Even the smallest IT business can’t afford to use spreadsheets over the long term. Excel might be your friend in the short term, but spreadsheets aren’t practical in drawing a long-term view of workloads or profitability because they’re not:
b) easy to use
d) and adapting them to the roles in the organization and to grant/receive access is difficult.
If you’re running a larger IT services company, you or your PM probably need to upgrade from simple spreadsheets or project management applications to an integrated solution that centralizes key financial and allocation data for all of your projects.
But when is it the right time to implement this type of software? How can you tell that it’s no longer a nice-to-have but a critical need of your business? Keep on reading to find out.
What is project financial management software?
Project financial management software is an umbrella term for solutions that include specific project and financial management functionalities.
In an ideal scenario, such a solution can become a single source of truth for the whole company. That’s why it reduces schedule conflicts, eliminates many meetings, and improves teamwork.
Thanks to such business intelligence insights, PMs can increase project financial performance and keep profit margins at the level your business needs to grow.
How much does it take to implement a financial tracking system?
Implementing financial management tools is a process that you should never run through quickly and without paying attention to details. That’s because you’ll be making some pretty important decisions based on the data flowing from this software.
How much time does it realistically take from the moment you decide to implement a platform to launching it throughout your company? Better prepare for a long process that may last even a few months.
But trust me, taking your time is the best thing you can do here.
If you implement a project management solution as fast as possible and without paying attention to details like your company workflow, you risk wasting a lot of money.
The financial tracking system you get in the end might not align with your process perfectly. So, you’ll have to modify your workflow (and why should you when it already works really well for the business?) or worse - carry out the implementation all over again. You probably don’t want to waste time and money on that.
Now you see why implementing a shiny new tool isn’t going to make your business instantly successful.
To ace financial project management, you need to build a battle-tested workflow for all the project stakeholders. And then find a solution that aligns with it perfectly.
Start implementing your solution before it’s too late
As a PPM or COO, you have to be prepared for the future, not just be busy putting down fires.
If you’re considering implementing a project management platform that solves financials for you, it’s a sign that you need it more than you think.
You’re only going to win by implementing that tool early on. The longer you wait, the larger your company grows, and the more expensive this implementation gets.
The right moment for implementation is also when you’re preparing the company to scale or when a signal appears in your business that it’s time to grow. Such signals can be:
- You onboard more clients in a given period of time than before,
- Your PMs are fighting to get developers for their projects,
- PMs can’t handle more projects than what they deal with today.
If that signal comes from the financial department pointing out a problem, it means that you’re already way overdue with this implementation. Don’t wait for your finance team to come to you - start planning the implementation as soon as you see your company scale.
When to know that it’s high time you got a financial tracking system?
How can you tell if it’s time to implement a project financial management solution? Here are a few problems that are clear indicators of this need in your business.
Your spreadsheets are incomprehensible (not even you)
You’re dealing with multiple spreadsheets that take forever to load. Finding out anything starts taking a lot of time because you need to integrate data.
And more and more people come to you with questions because you're the only one who knows how to navigate them.
Optimizing this area can become a huge win. The Australian IT company HSD implemented Primetric and slashed the time required to get data from 15 hours a week to 30 seconds. The company’s savings and earnings increased by over $200,000 per year!
You don’t have a single source of truth about allocations
Misunderstanding around assignments might be causing your team members to waste time on overlapping or duplicating tasks.
Sometimes, you need to move people from one project to another. If PMs don’t have a system in place for this, issues such as allocation misunderstanding or double-booking may arise (and create even more work for you).
Here is the screenshot from the extensive document created by one of our clients to save time and optimize the allocation process. If you’d like to download this part to implement it in your organization, you can do it here: Allocation process
You and your PMs spend lots of time in meetings
And it’s not like you’re busy creatively brainstorming. You just update one another on who will work on which project, when, and for how long. Constantly.
I'm sure you have more important things to accomplish with your time than allocate resources manually.
You don't have a bird’s eye view of what's going on in your business
When people ask you questions, you have to go through your spreadsheets every time to get the answers. This starts taking up too much of your time and keeps you away from what’s really important.
You’re not sure how profitable your projects really are
You have no idea how your project's resources are being used. Are you using up all of your allotted time? Or are you wildly off the mark with your estimation? It's impossible to tell if you have no project management solution at hand.
Resource utilization rate is a mystery
Is there anyone who works too much overtime? Before you realize that, this might snowball into a greater issue and cause problems like loss of motivation.
If at least one of the issues listed above resonates with you, it’s high time you invested in a financial tracking system that can show you your resource utilization rate. Failing to solve these issues before growing your business will have a negative impact on the entire company.
What features can you expect from quality project management software? Here’s the answer.
Say goodbye to spreadsheets
Implementing project financial management software at the right time will save you plenty of trouble. The longer you wait, the harder you’ll get hit when trying to control the chaos of allocations, utilizations, and financials.
Want to make the first step today? Schedule a demo with me to see how Primetric can help you solve the most prevalent management and financial issues in IT firms.