Revenue Leakage in Project-Driven Companies >> Are you working for free?

In a professional services firm or any project-driven company for that matter, everyone knows that the difference between profit and loss can hinge on the slightest changes in some very key metrics.

Accurate tracking of billable expenses, efficient capture of hours delivered, timely billing and hourly rates are just a few of the revenue and profitability challenges that our customers deal with daily.  Inefficient systems and processes often handicap these metrics and result in unrealized billable revenue.

Project and Services companies deal with Revenue Leakage

Unfortunately, most companies are never able to recover unbilled revenue.  Even if a project or services contract allows for hours to be billed down the road, or expenses to be filed later, it is unlikely a customer will be happy about it.  Providing a positive customer experience is just as critical as ensuring that all potential revenue is invoiced.

When revenue opportunities are missed in these ways, we refer to it as revenue leakage – money earned but never collected.

How to approach revenue leakage in project-driven companies

According to Ernst & Young, revenue leakage can account for 1 to 5 percent of anticipated EBITDA being lost.  When was the last time someone said “Ya know, if we increased utilization by 2 points it would impact earnings by 3-4 times that”?  How about this one: “Our DSO is completely unacceptable.  We’re averaging 75 days from the delivery of a service to payment.  Our customers are paying on time, but we’re taking 45-60 days to produce a services invoice.  They aren’t unreliable, we are.”

Revenue Leakage Impact of EBITDA Projections

Changing these metrics is usually easier said than done and requires a measured, cooperative approach between senior management, operational leadership, and delivery teams.  The right technology can provide a platform for improvement, but training and guidance provided on a regular cycle is equally as important.

Identify and understand the leaks.

Take this on as an internal project, but don’t get immediately hung up on fixing the most obvious “leaks”.  Be sure to conduct a comprehensive discovery of related processes and systems that might be hampering the collection of billable revenue.  Estimate the total impact and create realistic goals for getting the correct systems and processes in place.

Plug the leaks.

As your project kicks off, remember that often multiple issues are interconnected and can be fixed as part of the same sprint.  If the leaks are a result of outdated or inefficient software, you may find that proven systems like AXIO Professional Services or Progressus come with built-in process guidance to help get things on track.

Don’t get too comfortable.

The job isn’t finished when you’re comfortable with the changes you’ve made.  Inefficient processes tend to develop over time with employee churn or changes elsewhere in the business.  Sometimes contracts or project plans are created that lack governance and become the norm.  You will want to build regular reviews of leading indicators and key metrics that help to alert you when things begin to move in a negative direction.

Be sure you can count on your ERP, PSA and CRM solutions.

Most companies, large and small, depend on a symphony of solutions to run their business.  Managing revenue streams often depends on multiple solutions being utilized by a variety of individuals that need to work together seamlessly to optimize results.  Consultants and field services people, accounting, billing, and sales people all need to communicate and have visibility into client data.

Join us in an upcoming webinar or visit our on-demand video library to find out how SBS Group has developed the processes, systems, and means of automation to tailor Microsoft Dynamics 365 for project and services companies.   If you don’t find what you’re looking for, please feel free to reach out to me directly with any questions about reducing revenue leakage.

5Reasons_email-400

Best regards,

Robbie Morrison
Chief Solution Strategist, SBS Group

About Robbie
Robbie Morrison has spent nearly 20 years helping customers build and deploy elegant technology and business solutions.  From start-ups to enterprise-class organizations worldwide, his knowledge of the Microsoft Dynamics ecosystem and Robbie-2017products helps SBS Group customers maximize ROI on technology investments.

Today, Robbie serves SBS Group customers in his role as Chief Solution Strategist where he provides thought leadership and manages the development of B2B solutions.  Robbie received his MBA from the University of Georgia, Terry College of Business.
https://www.linkedin.com/in/robbiemorrison

[webcast] Five Reasons Project-Driven Firms Switch to Dynamics 365

I’ve been asked this question a hundred times in many different ways, but it all comes down to “Why should a project-driven company switch to Dynamics 365?”.  It sounds like a simple question, but the answer can be a little overwhelming.  Of course, that never stops me from venturing an answer.

How is it overwhelming? 

