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Author: Curt Finch

From Idea to Realization: A Crucial Step You’re Definitely Missing

Why do your best laid plans often go unfulfilled? You have put the right people in the right jobs, empowered them to achieve, drafted an excellent plan and have the necessary buy-in and funding. Yet somehow deliverables are still late and over budget, making for a poor return on investment.

The fact is, knowing the path and walking the path are not the same thing. For example, many of us know how to lose weight (exercise, eat better, etc.) Yet knowing how to lose weight and actually losing it are two totally different things. Likewise, knowing what needs to happen to execute a project successfully and actually executing it are different things. The latter is much harder.

The following is a true story. I happen to know one of the principals involved very well. The names have been withheld to protect the guilty.

The Big Project in a Big Ditch

A multimillion dollar consulting project for a major government agency was in trouble. The big league consulting firm was called to account, and in a panic, they called in their biggest gun to get the project back on track.

Mr. Big Gun walked in and said, “Show me your project plan.” Out came the giant Microsoft Project Gantt chart with hundreds of tasks and complex dependencies. He pointed to a task that was scheduled to begin the next day – it was assigned to “Software Engineer 7”.

“Who is ‘Software Engineer 7’?”

Nobody knew.

“Okay, that’s your first problem. Question two: I see you actually have a real person, Fred Silverman, assigned to this other task, and he is working on it right now. Does he agree with the estimate for that task’s timeline?”

Nobody knew.

“That’s your second problem. How much effort has Fred put towards completing that task?”

Nobody knew.

“Strike three! Now, was that so hard?”

The CIO of the client said, “Get this man on the contract immediately.”

You Can Either Be The Big Gun Or Look Down Its Barrel

The big gun in this story is a little abrasive, as big guns often are, but the three questions he asked are often where projects go wrong. Let’s look at the questions one at a time.

1. Be Specific in Your Resource Assignment

Who’s working on it? “Software Engineer #7” never accomplished anything. Large project plans can span for multiple years, so it is reasonable to put placeholders in for people who have not been hired yet. Once you get within a month of the start date, however, you’d better know who’s going to work on each task. Not only that, but if you know, it should be in the plan so everyone else knows too. What will happen if your chosen resource is not written into the plan, doesn’t know what he’s working on and, consequently, hasn’t told his boss what he’s working on? He could get transferred, assigned to another project or booked to several, making him unavailable when you need him. That will cause your big project to slip, killing the ROI, angering the customer or both.

For smaller projects – projects that are to be completed within one budgetary cycle – you really ought to be assigning real people to tasks wherever possible.

2. Get the Right Estimated Time-to-Task Completion

Nobody really knows how long it is going to take to complete most tasks until somebody sits down and starts working on them. The more experienced at the work you are, the better your estimate is likely to be. I’ve written millions of lines of software, so I’m pretty good at estimating how long it will take me to do it. Ask me how long it will take me to replace a curtain rod or a spark plug, and I usually won’t factor in the time it will take to fix all of my screw-ups.

If you have a real person, Sally, working on a task on your project, and she’s been working on it for a few hours, now is the time to ask her how long she thinks it will take to complete it. Then go update your project file with her new estimate. Do that often on all the tasks people are currently working on, and you’ll find out about problems long before Mr. Big Gun gets called in.

3. Per-Task Effort Tracking

Is anyone actually working on these tasks at all? Are they only 20% complete when 80% of the budget has been spent?

Nobody likes filling out timesheets, but let’s face it, you have to track per-task effort in some way in order to avoid any nasty surprises. That time data is beneficial in more ways than one – later on, you can use it for improving your project estimation techniques.

Who’s the Big Gun Now?

Successfully executing your projects is not as hard as it seems, as long as you approach it the right way. Keeping tabs on who you have assigned to tasks, how long it should reasonably take them to complete the tasks and how much effort they are making are the three key components to avoiding trouble in the long run. Once you get those down, you will be able to execute your projects with ease, making your company successful and your customers happy.

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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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Managing Project Risk – The Easy Way

Question: How can you spot profitability leaks and cost overruns in technology projects before your peers – and then fix them?

Answer: You can do it the hard way or the easy way. The path you choose depends to some degree on the consequences of failure and your budget.

The Hard Way

Standard risk assessment methodology requires you to first identify threats – human, operational, “reputational,” financial, technical, political, etc. Then, you have to come up with an estimate of likelihood for all those different threats and invent early warning systems that will notify you to launch your backup plans for each one.

That sounds really hard, especially for small businesses with constrained resources.

