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Better invoicing rate with a functional resourcing process

Tuomas Mikkola from Silverbucket hold a presentation “The tools of project organizations”. Tuomas has 20 years of experience in project business so he has gained some insightful perspective and ideas on the matter. This article is based on the content of the presentation. You can watch the presentation from here (only in Finnish). 

We claim that it is possible to raise the invoicing rate with a functional resourcing process. Maybe even double it! In this article, we will introduce the arguments behind the statement (based on the presentation). 

Let’s start by asking that do you know what is the typical visibility to the resources of a project organization? Usually, it is vague and blurred. Like when you are trying to see the tail lights of a car in front of you in a foggy weather. 

Sumuauto

Nonetheless, project managers know precisely how their projects are doing, who are in it and what kind of insufficiencies are there regarding skills or time management. Also team managers know how their teams are doing. However, the organization’s top and middle management don’t have any centralized view to the overall resourcing situation. The data is often in different various spreasheets all over the organization – in the project plans of project managers or team managers’ excels. The data is not available on a rough level to be viewed at. This is very concerning as the top management makes the biggest decisions in the organization. In the end, it is the top management that decides about recruitment, negotiation of using externals or possible staff reduction consultations. Unfortunately, these decisions are often made a bit late or they can be utterly wrong without a clear visibility to the overall resource situation.

There should be one joint repository where the resourcing data is managed and maintained. Then also the top management will detect the possible conflicts or challenges in beforehand, such as under or overload situations, and is able to make better decisions that are based on facts. When there is time to react to these kinds of conflicts, the outcome can be very different. If a certain group is underloaded, it is possible for example to start target-oriented sales procedures or to start development projects instead of staff reduction consultations.

The rough level view to the overall resourcing situation is not enough though, there should be a possibility to drill down to more specific details. Even though the big picture looks optimal, the truth can be different on the lower level – for example between units or locations. Hence, it is important to have the possibility to drill down and see the lower levels as well.

How to succeed in resource management then? You need to know how to play ”the resourcing Tetris”. In the presentation resourcing is compared to playing Tetris where falling blocks are like changes in the resourcing world: projects are starting and ending or the employees are changing (newcomers and leavers). The blocks are falling faster and faster and if the process is nonfunctional, there is less time to react to the changes and the tetris grid ends up having many empty spaces. However when the process is solid and there are adequate tools, there is also more time to react to the falling blocks. In order to succeed, the Tetris blocks should be combined tightly together.
Resu tetris

Caption: When the Tetris grid is tighter, the utilization rate is higher meaning that the invoicing rate is also higher. 

With joint rules everyone plays the game in the same way meaning that the distribution of information stays solid and the resourcing decisions are fair for both resources and the organization. The person who is the loudest doesn’t always win but a process is created which enables fair procedures. Joint repository offers means to avoid shouting or whispering to others’ ears. Instead, resourcing is made with transparent means utilizing a functional tool. With a tool it is possible to find free resources for example filtered by skills. This way you can find the most suitable resource for a project.

The organization should have only one truth. This means having clear rules which everyone obeys. It should be clear where the resource information and changes are documented. Most of the resourcing decisions should be done in the lower levels but sometimes escalation is needed in the resourcing process and some decisions have to be done by the top management. When the process is functional and works well, the resources are optimized in a better way. It is also easier to find resources to new projects, which contributes to the increase of invoicing rate and profitability.

07/04/2018

strategic-decision-making blog
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