soccer team with different players, ERP consulting requires synchronization of dissimilar needs, processes, and indeed functions of the software of different departments, so that the business can achieve its business GOALS, its win.

It takes the right coach to win

ERP ConsultingIn soccer, while the right players, good equipment, and positive fan support are unquestionably important parts of the team’s success, the keystone to an effective soccer team is, in fact, the coach.  The coach’s job is to balance each player’s strengths against the combined team’s goal of winning.

The coach in ERP is the ERP Consultant.  Having the right individual department software is important, but the keystone to implementing a system, evaluating business processes, and bringing all that information together in a meaningful way is the ERP Consultant.  This person, like the coach, has to balance all the individual parts, i.e. departmental needs, in order to reach the business GOALS of the entire organization. 

How to find the right ERP Consultant

Choosing the right ERP Coach, er, Consultant is your important first step.  This person can help you determine the scope of your ERP project – including costs, size, structure, business process evaluation, and ERP goals as well as help you research and find the right ERP solution for your business.  Full Sail Partners, Inc., for example, specializes in identifying the critical resources to create a faster, more efficient, and cohesive business infrastructure for professional services firms looking at ERP solutions.  Ultimately, you need a consultant who

  • listens to you
  • knows your industry
  • understands needs beyond the tool
  • understands your company culture, and
  • knows the ERP industry.

Don’t get a red card

redcardChoosing the wrong ERP consultant or software solution can lead to significant issues penalizing you in dollars, time and public relations.  Following are only two examples of many instances of what happens when ERP implementations fail:

… Knight Capital, [a financial services firm,] recently lost over $400 million in a matter of minutes because of a glitch in its trading software — trading software that wasn’t fully tested and properly deployed prior to production. In addition to the immediate impact of lost cash and profits, the software failure also caused the company’s stock to drop 68-percent the day following the glitch. 

SAP and AxonCity of San DiegoThe city of San Diego, CA terminated its software implementation contract with services provider, Axon, citing “systematically deficient project management practices” and a project that was running $11 million over budget.

But be aware, an ERP Consultant cannot entirely save you from these “red card” losses.  Like the soccer coach, their real purpose is more about setting realistic expectations and sound goals, as well as offering their expertise for avoiding potential issues before they occur.   

In the end

Although analogous in many ways, the reality is that soccer is purely a game to most of us while ERP consultants help you achieve your GOAL – a more efficiently run business resulting in greater success for all your employees.  Calling Full Sail Partners as your ERP consulting expert is your first step in achieving your WIN.  

And while going shirtless in below freezing weather or being painted the colors of your favorite ERP vendor is one way to show your support, it’s not necessary.  But then again…a Full Sail Partners logo on my chest would make me stand out in the crowd. 

Blogs from author Scott Seal


Do You Have the Correct Project Collaboration Tools in Place?

Posted by Scott Seal on February 26, 2014

Project Collaboration ToolsThe weather this winter has played havoc with the daily lives of millions of individuals, as well as countless businesses. 

One industry that has felt the impact in a unique way is that of professional services firms. These firms rely heavily on collaboration among their team members to manage and work on their projects. Unless they were already prepared to allow employees to work remotely, when the bad weather hit, many of them had to simply shut down until employees could once again manage to get to the office. 

Fortunately, technology is offering better and better project collaboration tools that allow team members to work together no matter where they’re located. But that’s just the tip of the snowdrift, so to speak. These solutions also make life easier for individual project managers and team members, increase the amount of creative collaboration among members of the team, and ultimately result in better projects. What’s more, they allow firms to easily include clients based in other locations, helping to maintain and build communication when meeting face-to-face isn’t an option. 

Let’s look at some of the key capabilities that effective project collaboration tools enable within a firm.

