What is the professional services project life cycle?
Professional service life cycle is a comprehensive process that is capable of accurately reflecting the complexity of modern product development. It is generally used in companies specializing in delivering bespoke solutions, especially the digital ones.
In contrast to project life cycle, professional services life cycle does not focus exclusively on the product or a service itself. In fact, its main interest is the collaboration between parties involved in the production process. As such, professional services life cycle is capable of delivering more accurate products tailored to the needs of the customer.
Professional services life cycle and IT industry
We already know what professional services project life cycle is - but what does it have to do with the IT industry?
Everything, in fact!
Professional services project life cycle is a perfect representation of processes you may already know from the Agile methodology. In other words, such a pattern is capable of facilitating sprints, repeatable actions, as well as regular milestones.
Importantly, such a cycle includes a few more things that are vital for the modern IT industry - learning loops, feedback and constant improvement. With recurrent rhythm set by Agile methodology, the improved cycle makes some room for discussion, eliminating common mistakes, improving the processes and giving companies a competitive advantage.
Professional service life cycle vs project life cycle: what’s the difference?
Professional service life cycle and project life cycle have a lot in common, but their meaning is all about their differences. Below you can see how they compare with each other.
Standard project life cycle
Standard project life cycle and its 5 phases remained unchanged throughout the years. As a result, some industries consider it to be too simple to match their needs.
Traditionally, the project life cycle included stages such as:
- initiation phase,
- planning phase,
- execution phase,
- monitoring phase,
- closing phase.
As you can already see, it does not include any repetitive stages and it assumes that a project can only be moved forward - there’s no going back, correcting mistakes and, above all, learning from the entire project. In other words, such a cycle is of no help for team members or project managers.
As a result, with the sudden growth of digital services, it became obvious that it no longer reflects the complexity of innovative products - and that’s when professional services life cycle has emerged.
Modern professional services project life cycle
Project life cycle has evolved in the last few years to respond to expectations of service providers in particular, and it no longer has only 5 phases. Still, its main goal is to ensure project success and support both the project managers and team members.
Today, companies no longer focus on delivery of services themselves, although this is their ultimate goal in the end. Now, to create bespoke software tailored to the customer’s needs, they are much more interested in constant improvement, seamless cooperation and efficient communication. Additionally, in some cases, long-lasting services that can be maintained for decades.
Professional services project life cycle - phases
The modern professional services project life cycle includes many more factors valued by IT companies, such as:
- personal touch and bespoke features,
- instant responses to any arising issues,
- constant communication,
- flexibility and ability to change.
There is one additional phase of the project, as the process includes:
- sales phase,
- planning phase,
- delivery and improvement phase (also known as execution phase),
- accounting phase,
- analysis phase,
- maintenance phase.
As a result, professional services life cycle is a perfect option for the IT industry and any other companies specializing in providing its services to corporate customers.
Professional services project life cycle phases
Even though some phases of the professional services project life cycle may seem similar to the ones from project life cycle, there are significant differences in their execution.
The devil’s in the detail - and we discuss all the details of the phases below.
Stage 1: Sell phase in professional services project life cycle
In the professional services project life cycle, the work begins even before the kickoff meeting - that is because it begins with the sell phase unique to the cycle.
The main point of the sell phase is to ensure that the project can be completed in the company while convincing the customer to sign the contract. While it may sound simple, it is not. That is because, in contrast to companies from other industries, professional services require much more extensive analysis to determine whether or not the business has time and resources to complete the project.
Sell phase - key takeaways
To complete the sell phase of the professional services project life cycle, you need to:
- conceptualize the project and its scope, and define resources needed to complete it,
- perform project management forecasting to check whether the right team members are available on given dates,
- estimate the costs (including overheads, wages and tools),
- assess the risk and the probability of success based on the information above,
- complete bid managements, negotiations and formal operations, should all of the steps above be completed as planned.
Importantly, all of these phases should be completed based on the information from one project portfolio management database that contains all the necessary data from various departments and teams in the company. Otherwise, the estimations can prove to be inaccurate in the future!
Stage 2: Plan phase in professional services project life cycle
When the sell phase is over, the plan phase begins. In general, it focuses on resource management and time management - in most of the cases in the IT industry, it’s all about assigning people to different phases of the project.
The main objective of the plan phase in the professional services project life cycle is to prepare a timeline with key objectives, stages and allocations. In the end, it should give all the employees a transparent view of all their responsibilities in a given period.
Project planning in Primetric is easy thanks to the project calendar.
Plan phase: the project plan
Before we move on to the final plan visible above, we need to complete a few steps to complete the project plan. In general, project planning should include:
- functional specification of the final product,
- master plan,
- project schedule,
- risk management status,
- milestones report.
Such a plan can provide project managers and executives with a general overview of the project and help them make better decisions. It is also essential for project success, as it points out to its key objectives and shows the resources and actions that are needed to complete it.
