Because of the COVID-19 pandemic, revenues for the IT Consulting industry went down by 0.1% in 2020, resulting in unexpected challenges and business risks. However, the IT firms that became flexible, embraced new project management trends, and adapted their operations to meet the demands of the current market, managed to keep their losses to a bare minimum. So what are these project management trends that are shaping IT consulting and how can you use them to propel your business growth? Let’s find out.
- Tracking billable hours
- Moving to PSA software
- Focusing on capacity planning and resource demand
- Using AI for resource allocation
- Embracing hybrid methodologies
- Giving thumbs down to e-mailing
#1 Tracking billable hours
A recent survey by Hubspot says that only 58% of agencies measure their utilization rates. But since there is a direct link between billable hours and company profit, tracking them is becoming increasingly popular. In short, billable hours, also known as billable work or billable time, represent all the hours a person spends working on the tasks that are directly linked to the client’s project. All the remaining hours spent on things like administrative work or lunch breaks add to the overall non-billable time. To measure this billable vs. non-billable hours ratio, project managers calculate their teams’ utilization rates and write utilization reports, explicitly demonstrating how much time gets spent on billable work.
These utilization reports are particularly relevant for IT consulting companies: they show if your company is generating enough revenue with its current resource pool. It is also a great way to measure performance and productivity among your teams: is efficiency a constant or a fair-weather friend? By monitoring their utilization rate, IT consulting businesses can both predict a decline in their revenue and ensure its increase by tweaking the rate. Ironically, creating a utilization report is a sure way to increase your non-billable time and decrease the utilization rate which, in its own right, negatively impacts company revenues. To cut that problem loose, an overwhelming number of companies are implementing professional services automation (PSA) tools and get their utilization reports automatically generated in a matter of seconds. This is what the report looks like in Forecast.
#2 Moving to PSA software
In 2017, SPI Research conducted a survey to see what improvements PSA software can bring to professional services firms. According to their findings, the companies that made a shift to advanced technology experienced higher resource utilization rates, lower project cancellation rates, and improved on-time and on-budget delivery. Even more than that, this study concluded that the return on investment, ROI, is noticeably high for automation-driven firms with around 172 employees: with only $200,000 in PSA software investments, they can get almost $23 million in increased revenue.
What is PSA software then and what can it automate, along with the utilization report? In its essence, PSA is a full-suite platform that simplifies project management, time tracking, business intelligence, resource management, finance & billing, and collaboration. On top of that, many companies decide to move to PSA software because it increases predictability, reduces budget leaks, gives full data visibility, reduces administrative work, and enhances customer satisfaction. In a nutshell, a PSA solution turns chaos into order: all of your project data will be stored and processed within a single platform, which is why this option is particularly relevant for IT consulting companies with all the projects they might have in progress at the same time.
#3 Focusing on capacity planning and resource demand
Resource management is a sore spot at IT firms: consultants name it as the reason for their leaving their jobs fairly regularly. According to Gallup, in the USA alone, 70% of employees are not working to their full potential, which translates into slower economic growth both for the company and for the country in general. This is why many eyes are getting turned to capacity management.
After all, hiring new people to meet capacity demand is not always the best option — today more than ever, project managers need to solve that resource puzzle by juggling their resources like nobody's business. The good news is that there are lots of tried and tested practices that make capacity planning and resource management easier. For instance, there is the option to use tentative bookings. In simple terms, a tentative booking is there for you to hold someone’s availability on specific dates in the calendar. As it is “tentative”, the booking is not yet fixed or confirmed, but it will be easier for you to manage resources efficiently when you know all the possible booking scenarios.
For the project to go by the book, capacity planning is a must. It means that you need to determine if you have enough resources for all projects early on. However, capacity planning is not just about assigning people based on their availability. In fact, this is the mistake many project managers still make and then soon enough see their projects fail. Proper capacity planning also needs to account for people’s expertise. This is where resource management tools come to the rescue: they will give you a simple overview of all team members, their roles and availability within one interface.
#4 Using AI for resource allocation
Along with reducing manual work and simplifying planning processes, IT consultancies also strive to cut the non-billable hours they spend on resource allocation by onboarding AI solutions. Even if you spend hours or days trying to polish your project resource allocation strategy, there will still be that human error that can wreak havoc on all your plans. Not to mention all the factors that can get overlooked when allocating resources. This is why using AI-driven technology to perfect the process is becoming a staple among IT consultancy firms.
What can a resource allocation tool do for you? For starters, it can give you access to a simple Heatmap with an overview of the team, their roles, and current booking status: do they still have some free time to work on your project or are they already looking at potential all-nighters? Here is what a Heatmap usually looks like.
On top of that, the resource allocation tools of the highest calibre will also give you the option to use Auto Schedule. In a matter of seconds, the smart algorithm will automatically match your relevant resources to tasks, while accounting for their skills, availability, and the amount of time they might need to complete specific tasks. Below you can see how that Auto Schedule magic works.
#5 Embracing hybrid methodologies
The ultimate project management mantra says that being agile is paramount for successful project completion. In their recent study called “The Drivers of Agility”, the PMI found that companies demonstrating a high degree of agility bring considerably more projects to the finish line. On top of that, 68% of the surveyed leading firms said they use agile methods, 71% rely on predictive methods, while 72% said they embrace hybrid approaches. After all, accommodating the rapidly changing project environments takes fast decisions and great flexibility.
How do hybrid models work for IT consultancy firms? With a hybrid approach, you can implement sprint iterations with fluid deliverables, while using the waterfall methodology in case you also need to come up with more solid deliverables. With more than one methodology on the table, the perks you get to enjoy will also be numerous. This means that the Waterfall principles will help you make your project planning more defined and tangible, while the Agile principles will make your project execution phase agile and adaptable. On top of that, you can foster new levels of communication among team members, managers, and project sponsors.
#6 Giving thumbs down to e-mailing
The end of the email era is drawing near as more project management companies offer integrations with tools like Slack, Salesforce Chatter, and Yammer. Although some might think that there is nothing wrong with e-mailing, it is actually a major time killer in disguise for one simple reason: it is incredibly messy. Suppose you are discussing a new project with the client and there are several people in the conversation, all of them add their line to the discussion — and you end up with a scroll for the King of the South. You can also forget about inviting new people into the conversation and accept the fact that you might well send your e-mail to the wrong person altogether.
Things get much simpler with specialized tools for team communication like Slack, more so if they can integrate with your project management solution. For example, with the Slack & Forecast tandem, you will get project notifications from Forecast directly into your Slack and learn about the updates that get introduced into the project. All you need to do is connect each project with a specific channel in your Slack Workspace and get ready to receive relevant notifications. You will always know it right away if the team finalizes some part of the project or moves a task from “in progress” to “done.”
With the pandemic no longer being breaking news, more and more businesses are navigating their way back into success, with the latest IT trends showing them the way. To be ahead of the pack even in times of uncertainty, try managing your projects with Forecast and discovering how technology can simplify and upgrade all business processes.