Most of the projects I’ve been involved with would have been finished before we could have identified, estimated and planned for all of those risks. If your project is extremely large and complicated, that kind of planning probably makes sense. If, however, you’re hoping to get your next project delivered in the next six months or so, then there is an easier way.

An Easy Way Out

My company recently received survey responses from about 250 customers, many of whom were small to medium sized services companies that sell to other businesses. These are companies like software consultancies, management consultancies and marketing firms. A portion of the questionnaire inquired about estimating project risk. Customers responded that about 12 percent of projects were broken, late or otherwise in the ditch.

The best way to measure that risk is to track employee time spent on projects, while simultaneously estimating how much of the project is complete. If the project budget is 1,000 person-hours and 50 percent (i.e. 500 hours) is used up — but the project is only 15 percent complete — then you know you have a high risk project, and a big problem.

Conversely, if the same project is 40 percent complete, but only 10 percent of the hours are used, then you have a low-risk project.

If you have real-time, accurate, per-project cost data available to your entire management team at all times, it provides a built-in alert system that notifies you early on that your project is broken. 

Now that you’ve detected the problem much earlier than you otherwise would have, you can take corrective action. You’ve discovered a hidden problem earlier than your peer managers who are not tracking time could have. Now, you can fix the problem more quickly and cheaply.

But, are out-of-control projects really common problems in small businesses?

Survey Says: You Have Out-of-Control Projects

You may have heard the statistic that 70 percent of technology projects are out of control, over budget or broken. However, our customers reported a lower number – 12 percent. That means 12 percent of our customers’ projects are broken in some way, shape or form.

If you have 100 people doing hundreds of projects with a $10 million budget, and 12 percent of their work is a waste of time, that’s $1.2 million a year wasted, right? That’s bad. It’s not nearly as bad, however, as the 70 percent failure rate other companies are experiencing based on the above statistic. Somewhere between 12 and 70 percent of IT workers are wasting money, time – even their life’s work. Life is short enough. Let’s not waste it, right?

Sometimes, when you find out a project is broken, you can do something about it – like cancel it, put different resources on it, or change the scope. But sometimes you can’t. In our customers’ cases, they could fix the problem 55 percent of the time. Fortunately, 55 percent of our customers’ projects were rescued, primarily because they had accurate cost data – accurate time data – which allowed them to find the problem early.

It is worth a lot – in time and money – to have this capability. You can be more confident that you are tracking the right data; and time sheets are not onerous to complete. 

If your projects are short-lived or technical, or if they’re based mostly on human labor or knowledge work, then tracking employee time is probably all you’ll ever need in terms of risk management. 

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Five Common-Sense Time Management Mistakes In Project Accounting (and Tips to Avoid Them!)

Chances are you’re quite familiar with project accounting, and you understand how financial reports that track the financial progress of projects can be used by managers to aid project management. Project accounting gives businesses insight into the comparative value of current and past projects, as well as the projected value for future endeavors. However, if project accounting is approached primarily from the top down, these estimates may be flawed. Project knowledge must be granular, and individual team members should contribute and review that information on a per-person level to determine its accuracy.

Unfortunately, it is often the case that businesses implementing a project accounting system, even if done with the goal of tracking individual time and resources to projects, might run into a snag: team members just do not have the time, desire, or know-how to accurately account for activities and expenditures. This doesn’t mean they’re lazy. In fact, the most productive team members may be the worst at documenting their activities since they might view any time not spent actively completing the project as wasted time. 

Following are the top five most common mistakes made in project accounting, and the best ways to make sure you avoid them and stay on track.

1. “Tracking time is a waste of time!”

Unlike many decades ago when traditional manufacturing and farming were the predominant industries and employers, most of us today are knowledge workers, dealing in numbers and information. Whereas in the past, profitability could be measured by comparing the cost of individual components to the profit of that completed product, now the product that knowledge workers provide is their knowledge and expertise. Therefore, time itself because a critical piece of data to measure. It is necessary to know the relative worth of your people’s time, as well as their expenditure of that resource, to get a clear insight into costs relative to budget. 

Further, it is important to know where exactly a project stands in relation to the approved schedule. If, for instance, it is determined that a project has used 80% of its resources but is only 50% complete, a reevaluation of resource distribution is in order. To enable this level of control, project team members should track time and resources individually to a project. This will highlight larger trends, and allow you to make micro-corrections as necessary. 

2. “Any System Will Do The Trick!”

One of the biggest benefits of tracking time to projects is the backlog of specific data that it provides. Project managers can review previous information on both successful projects and those that ended in failure to make accurate forecasts for future projects. A poorly configured system can cause significant problems if data is lost or misapplied. 

