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A KPI, or Key Performance Indicator, is a measurable value that demonstrates how effectively a company is achieving crucial business objectives. Organizations should use KPIs to evaluate their success at reaching targeted goals. Simply stated, KPIs provide your firm with metrics that compare budgeted amounts to the actual values. KPIs are no longer just for accounting and finance as they now reach deeper into a firm’s operational side examining marketing, business development and project management.

KPIs vs Traditional Reporting Methods 

Let’s take a look at how firms benefit from KPIs and how KPIs differ from standard reporting. A common reporting technique is to compare current profit & loss results to the same period the previous year, or to compare year to date then versus year to date for the current year. Budget data for one or both comparisons can be incorporated. Now, what if we graphed this information and included a desired growth line? We will then have a visual of actual performance in relation to a chosen measurement. This measurement will inherently become an indication of whether we are achieving our goals, and would allow us to be proactive in correcting potential challenges. 

Using KPIs to Measure Success 

As mentioned earlier, KPIs are not just a tool for the finance team. For example, a chief operating officer may not relate well to traditional financial statements and focusing on project related metrics would be more to his liking. These indicators can be project specific, relate to a grouping of projects, or be sliced and diced based on the organizational breakdown structure (OBS) or work breakdown structure (WBS). Click here to learn more about OBS and WBS.

In another scenario, a chief strategy officer believes there is a benefit from evaluating trending data regarding hit rates filtered by a predetermined criterion. However, we must keep in mind that unless a benchmark or some other distinguished metric is established, this may not result in a clear and meaningful measurement. 

Here are two examples of KPIs that have proven to be successful: 

1. Cost and Schedule Variance – Using Deltek Vision reporting, actual project cost performance index (CPI) and schedule performance index (SPI) is calculated and compared to an acceptable mean-variance.
2. Estimate at Completion (EAC) Analysis – This can be as simple as a two-column report showing EAC in comparison to the contract value. The criteria can also be set by contract type to “flag” anomalies that need to be further investigated. 

The Bottom-line on KPIs 

KPIs can be used company wide. C-level executives can look across client and project types and evaluate revenue multipliers or collections success. These same evaluations can be done at all levels across your enterprise from managers that are accountable for sections of your organization down to individual project managers driving the lowest levels of WBS. What is required is a benchmark, a budget or a goal. Whether top down or bottom up, the view into why businesses perform the way they do will kept top of mind.

So, how does your firm measure success across the enterprise? Is it profit centers, projects, employees or pursuits? Every firm is unique and can’t just use “off the shelf” KPIs. It all begins with a discussion of what you need to drive your firm to the finish line. Once decided, designing the reports and data is easy.

In a previous blog, we reviewed multi-company functionality in Deltek Vision and learned how it serves as a tool for sharing and accounting for resources across the companies within an enterprise. Cross charge capabilities in Vision are based on similar theories as multi-company, but are focused on the interaction within a company and its organizational breakdown structure (OBS). Before we dive deeper, here are some links to blogs about multi-company functionality and OBS in case you are unfamiliar with these topics.

High Level Insight into Cross Charge in Deltek Vision 

By default, Vision is built to be project centric, which simply means that the process of entering and posting timesheets determines where the labor charges are assigned. If the cross charge process is not configured or run, the cost will remain on the “books” of the organization where the project is assigned. 

Why Use Cross Charge? 

As financial and operational managers, we must always remember that revenue can only be earned once and a cost incurred once. For this reason, cross charge allows businesses to move these elements in and out of various “buckets” within their organization. When a combined income statement is run, all cross charge entries will zero out and the original revenue and cost will remain. 

The cross charge process is used when firms loan and borrow labor at the lowest OBS level, which could be: 

• Office
• Department
• Discipline
• Market Sector 

A good example is a civil engineer where projects live in the various disciplines. The survey department would loan their staff to the engineering projects and cross charge would be the financial component to drive and manage the accounting for the labor. 

