We're fortunate enough to have had the opportunity to work with and learn from some of the best-performing project-based companies in the world.
What we’ve realised from working with them is that they don’t leave profitability to chance. They implement certain processes, monitor certain metrics and train their people to think commercially in everything they do.
There are two pieces of good news.
The first piece of good news is these processes, metrics and habits aren’t difficult to develop.
The second piece of good news is, rather than write the world's longest blog post on this vast topic, instead we've handily summarized what a well-run, profit-focussed professional services company does.
So, without further ado, a highly profitable professional services company:
- Quotes accurately and consistently, typically using templates for different types of work and updates those templates regularly based on lessons learnt
- Defines the scope of their projects very clearly alongside the quote they provide. For example, they don't just say "project review meetings" they say "10 x 30-minute project review meetings"
- Identifies clients or project types that tend to go over-budget and add contingencies into their budgets where possible
- Ensures their staff are very clear on how long they've got to do their part of the project and have a clear path for raising concerns if at any point they think they’ll run over
- Ensures their project managers continuously monitor budget vs actuals throughout their projects and take timely, corrective action when needed
- Ensures their people flag things up if they think it goes beyond the scope of what was agreed in the quote. This helps them to go back to the client for extra fees should scope-creep cause the project to go over budget
- Reviews projects upon completion to see if (a) they were successful for the client and (b) it was delivered within budget. If not, they investigate why to see what lessons can be learned e.g., update budget templates for future projects, close a gap in the scope definition, etc.
- Senior management periodically review the profitability of projects from different angles - such as by type, sector, client etc - to see if any are more/less profitable than others
That might seem like a lot, but it’s incredibly effective. Engaging staff at all levels to take an interest in profitable service delivery works wonders.