Oh, The Places You’ll Miss: How Time Management Can Uncover Opportunity
It’s a thought that is common to nearly every project manager who completes a project, and foremost in the minds of those who fail: “What could I have done better?” It’s an important question, because in this age of highly advanced companies with razor-thin margins of error, “good enough” really doesn’t exist anymore.
If you are not capitalizing on the opportunities available to you, the odds are that you will be overrun by those companies that do. Fortunately, it is not difficult to see where these potential profit areas exist; it just takes a little forethought. Let’s take a look at some important areas where you can uncover opportunities to make more money and save more time and, hey, who doesn’t want that?
Rally Your Troops
To the project manager, resources means both the people available to work on a project and the material, software, etc. that will be used to complete it. The resources are what make a project possible. Their correct allocation determines the budget for the project, the profit margin, and the number of people who will work on it. Obviously, it is incredibly important to know exactly what resources are available, and when, in order to successfully set budgets and deadlines. However, in practice, that data can be surprisingly hard to find.
Instituting an automated time and project management system allows project managers to view exactly where resources are employed, what hours employees have available, and when they will be able (or unable) to work on a project. For instance, if a key employee is going on vacation to Bermuda and won’t be able to work on the project for the duration of his visit, this is critical information to know. Gaining this information weeks before he goes on the trip will be much better than a few days before he is set to contribute. Similarly, if a resource is allocated to too many projects it will reduce his efficacy or make progress impossible. Whether you are discussing man-hours or material production, overextending resources can result in a major depreciation of project value. On the other hand, knowing who and what is available allows you to keep things running smoothly and ultimately maximize each project’s profitability.
Give Them Time
Having employees track time to individual projects allows managers to view exactly how efficient people are at particular tasks, and where the project stands as a whole. Viewing this information on a daily basis provides the insight on when it’s wise to reallocate individuals to other areas where they are most profitable. It also allows managers to view project completion as an ongoing event rather than a set series of checkpoints. That way, if projects go off-schedule or resources are being used too quickly, it is easy to make minor corrections immediately rather than waiting for a real issue to emerge. Automated time tracking solutions can be set to require time entry at whatever rate is most convenient for managers, and this information can be viewed by approvers who can determine if time is being spent effectively. Using such a system usually results in immediate benefits for the entire project team.
Estimate the Viability of it
Estimates are the first step in determining project viability. Over or under-bidding means a loss in profit, either through project delays or loss of opportunity to pursue other projects. That being said, it is never possible to make an estimate with 100% accuracy — there are too many opportunities for error, ranging from massive to microscopic, when a team of human beings is put together with finite resources and told to make something happen. However, this does not mean that estimates cannot be very good guesses. How is this possible? Building up a backlog of project data from every project that a company attempts will allow for future estimates to get increasingly better. The more diverse that recorded projects are, the more adaptable that data will become. Note that this means every project attempted, not every project completed. Failed projects can be just as valuable in aiding future estimates as projects that were successful.
Let’s take a closer look… Overbidding on a project means that you won’t get the work in the first place, because the potential customer will give it to your competitor at a cheaper price. Underbidding, however, means you will win the deal and lose money. Neither situation is acceptable for businesses today, and yet most companies do a poor job in this area. One way to make more precise bids is to use a key performance indicator, which is a tool used to measure progress towards a strategic business goal. For example, the number you want to minimize in this situation is defined by the formula [(E-A)/E], where:
- E = estimated hours to complete the project
- A = actual hours spent to complete the project
It is important to keep this KPI value as close to zero as possible, which indicates that you are bidding on projects more accurately.
Just tracking this number is a great first step towards better bidding, and you can get the necessary data to calculate it from any timesheet system, including a paper one. Automated timesheet systems, however, are generally even more effective in this area because they often have reports to calculate the KPI figure for you.
Improving adherence to your estimate can be difficult for some companies until they understand the ratio concept described above. You’ll have to determine your company’s magic number, but once you’ve got your own ratio for specification to total project length, you can use it again and again.
Obviously, these are just a few of the ways that businesses can uncover hidden opportunity in their projects, yet they are also powerful and simple enough to implement right away. Paying attention to these three important areas of resources, time, and estimates will produce more successful projects that also maximize profitability. Shaving down margins of error and engaging with hidden opportunity is not only important in the current business climate, it’s required.
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