Professional Service Organizations (PSOs) often face a distinct array of challenges to foster success and growth. And predictability is key in ensuring that you meet stakeholder’s expectations to support the goals of your organization. Learn how to create a profitable and predictable business through our top five metrics for success below:
In order to appropriately forecast revenue and boost your Professional Service Organization’s success, you need to have a solid understanding of seasonality and trends. By understanding your revenue types, you can plan and allocate for each service in a manageable way. To do this, you will need to complete the following:
- Form a commitment with your organization top-down to build accurate forecasting
- Forecast at several levels: project, portfolio, resource, and risk
- Become predictable by preparing your organization appropriately for what’s to come and create repeatable patterns
Moreover, to begin forecasting you will need to properly assess employee bandwidth, and ensure frequent communication within your company. You should also establish clear goals and learn from your experiences to improve precision. Also, you should also prioritize your focus to encourage negotiations among stakeholders and remove potential obstacles.
Analyze Your Budgets vs. Actuals
Additionally, you will also want to review your budgeting process and how those numbers compare to actual spending. By crafting metrics, you can forecast accurately to improve this ratio. This is key to make your organization predictable and to ensure projects are aligned to strategic goals. Furthermore, you should also ensure that you have the right people in the right place. By understanding your budget and actuals, you can also improve company capacity and have effective KPIs in place to be on track.
Succeed with Capacity Planning
Ask yourself if you have the resources to meet current demands in your organization and if you can realistically take on more work. Capacity planning enables you to know what you can take on. And it offers you the flexibility to communicate the impact of taking on additional work outside of your scope. Through capacity planning, you are factoring in realistic expectations and actual working hours to appropriately value proposition your employees.
Utilization and Outcomes
Although some organizations are moving away from utilization and looking towards outcomes, it is important to consider if your resources are maximizing their billable time. And if high-value resources are attributed to high-value work. You should account for the following:
- Appropriate resource assignments
- High-level or enterprise-wide planning to maximize utilization
- Differentiated billable and nonbillable hours
Professional Service Organizations and Project Management
Project management is integral for delivering client projects on time and on budget while maintaining your company’s profit margins. Organizations that undervalue project management have reported an average of 50% or more of their projects failing. On the other hand, high-performing organizations that prioritize project management successfully complete 89% of their projects. Making sure to prioritize project management is a key factor in its success.
By manage capacity, forecasting, and establishing efficient project management, your company can become more predictable and attain the backbone to succeed. For a more comprehensive discussion regarding the five-performance metrics, view our most recent webinar below, or contact us for a free business assessment!