Plan phase: scheduling and resource management
After the plan is completed, you can move on to the scheduling and resource management - another part of the planning phase essential for project success.
At this point, you should:
- develop a timeline for the project,
- determine the milestones and key objectives,
- establishing the measures of success for the project,
- complete the resource planning and scheduling in project management, possibly using resource planning tools for greater accuracy. At this point, you can also assign tasks to the specialists assigned to the first stages of the project.
Resource allocations assigned to the project in Primetric
After the planning phase is finished, you know exactly how the project will look like during development, and you can address the first issues (should they arise, of course). Simultaneously, with such an approach you can reduce the costs of inaccuracies and make managers’ work easier by helping them avoid the most common mistakes in project management.
To add to that, in-depth resource allocation can help you save money that would otherwise be wasted. Why? We discussed the problem in detail with our customer, HSD, that saved 200 000 dollars in its first year of using Primetric. .
Stage 3: Delivery and improvement phase (execution phase) in professional services project life cycle
Delivery and improvement phase, also known as execution phase, is when the real work begins. At this point, all the allocations become active and specialists head to their tasks.
However, from a manager's perspective, it’s still not the time to sit back and relax.
During the delivery phase of the professional services project life cycle, you should focus on executing the project plan and completing objectives regardless of the issues that may arise. To do so, you can use Primetric’s reporting and project portfolio management tools to ensure your success.
Delivery phase: key takeaways
To succeed in executing a delivery phase, you should:
- execute tasks according to the plan. The easiest way to do this is to monitor the work using time tracking tools available to all the specialists involved.
- completing the milestones and key objectives on time,
- reacting to any arising issues, including delays, conflicts, unexpected absences, and more.
Time tracking in Primetric
With a bit of supervision that can be done entirely in business intelligence tools, you can efficiently manage risks and communicate progress to the customer.
Improvement in the delivery phase
However, as we mentioned above, the development of a project in a professional services project life cycle is not all about the product; it’s about the customer’s experiences, too. That is why his opinion can, and should be valued throughout the delivery stage.
To ensure that the project will meet customer’s expectations, you should:
- regularly meet with the customer to verify the progress,
- consult with them whenever a controversial issue arises,
- receive and analyze regular feedback that points to the areas that could be improved (both in the project and the entire process).
You can sustain that type of communication by regular calls, e-mail updates, or even meetings.
By doing so, you not only increase your chances of success in a given project, but also learn from your mistakes and improve your processes for future endeavors.
Stage 4: Accounting phase in professional services project life cycle
The accounting phase in the professional services project life cycle is dedicated to recognizing the real costs of the project.
Originally, such a phase didn’t exist in the traditional project life cycle. However, due to the current state of the IT industry, it is necessary. That’s because the IT industry needs to combine different billing types (T&M, Fixed Price, maintenance fees, and more) with various types of contracts and overheads. That is why the companies operating in the field have to face numerous challenges while billing their projects.
Still, regardless of all that complications, the main objective of the accounting stage remains the same: to manage finances of the project and all its parts to determine the real profitability of the operation and improve processes.
Accounting stage: key takeaways
In theory, this phase of professional services project life cycle includes:
- monitoring all the costs for the project, including wages, overheads, contractors and more,
- determining billing types and managing invoices,
- invoicing and collecting money from the customers; project accounting.
However, this list combined with all the challenges we’ve mentioned above, makes the process a little bit more complicated.
Why? Let’s take a look at the example below.
Accounting phase - example
The project being completed by the Best Company will take one month to complete. It is a Fixed Price project.
The accounting shows that the project includes many costs such as:
- wages for contractors: one tester ($30 per hour), one developer (40$ per hour) and UX designer ($35 per hour), with 160 working hours in a month - $16 800 in total.
- wages for regular employees: one developer ($5000 per month, taxes included) and one tester (4500$ per month, taxes included) - 9 500$ in total.
- company overheads: utilities ($200 per month per project), rent for the office ($500 per month per project) and new equipment ($100 per month per project) - that’s 800$ a month in total.
Therefore, the basic costs of the project are $27 100 per month.
Initially, the price for the project per month was estimated to be $35 000 for the Fixed Price project. Therefore, the project remains profitable.
However, this cost may differ depending on the company (i.e. overheads), or the project itself (requirements, vacancies, overtime, etc.). As a result, in the accounting phase you have to carefully analyze all the factors to come up with accurate calculations.
Complete breakdown of project costs you can use for reporting or billing your clients
That was the case for Netgen - a company that has successfully managed to get the number of inaccurate invoices to 0.
Stage 5: Analysis phase in professional services project life cycle
In general, the analysis phase in professional services project life cycle tends to start after project closure. However, based on numerous examples from our customers, we believe that analysis can also be performed regularly during the project execution phase thanks to business intelligence tools.
When should I analyze my project?
The analysis during project execution allows all the managers to have constant control of the project and improve it whenever necessary. It’s also perfect for avoiding obstacles and even preventing them before they appear.
