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What you need to make your life easier (and get enough space for, let’s say, strategic planning?) are:
- a great workflow and methodology for making sense of it all,
- and a software solution that aligns with it perfectly.
The best thing about software is that it crunches data for you and gives you a hand at even the most dreadful task of all: forecasting.
Predicting the future is really helpful - you can plan projects and allocate resources better, get the profit margin you want, and - ultimately - grow your business.
Keep on reading this article to find out what project forecasting software, when to implement it, and how to do it right so you get maximum results.
What is project forecasting software?
Project forecasting software solutions are based on predictive analytics, a software functionality that helps managers like you to basically see the future.
The idea is that by looking at your historical data, you can discover trends and learn more about what happened to predict what’s most likely to happen next.
This is especially valuable for projects running over multiple months or even years, where many variables like your company overheads may change over time. You need to have a way to predict your costs - otherwise, you risk that your project doesn’t bring you the profit margin you need for your business to grow.
And this is just one of the many reasons why getting project forecasting software is a good idea.
3 reasons why you should implement project forecasting software
1. You’ll have a single source of truth as a powerful reference point
A lot of misunderstandings around resource assignments happen because people don’t have access to one constantly updated source of truth. Problems like double booking, duplicating tasks, or overlapping work result from that.
For example, during a long-term project, you may need to move someone to another project for a while. If your project managers don’t have a system in place to handle that, such an allocation creates problems like misunderstandings, double booking, and even more work and frustration for everyone involved.
One of our clients created an extensive document to save time and improve their allocation process focused exactly on this task. If you’d like to take a look at it and implement it in your organization, you can download it here:
2. You will have a bird’s eye view of what’s happening in your business
Is your project profitable today?
Will it be profitable in three months when you’ll be renting a new big office for your company and your organizational overhead costs will sore?
How are your team members using up all their allotted time? Are you off the mark with your estimations?
If you don’t have project forecasting software in place, answering all of these questions will be very difficult.
Even if you’re extremely meticulous when it comes to maintaining your spreadsheets.
3. No more last-minute hires with quality team planning software
Sure, you can ask your employees to work overtime if new resources are suddenly needed in the project and no one is available to help. But people can only stand so much overtime. Sooner or later, you simply need to hire another professional.
And you know how hard that can be in our industry.
Hiring a DevOps engineer can sometimes take even 2 to 3 months. What about a seasoned backend or frontend developer?
You can’t expect clients to wait months before expanding their project.
If you’re equipped with high-quality team planning software, this will no longer be a problem. You’ll be able to tell when a given need will arise way ahead of that moment - and get the ball rolling with your HR department.
As you can imagine, the HR department is going to be happy about that too. Nobody likes to scramble for a last-minute hire.
How to tell it’s time to implement project forecasting software?
Here are a few symptoms that indicate that you need to get yourself a product forecasting solution as soon as possible.
You don’t forecast anything at all
Every settlement is a surprise for you. You often don’t know how profitable a project will be until you actually generate the first invoice.
There are many reasons why managers don’t use forecasting tools to learn more about the future of their projects.
You might have never tried one that gave you good results. Or you don’t believe your estimations to be accurate enough to hold in the future.
Trust me, starting out any time is worth it. The more data you feed into the system, the more accurate its predictions will be.
The future is becoming increasingly difficult to predict
Things change quickly in the IT industry. People come and go, clients appear out of nowhere and suddenly engage you in the whirlwind of time-consuming projects.
As an IT services company, it’s natural that you want to stay open-minded and say yes to every project.
It might sound counterintuitive, but here it is:
But if you don’t run the numbers and just enthusiastically embrace every opportunity, you’ll be preventing your business from growing faster.
By implementing a forecasting solution, you’ll be able to crunch numbers quickly and check whether the proposed rates fit your expectations when it comes to your profit margin.
You need to support your business over long-term
If you’re running an IT services business and you’re serious about it (which I guess you are if you’re reading this article), it’s likely that you want to ensure its long-term growth.
Forecasting helps to do that. Forecasting anything from employee utilization rate to financial performance over the long term is possible if you get the right solution that supports this type of functionality.
What to look for in project forecasting software?
1. Product plan planning and resource scheduling functionality
A good product forecasting solution should include more than a simple assignment of people to project within a specific time frame.
What do you need is an option to run simulations of different scenarios to check how your decisions can impact your project’s profitability. The best solutions on the market give you this ability - you can forecast project realization rates, availability for resource allocation, or even the predicted number of vacancies.
This type of long-term vision is essential for making the best decisions for your business.
2. Excellent reporting features
How else can you tell whether your business is going in the right direction?
Here’s the interesting part about reporting: it works best if it covers data about your projects but also about your people.
From financial data to employee utilization rates, a proper solution gives you everything in one place. An added bonus is data visualization that speeds up the process of extracting insights from data - both for you and your project managers.
There’s no denying that our human brains love visualization and reasoning with it is so much easier.
3. Forecasting features
Knowing what happened in the past is important in project management. But the real value of historical data lies in the insights it can unlock about the future.
After all, we’re all in the business of innovation - which means looking towards the future.
A good product forecasting solution will come up with a bunch of different metrics like product profitability, employee allocation, employee utilization rate, and more.
By forecasting all of these, you’ll be able to formulate more realistic plans and avoid surprises cropping up later on. And the best thing is that you can always compare your plans to reality to check where are your estimations went off the mark. And then never make the same mistake again.
4. Financial models
A proper product forecasting solution needs to include Business Intelligence features that allow you to take a deep dive into your project and business financials.
By accessing this type of data, you’ll be able to instantly tell whether a project will be profitable or not - and by how much!
And if something goes wrong, you can instantly take action to change something and ensure the profit margin you need.
When should I implement project forecasting software?
Sooner is better than later, but later is better than never.
There’s no denying that running a larger IT company gives you more pain if you don’t have a system like that in place. Especially when departments like finance or HR start complaining about your lack of long-term forecasting capabilities.
Even if you’re running a smaller company, you’re probably going to grow - and then find yourself in trouble if you don’t have a solution to handle that scale.
Make sure to plan your implementation during a moment that is safe for you - not when you’re battling storms. Treat it as a real project at your company with all of its deliverables including change management which is arguably one of the hardest parts of implementing software like that.
But trust me, calm planning, structured resource management, a quick live overview of the most important reports... it's all worth it.
By developing forecasting capabilities at your company, you will:
- Build a solid recruiting pipeline and never find yourself without specialists when they’re needed,
- Keep your profitability rate in check by forecasting not only your revenues but also costs.
- And increase your bottom in the process.
I know running an IT services company is a struggle. I’ve been where you are right now and couldn’t find a way to understand where my company was going. That’s why we built Primetric.
If you’re curious about how a project forecasting solution works, book a demo and I’ll show you all the incredible forecasting features we prepared for busy managers like you.