At the risk of sounding like a software sales guy (which I’m not), I’d have to say that the answer is dependent on who’s asking.  The overall value to a traditional professional services firm is different than other project-driven companies, like machinery manufacturers or specialty contractors.  Research companies, government contractors and communications providers all gain massive value in different ways, but all have one thing in common:  Their business success is directly tied to large projects.

5-Reasons-Project-Driven-Companies-Switch-Dynamics365-02-02

A picture is worth a thousand words.

If a picture is worth a thousand words, then a 45-minute webcast should be more than enough to get the point across.  Join me on August 25th, 2017 at 11:00 a.m. EST and I’ll do my best to provide an answer to this question.  I’ll be….

  • Sharing the top five reasons we see project-driven companies switching to Dynamics 365.
  • Introducing you to the products our clients utilize to enhance Dynamics 365 for project-driven companies
  • Drilling into contracts management, project management, revenue recognition and other topics critical to project-driven companies.

Who should attend?

This webcast isn’t for everyone, but it will be of value to just about anyone interested in learning what modern business management systems look like for project-driven companies.   IT leadership, services directors, sales directors and certainly owners and executives will all benefit.

Does size matter?  Yes, but we will be outlining multiple options for large or global enterprise firms as well as SMB firms with less than 250 employees.  Although the implementations for each are distinctly different, the core value and challenges are quite similar.

If your company is planning to upgrade any of their core systems – like ERP, PSA, CRM or even office productivity, you may find that this event holds value.  If you want to know more about the value of “the cloud” or mobile access, then definitely join.

I hope to see you online.  Registration is easy, just click here to RSVP then login to join me on August 25th at 11:00 am Eastern.

5Reasons_email-400

Best regards,

Robbie Morrison
Chief Solution Strategist, SBS Group

About Robbie
Robbie Morrison has spent nearly 20 years helping customers build and deploy elegant technology and business solutions.  From start-ups to enterprise-class organizations worldwide, his knowledge of the Microsoft Dynamics ecosystem and products helps SBS Group customers maximize ROI on technology investRobbie-2017ments.

Today, Robbie serves SBS Group customers in his role as Chief Solution Strategist where he provides thought leadership and manages the development of B2B solutions.  Robbie received his MBA from the University of Georgia, Terry College of Business.
https://www.linkedin.com/in/robbiemorrison

Review of new features for Project Management and Accounting in Dynamics 365 For Operations

Dynamics 365 For Operations is a cloud based SaaS service, which provides rich features and functionalities to manage simple to complex business processes across all major industry verticals, such as Manufacturing, Professional Services, Financial Services, Retail, Distribution and more. It provides very rich features and functionality for project management and accounting for the professional services industry. In today’s post, we will review some of the key new features and enhancements that were released for project management and accounting, in Dynamics 365 for Operations (Update 3 released on NOV 1st 2016).

Let us review and discuss these new features in the order of what I think their significance would be for customers.

Dedicated PowerBI Content Pack for Project Management and Accounting Reports and Dashboards:

The is the biggest enhancement /new feature under Project Management and accounting in Dynamics 365 For Operations. Customers will now get access to preconfigured PowerBI Content pack that comes out of the box and provides key project management and accounting related dashboards and KPIs that are readily available for consumption. This content pack offers the following dashboards and reports. (Note: You can get access to the .pbix PowerBI files via the shared asset library in Life Cycle Services)

Projects Overview Dashboard: Shows overview of projects by customers, budget performance and revenue and provides a bird’s eye overview of the projects so that you can promptly review projects that are either exceeding budget, underperforming in revenue to take actions.

proj-db

Project Cost and Revenue Details Dashboard: These 2 dashboards enables you to view the project cost and revenue trends easily by customer and various other classifications and also shows actual bs budget comparisons.

proj-cost

proj-rev

Earned Value Management: Earned value management(EVM) is one of the key project health and success measuring criteria for professional services firms. Traditionally, in the earlier version of Dynamics AX, there was no dashboards/KPIs available out of the box that shows EVM and associated KPIs such as Cost Performance Index(CPI) or Schedule Performance Index (SPI), even though you could develop or customize reports and dashboards for these. But in Dynamics 365 for Operations, the content pack provides these out of the box enabling organizations to measure EVM and associated KPIs easily for projects. A very welcome addition !! (In one of the upcoming posts, I will dive deep into EVM in D365 For Operations)

evm

Project Hours Details report: This dedicated dashboard page shows the hours/time details for projects and resources. This also allows you to measure resource utilizations in various perspectives.

