As a growing small or mid-size firm, you need to make some tough decisions about the best way to invest in your company’s future. For many, the instinct is to save costs by sticking with their existing project and accounting systems. But the cost of running your business on disjointed systems can’t be overlooked. When you have one system for project management, another for accounting, yet another for CRM and sales, and still another for payroll, your information is isolated. Most often, these systems don’t integrate, meaning the data can’t be shared. Your team is stuck manually transferring information from one system to another, and back again. And every time you re-enter the data, you introduce the opportunity for error.
Yes, there’s a cost associated to implementing a new project management system. But there’s also a cost to running systems that don’t meet the needs of your business and allow you to achieve your growth goals.
Is your firm ready for a new project management tool?
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So, how do you know if you’re ready for a new system? Here are 5 tell tale signs.
1. Your margins are impacted by inaccurate project costing.
Let’s consider one of the first steps in your project – creating a budget. If you can’t complete the work within the budget provided to your client, it will eat into your margins down the line. The key to crafting a sound budget is basing it on actual historical data. To do this, you need a comprehensive project management system that allows you to easily look back at past project budgets. How much did the project cost? How does that compare to what you budgeted? Which phases or tasks were off budget and why? If your existing systems don’t give you this level of insight, your ability to create achievable budgets for future projects will be limited.
Having an accurate budget is one piece of the puzzle. You also need to ensure that all project costs are being accurately captured and billed against the project. Tracking time and expenses throughout the organization is often one of the biggest pains for project-based firms. The primary reason is that the systems in place aren’t easy to use. So, members of the project team complete their timesheets less frequently, leading to less accurate time entry. It sounds simple, but an easy-to-use system for capturing time and expenses will have your team entering information more often, giving you more accurate project costs.
2. You don’t know if you’ve made money on a project until it’s finished.
When your project and accounting information are in separate systems, it can be challenging to get a clear picture of whether your project is profitable or not. Assessing the current status of work-in-progress (WIP), billed and budget amounts is tricky, especially when there’s an information delay as you transfer data from one system to another. The right project management system will give you real-time updates of your costs and profitability, so you can manage projects proactively, rather than waiting until it’s too late to recoup costs.
3. It takes too long to get invoices sent out to clients.
Once time and expense sheets are submitted and approved by supervisors, most firms get bogged down with work-in-progress processing. Whether you’re running multiple systems or using paper processes, it’s cumbersome and time consuming to review all transactions and determine which ones should be billed in the current period, not billed at all, or held off until a future invoicing date. Then these instructions need to be communicated to your Accounting team, so they can create the invoice and send it off to the client. This process can take days or even weeks. With the right project management system, this process takes a fraction of the time and gives Project Managers total control over billing on their projects.
4. You lack visibility on your resource capacity.
When you have a new opportunity, you need to know if your team has the capacity to take the project on. This can be difficult to assess without a company-wide view of all projects and individual resource commitments. Even if you have a view of ongoing projects, that likely won’t include proposed projects, or overhead time, like holidays and internal projects. Without this level of visibility, you can’t make effective decisions about taking on new projects or expanding your team. Your project management system should give you a complete view of your team’s availability, across projects and down to the individual resource.
5. You don’t have a quick, easy way to assess the performance of your projects or your company.
With data isolated in multiple systems, it can take days to export, compile and format your information into a report that makes sense. And when your systems don’t share data, you’re likely to have duplication across various applications, but the data won’t always line up. Sorting through the different versions to find the “true” data adds another layer of complexity to your reporting. As a business owner, you need to make timely decisions. To do that, you need an integrated system that brings all your data together and gives you answers to your questions at the click of a button.
Do these scenarios sound familiar?
Take our free project management assessment to see just how much your current system is impacting your processes.