If it is difficult to enter data, the system will not be successful. Employees may submit simplistic, incomplete information to just be done with it. Time data has to be easy to enter, retrieve, and view. When selecting a system, look for ones that allow anytime, anywhere entry screens so employees can always access information. Also, check the reporting capabilities of potential software. These reports should be easily understandable and available to any authorized individual in an organization so information can be shared.

3. “That Doesn’t Count.”

The old Boy Scout motto of “Be Prepared” applies perfectly to project accounting. It is necessary to have insight into both what is happening and what will not be happening. There will be times when unpredictable expenses arise. A time management system can help mitigate these surprises. 

If a system allows employees to schedule vacations in advance, then it will be no surprise when a key resource takes two weeks off in the middle of a project to go out of town. If no one realized the vacation was coming up, it could jeopardize the completion of a project. You need to see all expenses relative to the budget, even if they are not directly related to the project itself. These can include travel expenses, facilities maintenance, and even meals provided to a hard-working team that has to stay late!

4. “I’m Sure They’ll Figure It Out.”

There is a fine line with any software between complexity and sufficiency. Too simple, and the data won’t be of much use. Too complex, and users will have difficulty inputting or interpreting it. That’s why it is important to make the system simple on the front-end, yet robust internally. 

An automated system that accounts for the human element will greatly enhance the availability and value of time data. Issuing daily or weekly reminders for entry data safeguards against common entry errors and will reduce the time necessary to “clean” project data. It will also provide insight into ongoing projects. Determine who should approve the data and then make sure that the timesheet gets filled out every time by using built-in system reminders. By automating these tasks, you will save time and ensure the quality and consistency of time data.

5. “We’re All Set For The Next Decade!”

Employees should be able to see the benefit of spending extra time entering analytic data. There is nothing more frustrating to knowledge workers than feeling like their time is wasted on unnecessary bureaucratic actions that are initially extolled by higher-ups but later abandoned, simply becoming a pointless recurring action. Failure to review and act on data totally undermines the rationale behind implementing a time-tracking system in the first place. 

Without consistent application of time data to business operations, a company will leak money and resources unnecessarily. Keep your system up to date and well-monitored so actionable metrics are only a click away. When possible, discuss relevant data used to make decisions with employees so that they will understand the rationale behind any “game-changing” decisions from above.

Time, money, and resources need to be precisely applied in order to achieve the best results in any project setting. Fortunately, the tools exist to make the determination of that amount relatively simple. This common-sense approach can make the entry and application of project data seamless and simple.

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Key Performance Indicators; How to Use Them for Project Success

Companies that sell services to other businesses-project management, data management, software development or IT consultancies, for example-often track time in order to automate invoicing, but they may be overlooking the other benefits these systems can provide. Real-time access to relevant Key Performance Indicators (KPIs) such as ‘percent billable’ and ‘completed vs. estimated’ can give early warnings of project problems and lead your company to faster growth and more profitability. I would first like to explain what KPIs are, and then show you how to use some simple ones to improve your business or rate of project success that can be calculated from any time and data labor source.

A key performance indicator is ‘key,’ which means that your KPI has to be one of a very few things that you are measuring which you believe will make a huge difference to your business long-term. In other words, a KPI measures progress toward a strategic goal. If you have 100 KPIs, then you’re not going to be able to use any of them to drive organizational behavior because your company doesn’t have 100 strategic goals. Ten KPIs can be effective, five KPIs are better, and one KPI is ideal.

Related Article: Measuring Project Success Using Business KPIs

A Quantifiable Indicator. A KPI must be measurable. “Make customers more successful” is not an effective KPI without some way to measure the success of your customers. “Be the most convenient drugstore” won’t work either if there is no way to measure convenience. It is also important for KPI definitions to remain stable from year to year. For a KPI of “increase utilization rates,” you need to address considerations like whether to measure by hours or by dollars.

Performance Measurement. KPIs are used to measure the performance of a project or organization, frequently through activities such as performance improvement derived from training, labor utilization rates, or customer satisfaction. KPIs are often tied to strategy through techniques such as the Balanced Scorecard, but they don’t have to be as complicated as that to be useful and effective. As with most things, simplicity increases efficacy.

KPIs can differ depending on strategy. They help an organization to measure progress towards their organizational goals, such as increased penetration of existing customers or markets, on-time delivery or reduced scope creep.

A KPI is part of a ‘SMART’ goal-one that is Specific, Measurable, Achievable, Relevant, and Time-based-which is made up of a direction, KPI, target and time frame. An example of this would be to “increase average revenue per sale to $10,000 by January.” In this case, ‘average revenue per sale’ is the KPI. The aforementioned goal wouldn’t be SMART if it wasn’t achievable, if the word ‘January’ was left out, or if was not relevant, e.g. if this was a portion of the organization that had nothing to do with sales or marketing, like HR.