proj-hours

Manage Estimated Costs, Revenues and Item requirements on WBS Task Details form of a project:

In the earlier releases of the New Dynamics AX (Update 2 and earlier) or even in AX 2012, you could always define the estimated costs and revenues for each task on the WBS for a project. In Dynamics 365 For Operations, you can add estimated costs and revenue lines for Hours, Expenses, Items and Fees on the WBS task under ‘Estimated Costs and Revenue Tab” as you were able to do in earlier versions, But additionally, you can also manage these on the “TASK Details” form. You can also add/setup “Item Requirements” on the WBS Task details form, so that when you save and publish the WBS, Project Item requirements will be automatically created. (It was also possible earlier, but you had to transfer the WBS Item estimates to Item requirements specifically). Small enhancement, but can be very useful!

wbs-details

Option to setup ledger accounts for intercompany cost and revenues based on lending and borrowing entities for projects:

The Intercompany timesheet and intercompany customer invoicing has been one of the very useful features of AX which enables organizations to deploy resources from multiple entities on the project of borrowing entity and automate the intercompany timesheets and invoicing and accounting. In earlier versions, you only setup one Ledger account for Intercompany Cost and One ledger account for intercompany Revenue postings, regardless of the resource borrowing and lending entities. Dynamics 365 For Operations now provides the option to setup multiple ledger accounts for intercompany cost and revenue posting based on the resource lending and borrowing entities respectively.

int-cost-account

int-rev-account

Enhancements to Project resource management:

There are some significant changes and enhancements to the project resource management feature in the Dynamics 365 For Operations release. I am listing some of those which I think are important, but will discuss them in greater detail in one of the future posts.

  • Organization’s Operations resources such as Machines, Tools, Facility etc. can now be added as project resource and can be scheduled on projects. Earlier, only workers (Employees and Contractors) could be designated as project resource.
  • New Resource request workflow enabling a resource allocation manager to control the resource requests from various projects. (It was there in the AX 7 release as Planned resource, but it has be revised up to some extent)
  • Resource role based pricing and cost price visibility based on date of Task and booking.

resource-request

resource-request1

Miscellaneous usability enhancements across various forms:

The following are some of the miscellaneous usability enhancements.

  • WBS Task ID and the Task Name are now visible on the Project Forecasts Transactions forms. This will certainly make it easier to see the forecasts (Labor, Expense, Items, Fee etc.) at each Task level with easy identification of the task, instead of just looking at the Activity ID.

taskidname

  • On the Resource management screens such as Resource Availability, Resource fulfillment, clearing record selections for each date range is now possible and it a whole lot earlier and neat! Certainly a very useful enhancement.

clearresselections

  • Multiple record selections on various forms to take actions is now possible. An example is the price setup form.

multiselect

  • The Project resource availability form’s business logic now considers Employee’s efficiency rate. Earlier the resource availability was based on Competencies and calendar availability, but Efficiency rate might be a good addition. I am not sure yet if I would use/need it that much, it certainly is a good add-on.

res-avail

  • When you select the Project Manager on a project, it is automatically added to the Project Team under the Project Team and Scheduling tab. Make Sense and makes like a little easier 🙂 !!

pm-team-member

  • Timesheet workflow status is Reset if the workflow and Document status are out of Sync. I believe this enhancement is related to cases when the “Approval status” of a timesheet changes, but the corresponding workflow status does not change sue to unexpected intermittent issues. If this happens, my guess is the workflow status will automatically reset to match with the timesheet document/approval status. I was not able to review and test this feature yet.
  • You can now select a funding source specifically on Fee journal lines. This will prove to be a very useful enhancement, especially in cases where there multiple funding parties responsible for a project contract and when booking Fees for the contract, you can select a specific funding source if you want to bill the partially fee to that funding source. (Note: This was indirectly possible in earlier releases where you could do a Project Free Text invoice and select a funding source on the line, which in turn will post a project Fee transaction.

proj-fee-fundsource

Hope this was helpful! Till next time..

