5 Planning Mistakes That Cost Your Company Thousands of Dollars

Let’s face it: planning is a huge and complicated task. Like any other operation of such complexity, planning can lead to mistakes—but in this case, they might cost thousands of dollars. Fortunately, not all of those expensive errors are elusive - and all of them can be solved. Here’s how.

Arkadiusz Terpiłowski

Co-Founder

Resource Planning

28/6/2024

Table of contents

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Mistake 1: Simple Tasks Assigned To Experienced Employees

Time is money - but for experienced employees, it is much more precious. Despite that, they often end up assigned to simple tasks that could be completed by their less skilled - and cheaper - colleagues. With that scenario repeating          , your company may soon feel its negative impact on the morale and budget. 

Experienced employees’ wages should reflect the complexity of their tasks; otherwise, part of their compensation simply goes to waste. At the same time, it also increases the costs of a given operation, putting it at risk of becoming unprofitable. 

Importantly, such a situation might be a symptom of a much deeper problem: the lack of balance in the senior-to-junior ratio. This can lead to many significant issues, with the main ones being: 

  • Excessive spending and high turnover rates for companies assigning senior employees to mundane tasks. 
  • Numerous errors, delays, and performance problems for firms with too many junior employees.

Mistake 2: Flat Rates For Broad Range of Services 

Not all services are created equal, and some deserve higher compensation. Managers might not always acknowledge it - and it is often reflected in the poor financial performance of their projects. 

When complex projects or actions can easily grow out of proportion, choosing a flat rate instead of more flexible billing types leaves professional services companies with little room for changes. In business, change is inevitable yet sometimes unexpected - and, in the case of rigid billing types, it can also be costly, as companies using them might be forced to cover the costs of additional work. 

Mistake 3: Rest Is Out of the Question (and the Plan)

A perfect, 100% utilization is only possible for robots. In the case of people,  working 8 hours a day is unrealistic - and yet that’s often the amount of project work managers expect them to complete. And wrongly so. 

Overestimating the capabilities of teams and individual employees is the main source of project delays and problems. Operations will not be finished on time with too many tasks and too few hours. Such setbacks can be reflected not only in the project's performance but also in turnover rates and customer satisfaction. 

Mistake 4: Too Low Price Cap - And Too Few Hours 

Some projects seem too easy, and that notion predestines them to be billed as fixed prices. When made with overconfident assumptions or incorrect estimates, that choice can be reflected by the profit margin - or rather, the lack of it. 

Of course, setting a fixed price for a project is not always a mistake. For repetitive projects that have been completed successfully numerous times before, a clearly defined price might even add value for prospective customers. 

However, new projects are prone to scope creep, additional changes, or the sudden evolution of the initial concept. As such, it is hard to put a price cap on them, as it might then either drastically limit the amount of work that can be done or force the company to contribute to the project for free, causing thousands of dollars in losses in the process. 

Mistake 5: Unavailable People in Urgent Projects 

Some projects seem so desirable that many managers would not oppose bending reality to the customer’s expectations to please them. Still, some resources cannot be created with a switch flip - even though oversimplified planning tools may make it seem so. 

With a single overbooking, one can put an additional load on the shoulders of the employee, who is often left to manage the crisis themselves, resorting to overtime. That affects not only the morale of the team but also the state of the projects that might soon be left with no specialists to complete it. 

Perfect Your Planning, Improve Your Profits 

Naturally, a single change in your planning won’t fix all those problems - but changing one tool will. 

In Primetric, you can draft, test, and create plans in just a few minutes by: 

  • Using our skill management module to find available employees with the right skills. 
  • Eliminating any mistakes - our notification system will inform you about them all. 
  • Calculate planned work costs to ensure the project stays within the desired budget. 

But don’t take our word for it—book a demo with Primetric and see our tool's capabilities for yourself. 

Arkadiusz Terpiłowski

Co-Founder

Arkadiusz is Head of Growth and Co-founder at Primetric. Prior to that, Arkadiusz was at the helm of his own software development company where he oversaw operations. A great enthusiast of process improvements, his personal mission is to make software companies more profitable and efficient on their path to growth.

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