There are two internal pricing options to choose from when configuring cross charge: 

1. Project Centric – This is when labor remains on the books of the organization where the project resides. A multiplier is then used to account for some portion of operational/overhead (OH) costs. This factor could be limited to a fringe benefit rate, could represent a breakeven OH rate or even include some profit. The purpose is to ensure that the loaning organization has an incentive to keep their staff busy, but they also need to be careful as to not over extend their resources. 

2. Employee Centric – This works by adjusting labor back to the employee’s organization. Using typical billing rates, although a multiplier can be used, the revenue is moved from the projects to the employee’s organization. The purpose again is to ensure the loaning organization doesn’t lose the ability to show a profit by sharing their staff. 

Real-life Application of Cross Charge in Deltek Vision 

Here is a success story where the operational process and projects are built on the premise that fee and scope drives work breakdown structure (WBS) in a clients’ Deltek Vision database. Under this model, high accountability becomes the first option where phases and tasks within a project are assigned to different organizations based on the portion of the work. Employees then charge the phase/task that is assigned to the organization they “live” in. This results in more closely managed projects because the profit accountability is shifted back to the organization supplying the labor. This process eliminates the need for cross charge. 

But wait…realizing that in order to run successful projects, there is a necessity to anticipate unplanned needs. This means that the firm must have the ability to borrow an employee from another department for a short-term assignment or a last minute need. For example, the base building studio decides it needs input from the interiors studio. In this scenario, the client falls back on the project centric method noted above as a mechanism to facilitate resource sharing and not impede project progress. Furthermore, this is a prime example of a need for cross charge. 

Gain Control of Resources with Cross Charge 

Whether your current OBS is solid or you are considering a change, cross charge can provide the functionality required to ensure an open and smooth process of resource sharing. With a thorough understanding and effective implementation, cross charge can provide another dimension in managing your business.

Johnnie Cochran once said, “If it doesn’t fit, you must acquit!” Well the same idea is applicable to purchasing an Enterprise Resource Planning (ERP) solution for any business. Sure, QuickBooks and Microsoft Dynamics are good for certain types of business, but neither one are designed specifically to support project based businesses. To support this idea, the following infographic will serve as evidence to make the case that Deltek Vision is the best option for project-based firms.  

Are you thinking about needing a new accounting system or ERP? If your firm is still on Deltek Advantage, Sema4, or FMS or even on Quickbooks, Protrax or another system, you might be evaluating options to figure out which solution is right for you. We receive questions from prospects asking about the differences between Deltek Vision and some other product. Additionally, during our conversations over the years, we have heard many myths about Deltek Vision and we thought it was time to set the record straight, as we see it.

To start, what we have found is some software providers say they have a feature, but the quality and capabilities are completely different. Some people might say we are biased. You know what, we probably are, but for good reason:

1. We use the product we sell. We know Deltek Vision inside and out. Can our competitors say that? Ask them.
2. We aren’t just sales people. We care about the success of our clients and that’s not just rhetoric. We’d rather turn a sale away then have an unhappy client.
3. We have done extensive migrations of all kinds of software. What we have found is many of our competitor’s software are done on the cheap or just completely leave out industry standard capabilities.

Below are the top 4 Deltek Vision myths:

Myth #1 - Deltek Vision is only for large firms.

Fact #1 – The numbers don’t support this claim. As a Deltek Premier Partner, the majority of the firms we serve are under 50 employees. Of those firms on Deltek Vision, 57% are under 50 employees; 33% are 25 employees or under; and 17% are 15 employees and under. Most importantly, the size of your firm should have no bearing on the solution you choose. What is more important is choosing a solution that fits your staff’s needs, the information you need to make business decisions and your firm’s growth plans. Deltek Vision fits firms of any size. Additionally, in 2012, Deltek came out with a cloud option (SaaS) for Deltek Vision that made Vision simpler to deploy at a lower entry price for any size firm. Check out this 10-person firm’s story.