Sandeep

Sandeep ChaudhurySandeep Chaudhury is a Dynamics AX enthusiast with over 10 years of experience in functional consulting, Solutions architecture and systems integration, with expertise in the areas of Professional services automation(Project Management and accounting), Financials Management, Services Management, Sales and Marketing, Human resource management, Travel and Expenses Management and Procurement & Sourcing modules of Microsoft dynamics AX ERP. He has experience working with the Dynamics 365, AX 7, AX 2012 R3, AX 2012 R2 and more.

Creating a New Record From Your Outlook Inbox

Using Dynamics CRM, you can quickly and easily create a new record from an email in your Outlook inbox. If you also have IPM project management, that functionality extends to all the IPM record types as well. With a few simple clicks, you can move from your Outlook inbox to creating new records, and then be right back in your email – all with a single sign-on.

Here is an example of how it works:

You receive an email with a question from a client (Alfred). You decide to create a new RFI record to hold the information and to send out inquiries. Right from within the email itself, you can create the new record.

To create the RFI:

1. From within the email, select “Set Regarding” in the menu bar.

2. Choose the type of record.

  • In our example, we’ll choose RFI as our record type.
  • You may see the record type you want in the drop-down list. If this is the first time you’re choosing a specific record.

 

  • Email

3. Select the type record. (For our example, we’re choosing RFI.)

4. To create a new record, select “New.”LOOKUP WINDOW

5. The new RFI form appears on the screen.

  • Fill in as many details as you want, being sure to fill in the required fields at a minimum.New RFI

6. Close the new RFI.

7. The RFI you just created will be highlighted in the Lookup Window. Click Add.

8. The email is now attached to the new RFI record you created. It will appear in the Activity Feed on the record.

ADDITIONAL RFI FUNCTIONALITY OFFERED BY IPM

If you have the IPM software within your Dynamics CRM, you also have access to even more functionality designed to make your job easier and you more productive. When you send out an RFI request (by clicking the “send email” button on the RFI record), IPM creates an email with all of the RFI information included.

Even better, it also includes space in the email for a response and recognizes the response in a return email. If you have the email scraping feature enabled, IPM will pick up the return email and copy the information in the “Response” block to your RFI record in IPM.

RFI Response

EXTEND THIS IDEA TO OTHER ENTITIES

Although we used an RFI in this example, you can add any IPM or CRM record from your Outlook Inbox by using this method. When the lookup window appears, you will have the option to select any entity in use in your system (step 3 above).

It’s not easy being GREEN … in Construction

  It’s not easy being green….-Kermit the Frog

Are your construction and engineering departments working to leverage technology? Many customers today want to maximize the benefits found with GREEN construction, which means contractors need to be able to track subcontractors with GREEN experience and capabilities, specify GREEN standards, and ensure compliance.

Keeping track of all this GREEN information could turn into a job of its own, unless you have IPM, which already includes many of the features you need to optimize GREEN projects. Here are just a few ways you can use IPM to handle GREEN information.

  • SPECIFY GREEN STANDARD TASKS
    • Specify GREEN standards in your scope of work (Standard Tasks).
    • Apply these tasks to every Job / Subcontract to assure you are meeting GREEN standards for your customer.

  • KNOW WHO TO TALK TO WHEN GREEN IS IMPORTANT
    • Track LEED points/certification levels on your Subcontractors and other contacts.
    • Classify your contacts based on any criteria that you define (past performance, GREEN capabilities, availability, etc.)
  • EVALUATE SUBCONTRACTORS
    • Evaluate how much GREEN construction your potential vendors have done previously.
    • Evaluate vendors’ past GREEN construction scores with other contractors.
    • Evaluate how much capacity they have to take on a new GREEN construction project.

  • ENSURE HEALTH, SAFETY AND ENVIRONMENTAL COMPLIANCE
    • Track employee participation at LEED and other training events.
    • Create plans for achieving GREEN certifications and track progress against those plans.
    • Communicate GREEN compliance with customers.
  • MODIFY YOUR SITE DOCUMENTS TO INCLUDE…
    • Specific site instructions that assure subcontractors will follow detailed GREEN requirements for each job.
    • Documented risks caused by not using GREEN standards in a specific setting.
    • Inspection documentation to ensure that GREEN requirements are being met.
    • Quick and easy documentation of any non-conformance to established GREEN standards, including remediation requests.

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