Any consulting organization is familiar with the Triple Constraint. It defines the three inherent constraints of managing projects:
Cost – the resources needed for the project (including labour, expenses, etc.)
Scope – the spread of work to be done on the project
Time – the amount of time you need to deliver the project
Throughout your project, if you adjust one of these factors, it will inevitably affect the other two.
For example, if your client wants to lower the cost, they’ll have to trim activities from the scope of work, which will also reduce the amount of time required for the project. On the flip side, if your client wants to add new items to the scope, both cost and time will increase.
You’ll notice that quality is in the center of triangle, as it’s dependent on each of the other three constraints. Your goal is always to maintain a consistent level of quality, so as one side of the triangle is adjusted throughout the project, the others need to adjust accordingly.
This model helps your project managers understand the impact of trade-offs on other aspects of the project so they can identify which compromises will keep the project on-track toward success.
Manage Time, Cost and Scope with Professional Services Automation
It’s a delicate balancing act, but it doesn’t have to be complicated. Here are a few ways a Professional Services Automation (PSA) solution helps you keep your eye on the ball and make more effective adjustments throughout your projects.
Plan Project Scope and Activities
Scope creep is one of the biggest worries for any project manager – it has an instant impact on both timeline and cost. Creating a detailed statement of work is critical, but it’s equally important to outline a step-by-step plan to keep your team on track. Look for project management software that includes project planning and scheduling, so you have one place to manage the work being done. For example, NetSuite PSA offers a flexible work breakdown structure to accommodate larger multi-level projects or short, simple ones. Interactive Gantt charts give you a clear visual of the plan that you can adjust as changes arise and see the impact on your timeline and budget. You also have visibility into resource availability to manage capacity and utilization effectively across all projects.
Track Project Work as It Occurs
If you’re tracking time in one system and managing project work in another, it’s tough to get a clear picture on your progress. A PSA solution pulls these two critical functions into one system. It’s easy for your team to enter time directly against project tasks and your project managers get instant visibility into progress. They can see where tasks are running over budget and what the impact is on the project costs. This allows you to adjust accordingly to mitigate overruns on the project overall – that simply isn’t possible with a stand-alone project management tool.
Monitor Project Costs in Real-time
That leads us to cost tracking. Changes in timeline or scope (through change orders) will inevitably impact cost. If your accounting functions are handled in a separate system from your projects, this becomes much more challenging to manage effectively. As we touched on above, PSA lets you see the real-time cost impact of work performed and changes made to scope or timeline. Having your project and financial data in one system moves you from reactive to proactive management, helping you control project risks and maximize profit. Not to mention when you give your team easy-to-use tools for time and expense tracking, your costs become more accurate, helping you reduce leakage and bill more accurately.
PSA vs. Project Management Software – Which One Do You Need?
While you could default to a basic project management tool to plan your projects and track progress, a PSA solution boosts efficiency and gives you greater visibility. The key here is connecting your teams. Your project delivery team captures information that’s critical for your accounting team – time and expenses. If these two functions are disconnected in separate systems, you’ll be forced to do some sort of reconciliation, which adds manual effort. Not only is this inefficient, but it increases the chance of error which can affect billing accuracy and timeliness. Depending how clumsy these processes are, the impact on your bottom line can be significant. The question is, can you afford to take that hit?