  • Communicate with anyone, anywhere, anytime. The most essential capability is making sure all the people involved on a project are able to effectively communicate and collaborate with each other. Any given project can include various employees and teams within the firm, as well as assorted external individuals, such as client representatives, consultants, and attorneys. A group this diverse often presents challenges in terms of finding communication channels and applications software that everyone can access and use — whether from their desktops, laptops, tablets, or smartphones.
  • Organizing the work. A second major function of effective project collaboration tools is to manage the tasks that are involved in each particular project. This function allows the project manager to use a central, intuitive resource to manage the many individual deadlines that are typically managed through email and Excel spreadsheets to complete milestones.
  • Streamlining document management. A third major function that effective collaboration tools address is that of document-sharing. Using a tool such as Kona, for example, allows you to share documents that your entire team (including external members) can view. As a result, instead of searching through dozens of emails to find the documents you need, you and your team have a centralized location. In addition, users have the option of uploading files directly to Kona or using other file-sharing solutions, like Dropbox, Google Docs, or SharePoint.
  • A better view across projects. An effective project collaboration tool allows project managers to have a view across all the projects they are managing. As a result, they not only have insight into the specific tasks, conversations and files for the current project, but can also view upcoming tasks and new conversations and files in one widely-accessible environment. 

Better collaboration, better results

For firms in the professional services space, project collaboration tools offer a wide array of functionalities that can help improve not only the interactions of a given project’s team, but ultimately, the quality of the ideas and solutions the firm delivers to the client. An added benefit of technology-enabled collaboration is that it can help create a better experience for the clients involved — and that can help a firm differentiate itself from its competition.

Deltek Kona, Social Collaboration

Difference Between Project Backlog and Project Forecasting?

Posted by Scott Seal on November 06, 2013

Project Backlog, Project ForecastingProject Backlog and Project Forecasting are two of the major components that predict current and future profitability of a firm. As firms begin to put together financial budgets for future years they are often looking at these two in conjunction between project backlog and project forecasting. Typically there are two different processes for forecasting future revenue:

  1. Project Managers forecast work-under-contract, as part of backlog. This contracted work not performed is the most accurate indicator of short-term revenue. Additionally a firm’s backlog (the difference between contracted work and the work completed to date) reflects past marketing success and current project managers’ ability to balance resources against project workload. How successful a firm is in managing this backlog often determines whether profits are either realized or squandered.
  2. The Marketing group forecasts less-probable opportunities as part of our Project Forecast. Unlike the project backlog, the Project Forecasting discounts project opportunities to reflect uncertainty the project will be put under contract. When reviewed together, these two provide a very good picture of future revenues and upcoming workload.

Benefits of Project Backlog and Project Forecasting

A solid Project Backlog and Project Forecasting process helps manage this balance in the following ways:

    • Provides project managers tools for resource planning, scheduling, and deliverable management.
    • Provides a solid basis for marketing decisions. If your backlog forecast is lower than anticipated then increase your marketing campaigns engine. If your backlog forecast is higher than anticipated then add resources or become more selective about your marketing campaigns.
    • Provides validation of firms’ revenue projections to confirm the accuracy of your corporate financial planning efforts.

The project backlog and project forecasting process need not be complicated; it needs only to provide a standard tool for company-wide project planning and review. Use the following three steps to initiate a project backlog and project forecasting process.

1. Prepare a weekly ‘bottom-up’ forecast by project manager.

    • Each project manager compile a project backlog forecast that identifies active projects under backlog and opportunity forecast that exceed say a 60% probability.
    • Assign team member resources, and then resource loads (using an hours forecast) each project for the next six-to-eight weeks.

There are several benefits of these project manager forecasts which include:

    • Provides the project manager an opportunity to balance resources, identify gaps in workload, and plan for downtime (i.e. vacation, holiday, training, etc.).
    • Provides structure for reviewing project milestones, progress, and budgets.
    • Provides revenue forecast by pairing the forecasted hours with billing rates.

2. Management aggregate review

Once weekly project backlog forecasts are completed, management then can compile and review these aggregated forecasts. This step often provides insight into the following areas:

    • Possibilities of resource sharing between teams or service areas.
    • Provides glimpse at future  revenue projections
    • Identify potential budget problems.
    • Comparison of projected backlog revenues against corporate revenue goals.

3. Comparison to actual utilization.

Finally, we review weekly utilization from timesheets to ensure that forecasting matches reality. These reviews provide a critical feedback loop to improve your project forecasting process.

By following a sound process of project backlog and project forecasting tracking your firm can increase project management effectiveness, make better decisions about marketing expenditures, and improve and validate your corporate revenue planning efforts. These benefits will drastically improve profitability. 