Myth #2 – Deltek Vision is so expensive. 

Fact #2 - A recent 20-person firm looking at another AE ERP product was surprised to find that Deltek Vision’s cloud software option was less expensive. In fact, Deltek Vision has had a very comparable software pricing for small firms ever since the SaaS option became available. Additionally, the basic package of Deltek Vision’s SaaS offering includes 5 users of CRM for marketing and business developers and 5 users of Resource Planning for operations. The choice for us seems simple. For about the same price you get a much more robust system with Deltek Vision. Where the differences in pricing may come is with the services that are provided. Here are some key items to keep in mind when receiving an implementation quote to ensure you are getting the same level of service: 

1. Does the quote include migration? Our experts have been doing migrations for almost 30 years and we are proud to say we probably have some of the best in the business. When it comes to migrating your data, we highly recommend importing your historical data. The level of import can vary, but it’s important to make sure you are comparing apples to apples. Will bringing over the beginning balances be enough? This is only a question you can answer, but our experience has been firms rarely want this option unless that is their only option. Do you really want to lose all of your historical information?  
2. This is more than a transaction. You are not just buying software, you are buying a solution that needs to address the specific capabilities your firm’s needs. More importantly, you are buying into a relationship. From our perspective, we aim to make sure the software is the right fit. If it isn’t Deltek Vision, then we will raise our hand and tell you. That is why we take a consultative sales approach and conduct a discovery to uncover what is working well and identify if there are bottlenecks or inefficiencies that could help you improve your business. The discovery process should identify the output needed. More specifically, what data (reports, alerts, dashboards, etc.) is needed to make business decisions? These specific capabilities should drive what you are looking for. Make sure you are talking to a consultant during the process, not just a sales person and take time to establish a relationship. We are here to help you today and tomorrow as your firm grows. 

Myth #3 - Vision is complicated. 

Fact #3 – This fact is easily debatable. Driving a stick shift is difficult for some people, but for others it is simple. So the word itself is relative. We argue that Vision is not complicated, but rather it’s scalable. What can’t be debated is that Deltek Vision is great for growing businesses. Businesses are constantly changing and no one has a magic ball to predict when these changes will occur. Here are some key points to keep in mind if you are a growing firm looking for a new solution: 

1. Firm Evolution - Should your firm have different contract work types; need to expand your business; or face evolutionary life cycle challenges, like ownership transition and retirement scenarios, Deltek Vision can easily accommodate growing firms. It has all the utilities, under the hood to handle these contingencies.
2. Acquisitions – Should you acquire a new firm, all of the data can be accommodated in Deltek Vision. The same cannot be said about our AE ERP competitors. In fact, in addition to a push button conversion for Advantage users, Full Sail Partners has created push button conversion tool for Ajera. Additionally, we have a very streamlined process and economical migration price for Quickbooks. The same cannot be said of our AE ERP competitors. Because Deltek Vision has the ability to create custom fields, tabs, grids, and User Defined Info Centers (UDIC), all data can be represented. To put it simply, Deltek Vision can represent all data from other databases. However, if a firm was on Deltek Vision and tried to migrate to our competitor’s software, you would in fact lose data.

Myth #4 – Other AE ERP Solutions have the same capabilities as Deltek Vision.