The analysis during project closure, on the other hand, looks more into the overall performance of the team and its members. The information gathered at this stage of the professional services project life cycle provides the company with valuable feedback that can later be used to improve critical processes.
Whether you choose the former, the latter, or both, your analysis should primarily focus on the real metrics provided by reliable sources - we recommend using project management and business intelligence tools. Only then you will be able to evaluate the progress of the project, spot any issues and suggest solutions for the future reference.
Analysis phase: key takeaways
To draw accurate conclusions from the operations in a given project, you need to focus on:
- Analyzing the performance of teams and employee performance,
- Analyzing key metrics,
- Calculating margins,
- Measuring utilization,
- Forecasting trends and future needs.
But why bother with all of these statistics in the first place?
Because, regardless of the stage of the process they are analyzed on, they can provide managers with valuable insights on the problems, but also successes in the project. As a result, the data gathered during the analysis stage of professional services life cycle can contribute to significant improvements in the future.
Analysis phase: feedbacks and opinions
As we mentioned before, the professional services project life cycle is all about feedback from customers. So, it certainly comes as no surprise that we need to take this into account when performing an analysis of the project.
By the time the project ends, the manager in charge should prepare for the final evaluation of the progress. It may take the form of a survey, a conversation or a meeting - it’s up to the company and its customer’s needs. You can also use automatically generated reports available in Primetric to draw conclusions from the execution of a project.
Type of the feedback acquisition procedure is yet of little importance here - the customer’s experiences are what really counts. The final evaluation should include things such as:
- Overall feelings and experiences
- Key advantages
- Critical issues
- Quality of particular stages of the project
- Meeting the requirements
…and more - the indicators in the last feedback may differ depending on the type of project.
These opinions, however, should not be permanently separated from the data gathered by the analytic tools. They should be compared to determine which fields of the projects were entirely successful from both perspectives, and which were lacking. Only then you will have a full overview of project performance.
Stage 6: Maintenance phase in professional services project life cycle
Maintenance phase is specific for a professional services project life cycle in the IT industry. That’s because some projects, even after they are completed, require additional actions and updates to remain functional in the future. In general, that is the point of the maintenance phase: to regularly tend to the software and ensure that it remains operational.
Maintenance phase: key takeaways
Maintenance phases for various products may differ, as there are no identical projects. However, the key objectives for the phase generally include updating the software to keep it running smoothly and adding new features when necessary.
This list of key objectives is very flexible, though - in fact, we can never tell what new improvements a product will need in the future!
Professional services project life cycle: download a template
Do you want to introduce a professional services life cycle to your company?
If you do - you do not need to retype all the information above to a separate document. Instead, you can simply download our professional services project life cycle template - and you’re good to go!
Benefits of the professional services project life cycle
All things concluded, it is easy to see that the optimization of professional services project life cycle can be beneficial for the project and the company as a whole. This is, however, a very general approach, as the benefits of such approach appeal mainly to the managers.
So, what can they get from improving the professional services project life cycle?
The CEO's job is to monitor everything that happens in the company - and the professional services project life cycle helps him do just that.
By looking at the cycles of one or many projects at once, the CEO can clearly see the utilization, prospective vacancies and other critical problems. He also gets a bird’s eye view of the operations, their potential and finances. All in all, he can simply see his projects grow, and his company follows.
The main goal of the COO is to fit more projects in the company, increasing its revenues. At first glance, the professional services project life cycle has nothing to do with that - but let’s dig a little deeper.
With accurate estimations and throughout consultations that take place in the first 2 stages of the professional services project life cycle, the COO can accurately estimate the resources needed for the project and allocate them accordingly. He can also act on the information on any problems, such as vacancies or overbookings.
Additionally, he can also stay on top of the communication between the departments involved in launch of a new project, i.e. HR, sales and development. As a result, he can ensure that no conflicts will stay in the way of new opportunities, ensuring the company’s growth as a result.
For PMO, the professional services project life cycle is one of the basic tools ensuring the success of his endeavors. That is because the process covers all of his responsibilities: from assessing the potential of the projects, to its closure.
As a result, with such a cycle in place, a PMO can improve the processes within the projects, fix the relationships between different operations when necessary, set the pace for acquisition of new customers and, last but not least, make the company's operation better and better by the day. We doubt if there’s any process better from his perspective!
With a professional services life cycle, a CFO gains a full understanding of all the finances within the project at its every stage. That’s why such a process includes budgeting and monitoring at almost every step on the way, which makes CFO’s job much easier, helping him choose the most profitable ones.
A professional service project life cycle is particularly beneficial for CFOs and managers who want to keep track of their finances in real time - you can see how Fingoweb has done that!
Manage professional service life cycle like a boss
Still having doubts about introducing a professional services product life cycle to your company?
Try reflecting the process in a tool that was made to do it.
Browse Primetric’s offer, book a demo or contact one of our representatives and see how project management looks like in a dedicated environment.