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Why Cash Flow Planning is Essential for Growth

Posted by Scott Seal on October 30, 2013

cash flow planning, cash flow planFor most professional services firms, planning for growth is a natural part of business. There are different strategies for doing so, and choosing the best one depends on your ultimate growth objectives. But whatever your goals, understanding how your growth plan affects your cash flow plan is essential to achieving the results you seek.

The way you grow affects cash flow planning.

Organic growth. There are a number of ways to grow one’s business organically. For example, in a generally healthy economy, your firm could continue doing “business as usual” (i.e., not increase your marketing or business development activity) and still experience significant growth from the improving economy. This type of growth is typically slow-paced; you can keep up with the increased demand either by using existing staff or gradually “ramping up” your staffing to meet the growth curve.

A somewhat more aggressive growth plan might be to expand your client base in the same market niche and geographic area where you’re already doing business. In such a scenario, you are typically increasing your marketing and business development outreach to generate business. As this outreach occurs, you may experience rapid growth that requires you to have staff immediately available to meet the increased client demands.

Strategic growth. Alternatively, you might be planning to significantly expand your service offerings or target market. For example, an engineering firm might add a new service line, or expand into another geographic market. In such cases, you could expect to take on additional marketing and staffing expenses, along with expenses for market research (please do not skip this step), software and equipment and possibly even new office space. These added expenses occur up front, well before you bring dollar one through the door. 

Expect a time lag before reaching ROI.

The fundamental point to keep in mind is that your cash flow will take a hit, probably at least for 90 days for increased staffing costs, and longer for marketing costs. The reason for this is the unavoidable lag between when you begin investing in expansion, and when you actually start reaping the benefit.

Here’s the general reason for the time lag. Once you decide to expand, there are several types of expenses you’ll incur at the beginning of your growth effort — investments that will not bear fruit immediately. For example, there are costs to hire and train new employees, with probably 60 days before they’re doing billable work. Even if you’re very efficient and bill on day 61, then the earliest you should expect payment for their work will be another 30 days, making it a minimum total of 90 days where cash is going out, but no additional revenue is coming in.  

How to meet the demand: sub-consultants vs. salaried staff.

In general, hiring consultants requires less of a cash investment than full- or part-time staff, as they typically will not get paid until you get paid (Paid When Paid, or PWP). This advantage may be offset, however, by the fact that consultants can also be more challenging to manage and they have their own clients (and potentially conflicting commitments as well). Additionally, you still have to invest manager time to assign and manage the sub-consultants’ performance.

On the other hand, while full- or part-time staff may be more costly to hire, they will likely gain institutional and process knowledge as they work, which should make them increasingly valuable to your company. Additionally, they are typically focused on the company’s needs and requirements; you can control their priorities.

Tracking cash flow and return.

The other part of cash flow planning during a growth period (or at any time, for that matter) is monitoring your expenditures and results (hopefully in the form of additional revenue). As with any plan, it’s essential to have an idea of the effort you need to expend, and what results you expect from that effort. Even if your plan is “business as usual” because of an improving market, you should understand what results you expect from the improving market. If you are increasing your marketing effort in your existing market, you should know what you expect from that effort in the form of additional leads, opportunities, clients and, of course, revenue. Without the increased revenue, what is the justification of the increased marketing effort (and assumed increased cost)?

There are a number of approaches for tracking results, ranging from one-off spreadsheets to purpose-built ERP solutions.

In our experience, one of the most effective strategies is to find a solution that accomplishes several key functions at once. Deltek Vision, for example, is a purpose-built ERP solution that provides a unified platform for connecting the front and back office functions — providing up-to-the-minute insight into cash flow planning, as well as accounts receivable, billability and utilization statistics, and much more. It even includes integrated solutions for automating major parts of your processes for customer relationship management, proposal development and tracking.

Watch the details, but don’t neglect the big picture.

Keep in mind that the timeframes for generating ROI mentioned in this article are generalizations. In fact, they’re based on an ideal scenario that assumes making good hires, efficiently training and integrating them, finding a receptive market … and getting paid on time.

Naturally, as the fine print often says, actual results may vary. This makes it even more important to build-in expectations that cash flow will take a significant hit for at least a few months before you start reaping the rewards of you investment.