Fact #4 – The differences between Deltek Vision and other AE ERP software are vast and go beyond just multi-currency capabilities. Here is a breakdown of some of those differences: 

1. Audit Trail - Deltek Vision has an audit trail. When changes are made in Deltek Vision, all changes are tracked and you know who made the change and when. This is not only important from an accounting perspective, but very important for firms that have government compliance requirements.
2. Multi-Company - If this capability is needed, Deltek Vision allows the set-up of multiple companies including reporting with a single sign-in. One financial report can be run to see how each company is doing. Other solutions have tried to resolve this issue on the cheap by creating separate database instances requiring multiple logins. Keep in mind, you will not be able to share financial reporting for all companies and there is no automated Inter-company billing process, therefore, each company reporting is separate.
3. CRM - If this capability is needed, Deltek Vision has an integrated, seamless CRM and proposal automation module that has a single sign-in. Additionally, Deltek Vision integrates into other marketing tools, including Constant Contact, MailChimp and Hubspot. Other AE ERP solutions may integrate with other CRM solutions. Because of that you will have a separate system that requires two separate logins. The process is far from seamless and none of them integrate with other marketing tools.
4. Security – Deltek Vision provides the ability to lock down any field in the system and make it read only. Unfortunately, security in other AE ERP solutions are not as robust as Deltek Vision.
5. Built-in Capabilities – Deltek Vision contains tools that provide flexibility and allows users to streamline processes and clean up data on the fly without any programming knowledge. Because of the open architecture, the system is built to grow with your firm. Here are some examples of some of the built-in capabilities that can be utilized:
   • Custom Fields – Deltek Vision provides the ability to create user defined fields, tabs, grids and info centers as your firm sees fit. As your firm grows, you may need to track further information.
   • Workflows – Deltek Vision provides the ability to streamline processes through workflows. For example, sometimes data needs to be represented in two locations. However, you never want to a have dual entry process. In Vision, you can have data entered into one location and the data flows to the other location. View this webinar, to learn more about the power of workflows.
   • Utilities – Vision has built-in utilities to handle contingencies to easily clean-up and move data without a migration or custom expert.  
     • Need to move billed time to a new phase? There’s a button for that.
     • Need to combine two clients together? There’s a simple to use conversion tool to do that in seconds.
     • Need to move data from one location to another? There’s search and replace utility that is simple to use.
     • Have more than 999 projects and need to add another digit to your project number structure? There’s key formats for that.

Choosing the Right ERP 

Finding the right ERP solution for your business is not an easy process and is full of misguided information. Therefore, asking the right questions is imperative to get clear answers. Formulate your questions based on the needs of your firm. Then find out and compare how each ERP solution manages these requirements. Make sure there is substance. Those shiny features might just be an illusion to distract you from the lack of robust capabilities. Some AE ERP solutions try to act like Vision, but they don’t perform like Deltek Vision.  

For project-based firms, timesheets are essential to ensure that an employee’s time is reflected to a specific project. I’m sure you already knew this, but do you manage timesheets correctly in Deltek Vision? Here are some facts and best practices for different scenarios to help you better manage timesheets in Deltek Vision.

Intro to Timesheets in Deltek Vision

Hopefully, one of the first things your Deltek Vision Consultant explained to you about timekeeping is that timesheets create payroll cost not payroll. As a “nuts and bolts” accountant, at least one side of our brain struggles with processing this information. So let’s break it down: 

1. The employee’s job cost rate on the accounting tab of their info center should represent their rate of pay. If they are true hourly, this is quite easy to determine. On the other hand, if they are salaried the hourly rate should reflect their annual salary divided by 2080 hours.
2. If adjusted salary job costing is used, the amount should reflect their salary based on the configured interval. For example, weekly, biweekly or a set number of days.

How Timesheets Work

When a timesheet is posted an amount based on the hourly rate multiplied by the hours charged is applied to the selected projects. Thereby creating direct or indirect (overhead) labor/payroll cost in the General Ledger. The credit created by the timesheet can go to either one of two places: 

1. The Income Statement as job cost or payroll variance - This account is an overhead line item used to adjust the total of the timesheet posting to the actual payroll distributed. Furthermore, amounts that remain in this account after the payroll journal entry has been entered reflect a net of uncompensated overtime (OT) for salary staff (negative amounts), and based on this process, the premium portion of OT for hourly staff (positive amounts).
2. The Balance Sheet as a payroll liability - After the payroll journal entry has been entered, the remaining amount needs to be reclassified to the Income Statement as stated above.

