Saving Time and Money: Investing Your Two Most Critical Assets in Project Management
The phrase “time is fleeting” has never had more relevance than it does in the 21st century as today’s “C-Suite” executives and their employees confront overwhelming demands on their time.
Time is as critical as money. Yet, many companies are not accustomed to allocating and investing it with the same level of care as they would with more traditional assets. Few executives “get it” that time must be managed, accounted for and invested in ways that maximize return. This is often easier said than done as companies seldom possess the right processes and infrastructure to make the most of time resources.
They often confuse the core business process of time-resource allocation with simple “timesheets” or “time management calendars.” This is as dangerous as confusing a simple check register with a company’s capital investment strategy.
To allocate and manage any resource, it must first be seen clearly and then tracked carefully. Time tracking should be a fundamental part of any business. Almost every business tracks time at some level — even if only for payroll. At the most basic level, some companies employ a simplistic, homegrown system that is based on spreadsheets.
Even companies that have fully automated time-tracking systems may fail to leverage those systems to drive profits up and/or costs down. Leveraging such systems is neither as easy nor as obvious as it seems. Some companies may understand the potential gains associated with managing time as an asset, but lack the right knowledge or tools. Many others succumb to a misinformed and needless distrust of time tracking. Still, others mistakenly believe that time tracking systems are simple, and develop or buy inadequate systems that fail to deliver real value to the entire enterprise.
An expertly developed and finely-tuned time management system can become a window into the real-time costs of any organization, especially if it provides —
- Access and a thorough understanding of costs at every level of the business — at a team level, a task level, a project level, a business unit level and a company level.
- Complete visibility into these costs for everyone in the organization who can impact them.
- Power to redeploy and shift time resource investments to optimize processes, reduce risk, thwart competition, drive revenue, and increase profits.
The benefits of such a system will make the relationship of time and money crystal clear. While identifying costs is nothing new for most companies, many experts agree that traditional cost accounting methods may not yield the right information for some of the most vital initiatives that companies undertake, such as competitive strategy formulation and execution or project portfolio management.
New ways of understanding costs, such as activity-based costing, have emerged to help companies redefine and realign their strategies. Yet these new methods are only as good as the data that feeds them—and time data is a critical input.
Identify Core Processes
To understand time tracking as a core business process, first consider that time data feeds four fundamental business functions:
- Project management
- Business strategy development
It’s important to find a solution provider that addresses all of these functions. Some providers might only manage hourly time with the aim at lowering the cost of payroll by punch rounding, security lockouts, and other techniques. These packages are so well suited for managing payroll, that they are unsuitable for project management or billing automation.
Some providers focus on billing software and are great at automating billing for small companies, but they don’t do payroll or project management. And others focus on great project management but can’t do payroll or billing automation.
The ideal solution should offer the ability to automate time tracking for project management, billing, professional (i.e., salary) payroll, and increasingly, for hourly payroll. This will enable a qualitatively new function: time tracking for strategic analysis.
This will help companies better understand which of their projects generate profits. An important first step is to know whether projects are on schedule or within budget. However, this step alone is not enough. Despite project managers’ keen abilities to remain within schedule and budget constraints, all too often they find themselves out of a job when their projects, product lines or research portfolios are deemed unprofitable or excessively risky. Budgets and schedules alone won’t make a company successful. Only projects that create profits will drive success. All projects, whether internal or external, must somehow drive the company to greater profitability. If they do not, they will be cancelled.
It is critical to constantly monitor projects throughout their lifecycle in order to continue or terminate them. Two questions to ask: “How much of my project’s budgeted time has been spent?” and “How close are we to completion?” will offer some valuable information to make a decision. If you have used thirty percent of the allotted time and you are only ten percent done, that is a red flag. However, it’s better to have that red flag raised when you have spent thirty percent of your money rather than eighty percent.
The companies that manage their portfolios of internal and external projects skillfully — ensuring that all projects help the company make money — will be the companies who survive and succeed in both good times and bad. The hard truth is that no company can afford to mismanage its project portfolio. Whether that portfolio contains two or two-hundred projects, the goal remains the same: profit.
To reach this goal, companies need to be smarter about how they collect and use critical time data to evaluate project cost and performance; allocate labor and other resources; and estimate future project schedules and costs. They can reduce risk of failure by understanding the true costs of their project in real time, and by taking necessary action sooner when the chances of success are greater.
The right time data, accessible in real-time, is critical to solving project management problems.
Don’t forget to leave your comments below.
Curt Finch is the CEO of Journyx. Since 1996, Journyx has remained committed to helping customers intelligently invest their time and resources to achieve per-person, per-project profitability. Curt earned a Bachelor of Science degree in Computer Science from Virginia Tech in 1987. As a software programmer fixing bugs for IBM in the early ‘90’s, Curt Finch found that tracking the time it took to fix each bug revealed the per-bug profitability. Curt knew that this concept of using time-tracking data to determine project profitability was a winning idea and something that companies were not doing – yet… Curt created the world’s first web-based timesheet application and the foundation for the current Journyx product offerings in 1997. Curt is an avid speaker and writer. Learn more about Curt at http://journyx.com/company/curtfinch.html.