4 Project Management Challenges and Fixes for Service Firms

Common Project Management Challenges

Delivering projects is tough work. As project managers, we are focused on delivering on time, on budget, at high quality. As we mentioned in a previous project analytics management post, the old adage goes – fast, cheap, good…pick two.

Project Management Challenges

So, what are the common project management challenges for professional services teams? Anyone focused on complex project work knows challenges change from project to project. Beyond that, when you research typical challenges, it is almost all focused on what happens in a project. The reality is that challenges happen before a project even begins.

According to the Resource Management Institute, 60% of the most mature services organizations need better reporting and analytics.

With that in mind, let’s jump into four project management challenges you might face during a professional services automation project and solutions to help overcome them. How can we solve these project management issues with improved tracking and measurement?

Project Management Challenge #1: Forecasting Resources

The Problem: Now more than ever, resource planning has become a more challenging aspect of project management. Combine this with the current macro-economic environment and you have an even great project management challenge.

Before a project even starts, it cannot have problems unless it has good people to deliver work. Even when there are people to deliver work, the gap between signing the contract and beginning work is opportunity cost. So how do we measure our way out?

The Solution: Forecasting the supply and demand of resources to projects is always a bit of art and science.

The science requires data from two critical sources: the pipeline from the sales or account management organizations with a clear understanding of required scope and resources; and billable utilization data to understand the current capacity and availability of the team.

The art is to use experience and sound judgement to qualify the data. Is one of our sales reps more optimistic in the ability to close the project? Is one of our project managers sandbagging the timing of delivery? These are nuances that help to thread the needle of strategic resource planning. Beyond that, when we combine the art and science we can also close the gap between contract signature and project start, reducing potential risk here for project management challenges.

Bonus: Download this FREE guide to learn the basics of key performance indicators that drive professional services and how to use them to minimize project management challenges.

Project Management Challenge #2: Project Accounting

The Problem: When professional services organizations first start up, they focus on delivering great work. However, as they scale, compliance with revenue recognition starts to become a greater challenge in project planning processes because of a forced change to become an accrual based business, typically at $5M in revenue. What ends up happening is project managers are forced to use spreadsheets to track project milestones and complicated revenue recognition calculations. Usually, these spreadsheets have some hilarious name…

The Solution: The basis to solve this common project management challenge has three parts. First, we need to always track our contract type. Fixed price, time and materials, cost plus, not to exceed, etc. Each contract type changes the way that revenue can be recognized.

The second thing we need to do is track our time. Without an understanding of time (or billable utilization), we cannot forecast our resources for future projects, bill our customers accurately and most importantly ensure the project we are working on is profitable.

The third thing we need to track is our invoices ensuring that the time we worked that ends up on an invoice is the bare minimum we need to do to avoid revenue leakage. If we get these three basic measures in place, project accounting or cost accounting becomes much easier.

Project Management Issues


Project Management Challenge #3: Customer Expectation Management

The Problem: When customers buy professional services, it is the responsibility of the sales team or account management team to set proper expectations on scope.

Ideally, there is a well-defined statement of work (SOW) for a project with clear bounds on what is in and out of project scope. However, we all know that sometimes grey areas can be created on customer expectations resulting in a project management challenge.

The Solution: There are two ways to get ahead of this project management challenge. The first is having a project plan that includes resource ownership by task. By having this information, we should be able to track time at a task level. Specifically, if you do not ask “what percentage complete is this task?” when consultants are submitting time, it is worth thinking about implementing.

This solid foundation enables project managers to forecast an estimate at complete. This allows the project manager to front run any expectations with customers. Most every customer issue comes from a surprise. If you can eliminate the surprises, things go more smoothly resulting in fewer unexpected challenges faced by a project manager.

Project Management Challenge #4: Employee Attrition

The Problem: This is a project issue example that can happen before, during or after a project and has an extortionary impact on organizations. We actually published a piece in Forbes talking about how losing a consultant could cost up to $150,000 and maybe more. The great resignation or the turnover tsunami isn’t helping. All organizations, including professional services organizations are facing this project management challenge. So how can we get ahead of it for more effective project management and successful completions?

The Solution: We did some significant research into this topic looking at tens of thousands of consultants to understand why they leave. What does it come down to? Time off, workload and professional development. What we found was consultants that left had 18-23% higher workloads and had less frequent and recent time off.

Modeling out time off and workload is an interesting way to predict attrition. More specifically, by using utilization data alongside time off, professional services organizations can create an attrition prediction model. Just remember, prediction is only half the battle, as good management intervention, empathy and effective communication are also key to using this model.

Project Management Issues

Overcoming Challenges Faced During Projects: The Solution for the Solutions

We’ve broken down some of the most common project management challenges and project portfolio management challenges that professional service organizations and their clients may face during a project. Four common project management challenges or issues include:

  1. Forecasting resources
  2. Project Accounting
  3. Customer expectation management
  4. Employee attrition

While professional services organizations can explore each of these solutions with point solutions or spreadsheets, using Professional Services Automation software (PSA) provides a distinct market advantage. PSA solutions can assist with improving key measurement processes for service professionals and organization, making it possible to solve for project management challenges such as the ones noted above.

If you are interested in understanding why Projector has been the most performant PSA in the market for the past 12 years, we would love to chat about how you can streamline your operational processes to improve efficiency and overcome project challenges and roadblocks. Just a heads up, we are geeks, but helpful geeks. Even if we aren’t the right fit for you, we love to engage in good conversation surrounding your company and project goals.

At the end of the day, we are in business to be helpful. Good luck delivering successful projects and great work!

Infographic | 4 Project Management Challenges

4 Project Management Challenges

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WHITE PAPER: Metrics That Matter For Professional Services Organizations to Conquer Project Management Challenges

Frequently Asked Questions About Project Management Challenges

What are issues in project management?

Project management issues are something that can occur unexpectedly or break the normal flow of a project, including broken deadlines, affected customer satisfaction and cost overruns. Anyone focused on complex project work knows challenges change from project to project. Beyond that, when you research typical challenges, it is almost all focused on what happens during a project. The reality is that challenges happen before a project even begins, and issues can oftentimes be resolved with improved tracking and measurement.

What are 4 common project management challenges?

4 common project management challenges or issues include:

1. Forecasting resources
2. Project Accounting
3. Customer expectation management
4. Employee attrition

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