Accounting Tip for Paid Time Off

Have you ever noticed your Paid Time Off (PTO) balance not being relieved even during peak vacation periods? You might want to consider booking PTO taken to the Balance Sheet. To do this, you need to configure timesheet postings for PTO to go to a PTO liability account. Then when time off is taken and posted, the debit entry reduces the liability. Based on a true computed liability, an entry can be made on a pre-determined interval to accrue additional PTO and book the expense. If you are using benefit accruals in Vision, the entry can be taken from that report.

Handling Leave without Pay

Many firms fail to account for leave without pay (LWOP) properly. Sure, there is a need to track hours for statutory purposes when employees are on leave, however, no payroll cost should be recorded. The simple fix is to enable cost rate tables and attach one to LWOP projects. The table should contain either a labor code(s) or a list of employees with a ZERO job cost rate. This will override the employees default job cost rate and avoid any recording of payroll costs.

Punch the Clock

Some of this might seem complicated at first, but these best practices should help keep your books in order. I hope that this has taken the mystery out of Deltek Vision timesheets. Now punch the clock and update your timesheets.

Often times, upper management views the proposal process as a “cost of business” and don’t put forth a concerted effort to control proposal related costs. There are several ways to increase the cost-effectiveness of your proposal process, and starting with a bid/no bid process is the first step.

Did you know that 40% of AE firms have no formal bid/no bid process? This is according to the 36^th Annual Deltek Clarity AE Report. For that reason, I’m going to focus on the importance of the bid/no bid process. More specifically, why the decision can be made during any phase of the proposal process. 

Notification of New Opportunity

Full Sail Partners, a Premier Partner for Deltek and the Client Feedback Tool, is pleased to announce the hire of Amy Balassone in the role of Direct Marketing Associate. In this role, Amy will work with the marketing and sales team to communicate the value of Deltek Vision to the professional services industry. With more than 12 years of customer service, sales, and marketing experience, Amy will conduct market research on management consulting firms to extend the Full Sail Partners brand beyond the AE industry.

“What has impressed me most about the company is their customer service and dedication to their clients, “ says Amy Balassone, Direct Marketing Associate. “I feel privileged to be a part of a company that takes a consultative sales approach to ensure prospects are the right fit for the software. That customer focused mentality is what makes this company great and easy to work for.”

Amy will support the company’s growth goals and provides the firm with the brand awareness development experience needed for Full Sail Partners to help project-based firms develop their systems and processes.

“Amy’s tenacious, yet easy-going personality combines the right touch needed to target new verticals,” said Sarah Gonnella, Full Sail Partners’ Vice President of Marketing and Sales. “We are extremely honored to have Amy join our team. What is most impressive about Amy is her drive and resourcefulness. Her varied experience with marketing and sales along with her previous experience in the Navy as a data systems technician brought the right mix for this position.”

How did your firm perform last year? Did you do better than the prior year? I’m sure the majority, if not all AEC firms, evaluate their performance in comparison to prior years, but do they evaluate how they performed against similar firms within their industry? Fortunately, the Deltek AE Clarity Report provides unique insights into the AEC industry that make an accurate comparison possible.

Each year, Deltek working in conjunction with ACEC, ACEC Canada, and SMPS, conducts an industry study that draws from over 250,000 data points provided by more than 350 US and Canadian firms of all sizes. This one of a kind study provides real insight into the AEC industry to enable firm leaders to make strategic decisions to increase their competitiveness and help their firm’s growth. As part of this study, Deltek takes an in-depth look and analyzes participants’ financial condition and market outlook, including:

• Operating Profit
• Net Labor Multiplier
• Staff Growth Rates
• Backlog
• Utilization Rate
• Net Revenue Per Employee
• Current Ratio
• Other Key Financial Metrics

