Embracing Project Management in Scientific and Engineering Consulting Firms
The start of a decade is a promising time. It welcomes fresh thinking and new approaches for achieving goals. It’s the moment to let go of what doesn’t work and evolve and improve what does.
As we look back at the 2010s and what’s ahead in the next decade, one thing is clear: To grow, technical consultancies must win and keep clients while operating each engagement at profitability.
In fact, according to industry analysts, the pace of innovation and increasingly aggressive competition over the next decade will make profitable growth more challenging than ever before. Analysts predict clients’ demands for even higher value coupled with little appetite for higher rates or more billable hours will put profitability at even greater stake.
Fortunately, technology and systematic approaches to help drive profitable growth are accessible, even for small firms. Plus, the firms adopting these approaches are seeing measurable gains.
Formal Project Management Mitigates Risk, Drives Profitability
As I talk to scientists, engineers and other professionals all over the world leading growth-focused technical consulting businesses, I hear a common frustration about the time, effort and resources necessary to manage projects profitably.
The adoption of formal project management tools and concepts is arguably the foundation to build profitable growth. Yet, smaller firms are resistant. They often don’t see long-term value and view the training and adoption as an unnecessary and risky resource drain.
But let’s dig into that idea of risk.
Every time your firm takes on a project, you assume risk. When you don’t manage projects with the right tools and best project management practices, you heighten risk, not mitigate it. Here’s how: Allocating your resources to the most appropriate (read: profitable) projects and services ultimately determines success—or failure—for your firm.
The good news is that if you’re delivering projects, you likely already use some aspects of formal project management methodologies. Even better, you can leverage greater operational and financial benefits from more formalized project management without long and complicated training and certifications.
This is where technology is your friend. With a basic understanding of the concepts that can address your most significant challenges, a flexible and technology-focused approach to project management can quickly help you efficiently bring on more clients and grow profitably.
The Real and Practical Benefits of Formalizing Your Project Management
The overall benefit of formal project management concepts and tools comes down to efficiency—the efficient use of resources. A formal approach efficiently manages resources through the entire project lifecycle, from proposal to close, so you can significantly increase utilization, deliver projects faster and increase the overall quality of your firm’s offerings, which creates an opportunity for more business.
Adopting project management best practices means optimizing output through streamlined processes—saving time, fully leveraging resources and maximizing profit. When you do this, you control risk and efficiently manage projects from end to end
Here’s a closer look at some of the benefits.
1. More Accurate Estimates
One of the first steps in managing client projects is also one of the most critical to profitability: the project estimate. So, how do you get it right?
Many projects fail because firms take on too much. They regularly underestimate time and cost because one or more significant components of the work have been overlooked or undervalued in the estimate. One way to avoid this is to use the work breakdown structure (WBS), a standard project management concept that gets granular about project deliverables. Even a basic WBS reduces underbidding and avoids unbillable hours.
The underlying idea of a WBS is to subdivide complex activities into their most manageable units by:
- Asking and understanding what will have to be done to accomplish X.
- Breaking down the answer into tasks that cannot be subdivided further.
- Estimating how long it will take to complete these tasks and how much they will cost in dollars and person-hours.
The process gives you an estimate of how many people—with what skills—you’ll need for the project. You’ll also have a good idea of how long the project will take.
Reviewing historical information from past projects is helpful in this process. To collect the information, many small firms rely on spreadsheets. While spreadsheets are a good start, they can quickly get unwieldy and are often stored in siloed file systems throughout the firm. So, without many hours of time-consuming work, there’s a lot of historical data you could be missing.
Project management software can give the process an efficiency boost. With quick access to the historical information you need, you can easily develop highly accurate cost estimates that are informed by previous work. And that means better accuracy and consistency regardless of who creates the estimate.
Once the project closes, some software tools can also assess the impact of the project on your bottom line, driving continuous improvements in your estimating process for more consistently profitable projects.
2. Greater Accountability and Control
When it’s unclear why projects are over budget or behind schedule—and who is responsible—your team lacks accountability and the project manager can’t make effective improvements.
This is where the concept of project governance can help. Project governance is the structured system of rules and processes used to administer projects. It gives you a decision-making framework to ensure accountability and alignment of the project team.
Within the project governance structure, project managers can define the reporting system, outlining specific rules and responsibilities for everyone involved in the project. An effective project governance structure also helps outline a project reporting system, including specific roles and responsibilities. Project managers can leverage a governance structure to help with setting project priorities that align with the overall goals of the firm—with an eye toward profitability.
Project management software can also help with greater accountability and control through analytics that provide insights to establish or refine project governance and apply resources for optimal results.
3. A Better Way to Manage Problems and Changes
While the goal is always to execute projects according to a well-thought-out plan, the reality is you simply can’t avoid unexpected issues on projects. Change (whether in the form of formal project extensions, exceptions, plan tweaks, or simple ad hoc) is inevitable at any stage. What’s critical, though, is effectively managing the change to keep the project on track—and on budget.
The change control process in a formal project management approach ensures each change proposed in a project is adequately defined, reviewed and approved before implemented. Without a change control process as part of a formal project management approach, resolution of unexpected issues falls on the judgement of the project manager. Consequently, how the problem is handled—and how successfully—is variable.
When you standardize and better control the way your team reacts to and implements changes, you speed up successful resolution and reduce risk. Project management software that includes reporting and analytics can further help you prepare for and manage these inevitable changes.
4. Happier Employees
Team morale attributes to project success in no small measure. Project managers can become frustrated by their team’s inability to meet client project requirements or deliver profitability to the firm. At the same time, team members must be engaged and motivated to deliver optimal results.
When all team members are productive and happy, projects thrive. A formal project management approach and central project management platform help solve this by reducing risk and increasing project success.
Taking steps to formalize your firm’s project management approach will have measurable positive effects, and adoption of formal project management doesn’t have to be disruptive. In fact, when getting started implementing these systems and tools, I always recommend small steps to establish benchmarks and organizational buy-in.
Start small, measure the impact and refine and improve as you go. Software designed with highly technical consulting firms like yours in mind, customizable for the way you do business is a smart consideration. We’ve found through working with our environmental and scientific consulting clients that the least disruptive and most fruitful approach is to focus on tools that address task management, project governance and change controls first.
We’d be happy to share with you details of successful rollouts of EVX customers and the benefits they’ve realized. We partner with firms like yours to first understand specific needs, help solve existing challenges, measure results, then work together to expand processes and technology as needed for increasing impact on profitability.
To learn more, contact us.