Simple, Useful KPIs

Billability (often termed ‘utilization rate’) is the percentage of time in a given period during which employees are working in a revenue-producing capacity. You must configure your timesheet system to track whether or not work on a project is considered billable to the customer. Once you have this information, utilization for any period, group or person is found by the formula B divided by T, where:

B = billable hours for the employee/group in the period

T = all hours worked for the employee/group in the period

Most organizations try to keep their utilization rate above 70% or so. The higher, the better, until you’ve reached a point where administrative tasks that are necessary to the business or specific project (like tracking time) are not getting accomplished. Then you know you’ve pushed it too far.

Adherence to Estimate. Customers do not like it when you underbid, but you won’t win the business if you overbid. Many consultancies do a poor job in this area. The KPI you want to minimize here is defined by the formula [(E-A)/E] where:

E = estimated hours to complete project

A = actual hours used to complete project

Just tracking this KPI is a good start, and you can get the data to calculate it from any timesheet system, even paper ones. Automated systems, however, often have reports to calculate it for you. Improving this number can be difficult for some companies until they understand a simple truth-that similar projects often have a strikingly similar ratio of early phase cost to overall project cost.

The early phases of a project are usually referred to as the ‘requirements,’ ‘design,’ or ‘specification’ phases, depending on what your consultancy is doing. If you find that after carefully tracking time on a batch of similar projects, the first two phases usually take about 10% of the total project time, you can use that data to predict the length of future projects.

The following diagram shows how tracking the time it takes to complete a project helps in planning future projects. By tracking time and subsequently learning that the first two phases of Projects 1 and 2 took 10% of all project time to complete, the projected length of Project 3 becomes easy to determine. If the first two phases of Project 3 take 1.8 months to complete, you can estimate that the entire project will be completed in 18 months. This project estimation technique has proven itself to be extremely accurate for similar projects in a variety of companies.

Percentage of Projects Profitable is a KPI that can really affect your business in a positive way. As an analogy, consider a Journyx customer, British Petroleum (BP), and their experiences in drilling for oil. They created a strategic vision for their company which they termed ‘no dry holes’. Drilling for oil and not finding it is expensive. Rather than trying to make up for all the dry holes by finding an occasional gusher, BP decided to try to never have a dry hole in the first place. Changing the attitude that dry holes were an inevitable cost of doing business fundamentally changed their culture in very positive ways.

Project management and other consultancies also have dry holes: projects which lose money for the company. Due to an inadequate understanding of costs, many of these go unnoticed. If you set a strategic goal for your company of ‘no unprofitable projects,’ it will change the nature of discussions in your business.

For example, it empowers frontline employees to legitimately push back when a project is being taken on for political reasons. Conversely, having the attitude that the winners will make up for the losers doesn’t do this. Getting direct per-project cost data from a timesheet system is easy. Correctly applying indirect data (such as sales or accounting time) to the direct costs is a bit more complicated. Connecting all of this to revenue data gives you per-project profitability. Once you have that data, you can work on your KPI of ‘percentage of profitable projects’ and try to maximize it. The formula for this KPI for a given time period (usually a quarter or a year) is:

# of profitable projects / # of projects

You should seek to maximize this number. Even if you are willing to lose money on a few strategic projects in order to enter a certain market, you should determine how many you’re willing to do that on, and keep your losses around that area reasonable.


These are three examples of KPIs that you may find useful, with information on how to calculate them. None of these requires an automated system (although that dramatically lowers the effort of data collection). Other KPIs that could be useful are ‘calendar time to complete a job’ (because overhead costs increase substantially due to all the status communication problems when there are delays), ‘percentage of customers satisfied’ and ‘time to complete initial free estimate.’ Any of these may be right for your business once you’ve chosen a strategy, but a strategy without metrics won’t get you very far. KPIs are the answer.

Curt Finch is the CEO of Journyx (, a provider of Web-based software located in Austin, Texas, that tracks time and project accounting solutions to guide customers to per-person, per-project profitability. Journyx has thousands of customers worldwide and is the first and only company to establish Per Person/Per Project Profitability (P5), a proprietary process that enables customers to gather and analyze information to discover profit opportunities. In 1997, Curt created the world’s first Internet-based timesheet application – the foundation for the current Journyx product offering. Curt is an avid speaker and author, and recently published All Your Money Won’t Another Minute Buy: Valuing Time as a Business Resource.