Growth is rarely painless or easy — but knowing what to expect is far better than wading into a growth plan without knowing when it will start paying off.


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The Business Benchmarking Process: 4 Key Steps

Posted by Scott Seal on July 31, 2013

Business Benchmarking ProcessThe business benchmarking process can be a powerful tool to help any organization make better decisions, run a tighter operation, and better position itself in the marketplace. For the best effect, it pays to use an approach that boils down to four key steps. 

1. Learn from others. If you’re new to benchmarking, it may be helpful to explore how other organizations do benchmarking, and see how your organization compares. Fortunately, there are many industry experts and organizations that share information about their benchmarking process. Some of our favorites are:

Of course, there are enormous numbers of additional companies and organizations that benchmark as well, so you may want to explore further. 

2. Decide what’s important for you. The first step is to choose meaningful measurements to use as your standards or benchmarks. Key performance indicators (KPIs) in the form of financial and project-related statistics can provide meaningful insights into company performance, beginning with how your own company has performed over time. For most professional services firms, there are a variety of KPIs that can be helpful in giving an accurate reading on the organization’s financial and operational health. Some of the most widely used are:

  • Accounts Receivable
  • Average Collection Period 
  • Chargeable Ratio
  • Chargeable Ratio times Net Multiplier
  • Current Ratio
  • Debt to Equity Ratio
  • Employee Realization
  • Employee Utilization
  • Estimate at Completion (EAC)
  • Estimated to Complete (ETC)
  • Net Multiplier
  • Net Revenue per Technical Staff
  • Net Revenue per Total Staff
  • Overhead before Discretionary Distributions
  • Profit on Net Revenues before Taxes and Distributions
  • Return on Owners’ Equity

Consider which of these metrics truly measure success for your organization, and establish corresponding benchmarks. These can be based on your firm’s historical performance, industry surveys, standards specifically designed for the type of work, your firm’s general philosophy, or a combination of factors. When choosing which organizations against which to benchmark your organization, consider such factors as industry, geography, and size; the more similar they are to you, the more relevant and valid their metrics will be. 

3. Track the data. Once you’ve established which metrics to track, and corresponding benchmarks against which to gauge your firm’s performance, the next step is to start tracking. There are a variety of approaches for doing so, from one-off spreadsheets and workarounds (not recommended) to software packages, including accounting solutions that specifically track financial statistics and project management products that specialize in tracking data on individual projects.

A better alternative, however, is a purpose-built ERP such as Deltek Vision, which connects and organizes data from both the front office (i.e., project) function as well as the back office (accounting). This solution can provide a firm with up-to-the minute, comprehensive visibility into all the metrics listed above. Just as importantly, it serves to optimize oversight of the firm’s projects and staff, and automates a wide variety of essentially manual processes — including Customer Relationship Management (CRM), business development and more. 

Whether you use a combination of software programs or a comprehensive solution like Deltek Vision, the key is to collect metrics on an ongoing basis. 

4. Make data-driven decisions. The last part of the business benchmarking process basically closes the loop. It involves making sure the right data is getting to the people who need to see it in a timely fashion, and that there is a management commitment to using data to make decisions. 

For example, schedule-based metrics can help management determine not only if a project is currently on budget, but if it will finish within the overall budget as well. If the EAC is greater than the overall budget, management may choose to either reduce future expenditures or accept that the project will be over budget, and determine where the slippage occurred (such as failure to send out additional services contracts). Of course, this is just one example; management will have a variety of options and decisions to make, based on the specific metric that is underperforming, and how wide the deviation is from the desired benchmark. 

One of the keys to success in this part of the benchmarking process is ensuring that management has access to all the metrics they need at any given time. There are manual ways to gather and present this information to management, but automated KPI dashboards, one of the customizable features in Deltek Vision, are a much more efficient way to do so. 

The time to start is now

Whatever road you take to identifying and tracking your firm’s benchmarking information, the process will pay dividends as your firm gains a more relevant and up-to-date picture of its performance. Just as significantly, it allows the firm to be proactive rather than reactive in addressing underlying issues before they turn into major problems — thus increasing the probability of project and financial success.  


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