What makes an offer too late to be considered?
A few things simply have to be included in an offer. These are:
- General description of the project scope.
- An estimated number of hours each part of the project requires to be completed.
- An outline of specialists and their skills needed to complete the project.
Estimated costs of work and other necessary equipment, as well as the project's final price.
This list may sound simple at first. However, when managers try to develop specific values for each of these steps, they might quickly run out of precious time.
But why does it happen?
What stops you from preparing an offer in minutes?
Imagine a dynamically growing company with around 70 people on board. Typically, their hands are full, but the business is willing to acquire one more project.
Having been provided with a project scope, the managers now have to come up with an offer. However, due to the lack of designated tools (except for old reliable spreadsheets, of course), they:
- do not have any historical data on the duration of similar projects and operations in the past; as a result, they cannot accurately assess the number of hours needed to complete the latest endeavor.
- have problems recalling what skills their employees have. Therefore, they either have to spend hours asking for that information, or they have to base their offer on a gut feeling.
- do not know how many available hours their teams may use for the new project. They do not have a single source of truth about allocations and they have to base their project schedule on assumptions and wishful thinking.
- do not have the information on the exact amount of work each specialist can put in the project. Consequently, they cannot forecast the costs of work right away and are unable to come up with the final price for the operation.
In short, the managers lack a single source of truth, as well as the connections between various elements of their business. As a result, they:
- either need to spend hours merging the spreadsheets, hoping that they made no mistake while doing so,
- or prepare the offer based on their own assumptions and subjective knowledge, hoping their assumptions were correct.
Regardless of the option they choose, they are still facing a process that will take at least a few days of their time. And every second they spend on it puts them farther and farther away from the acquisition of the project…
But preparing an offer used to be easy when we started!
Yes, it certainly was easy - when your company had a few dozens employees at best!
Small companies usually had no problems preparing an offer, as their knowledge of employees, as well as their skills and capacity, is often based on the personal relationships between managers and employees. In a small company, maintaining such connections is easy.
However, with 50, 100 or 200 employees on board, knowing every person, their skills and availability, is simply impossible. As a result, resource management is becoming more and more difficult, causing schedule conflicts and contributing to other mistakes in resource management plan.
How does large companies prepare their offers in just minutes?
They simply use the tools that provide them with an overview of both the talent pool and available capacity of their people.
Large IT service companies - including our customers - have implemented tools that combine resource and skill management with finance management. As a result, they can:
- create estimates for each stage of the project based on the historical data,
- sort their employees by skills to match them with the project,
- check their available capacity and compare it to the project’s needs,
- estimate the costs of work with hourly rates or salaries linked to each of the employees.
Sounds like a dream? Here’s how it can come true.
A bit of uncertainty? No problem!
First, let’s start with the basics - creating a new project in the system. You can do this even if you are not yet certain whether your company will acquire it. Thanks to the tentative project option, you can draft any project without any consequences to the real schedules.
At this point, you can also set a variety of other details for your prospective project, including type of financing, managers, and a chance of the project going live.
Estimating the project scope in Primetric
Having prepared a basic outline for a project, you can now divide it into consecutive stages and estimate the duration of each of them. Later on, you can also add financial information to the forecast to see whether or not the project is even worth your effort in the first place.
Of course, you do not need to calculate the profitability of the project on your own! As you fill the details in the fields shown above, a chart will display below the estimation. It will dynamically change with every value in the table, showing you exactly the costs and profits from a given endeavour.
Should the project be acquired, later on the chart will also include the actual data from the project as it progresses. As a result, you will be able to track both the work and the costs live, without any delays.
Finding the right skills and available people? Just give us a few seconds!
But what if you want to see if you have the right people for the job?
Just a few inches below, you will find a search bar that will help you find that out. Primetric’s customers can use it to sort people bu their skills, experience and capacity to find employees that match their requirements perfectly.
Of course, in this example, the project is still tentative, and managers cannot be sure if it's going to be acquired. In such a case, they do not need to assign specialists to the active allocations; instead, they can use an option to test some soft bookings to see how the business would look like with a new project on board, or simply to test different scenarios.
Flexible drafts and unlimited changes whenever you need them
Of course, you do not need to manage all the allocations separately later on - you can simply use the project’s calendar to do so.
In this feature, you can simply drag and drop each of the allocations to either extend or shorten it. You can also browse all their details and change them, should such a need arise.
Project budget? It’s already here!
And how does these allocations translate to the project budget?
The answer is: automatically!
As soon as you create an allocation, whether a tentative or a permanent one, the information on the costs of work on a given specialist will appear in the Budget tab. There you can find information on all the expenses generated by your employees. You can also add some overheads here to make your budget even more precise!
Of course, just like in case of the initial estimates, the Budget tab will also come in handy after the project starts. With every tracked hour, the system will compare the initial assumptions to the actual data on costs and timesheets, providing you with a comprehensive overview of the work in your project.
Do you want to improve other processes in your business?
It’s not a problem for us!
For a start, we recommend you to read our other articles on similar topics, including:
- managing project costs,
- revenue projection,
- improving the profitability of an IT company,
- preventing cost overrun,
- workforce optimization strategies,
- creating a project schedule.
Alternatively, if you already see yourself using some advanced skill management features in your business, just start a trial with Primetric or book a demo - we will be more than happy to show you how you can benefit from quick offers!