Real Results Your AEC Firm Needs to Know

Prior results from AE Clarity Reports provided industry-specific insights about the most profitable trends in the AEC industry. Some key findings from the 36^th Deltek AE Clarity Report were:

• Firms that work on water, wastewater, and storm water projects, expect their work in the market to grow by 59%, the highest percentage of all surveyed markets. Additionally, markets in which more than half of respondents work in expect their business to grow. These include commercial sector respondents who expect a 58% increase, roads and bridges markets with an increase of 57%, and surveying and GIS sector with an increase of 55%.
• Markets in which respondents are least optimistic for growth are public facilities with an increase of 38.4%, the hospitality sector with an increase of 38.5%, and a 45.4% increase in the residential sector. Nonetheless, these are still encouraging numbers!                                                                                                                                                        
• AE firm leaders reported that the top three factors influencing the success of their companies are the right people, which was cited by 75.7% of respondents, long-term relationships with clients was by cited by 74.7%, and 65.5% of respondents said their firm reputation influenced their firm’s growth. How does client retention affect your profits? Learn the formula to calculate this here!
• There’s even more positive news in last year’s AE Clarity Report. Of the AE firms that participated in the survey, they responded that they had a proposal win rate of nearly 50%. Further positive news is that 42.9% of respondents reported that their win rate has increased either slightly or significantly in the past two years. On the other hand, 12.3% reported that they experienced a drop in their win rate during the same period.
• The top choices for business development responsibility were the executive team that drove 84.7% of their efforts and project managers who drove 68.6% of the business development efforts. One might suspect this comes from developing meaningful relationships with existing clients.
• Overall, about 60% of AE firms said they employ a go/no-go process in at least some situations. Of these, 29.2% said the employ process for all opportunities, and 30.6% for specific cases, especially “strategic” opportunities.
• Top ranked project management challenges included accurate project cost forecasting, and difficulties with collaboration and communication. On the other hand, one statistic showed that 75% of projects were currently on or under budget for the majority or survey respondents.

So how did your firm stack up against these results from the 36^th Deltek AE Clarity Report?

What’s New in the 37^th Annual Deltek AE Clarity Report?

Great question! But just as important, what do you do with this information? Learn what Deltek experts think and how they use this information at an upcoming AE Clarity Tour stop near you. The 37^th Annual AE Clarity Report will be out soon!

Full Sail Partners and Planifi announced their recently formed strategic partnership. This alliance brings together Full Sail Partners’ world-class consulting services with Planifi’s industry-leading resource planning software “Project Analyzer” to provide architecture and engineering firms with a better way to manage their resources.

Project Analyzer is a visual resource planning software that enables project managers to quickly schedule, budget and staff projects. This graphic project management tool empowers firms to improve project planning by focusing on predictable and profitable delivery.

“We are excited to introduce Project Analyzer to our clients,” said Scott Seal, Full Sail Partners’ Vice President of Consulting. “We believe that Project Analyzer aligns with our core principals of helping professional services firms improve their business processes. Our clients will benefit from the increased visibility needed to make informed decisions around firm staffing, performance and revenue forecasts.”

Additionally, Michael Kessler, Principal Consultant at Full Sail Partners who successfully helps firms implement and utilize resource planning said, "I am looking forward to offering a powerful new planning solution to our customers. The reporting capabilities of Project Analyzer have been on my clients’ wish list for years."

This partnership will focus on enabling architecture and engineering firms to center their business on the project performance analytics that support better decision making by project managers and firm executives.

“This is a big day for Planifi,” said Tom Vandervort, Planifi founder. “This partnership will enable a whole new group of architecture and engineering firms to choose Planifi for their resource planning needs. Customers will benefit from the ability to select the solution that best works for them, all guided by Full Sail Partners’ expertise. Planifi customers will also benefit; as we are now able to offer enhanced consulting capabilities and solutions to our customers through Full Sail Partners.”