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.

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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.

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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

Podcast: Sylvia Romero Discusses Impact of Dynamics 365 for ProServ Firms in the West.

Regardless of location, size or industry, many professional services organizations face unparalleled pressures in today’s fast moving marketplace. Continuous change is the new normal rather than the exception. The same forces that have disrupted so many businesses, from manufacturing to IT to engineering, are creating challenges and driving change in professional services.

In this, the third in our series of Dynamics 365 podcast interviews for 2017, we interviewed Sylvia Romero of Microsoft and Robbie Morrison of SBS Group.  We asked each of them to reflect on a series of questions regarding Microsoft Dynamics 365 in relation to professional services firms.  The conversation was 36 minutes long and covers a wide range of topics.

Listen to the Podcast:

“I’m really excited about Dynamics 365 because it is different than anything offered in the market today.  I work extensively with project-based service companies that traditionally depend on many different systems to manage their business.  Dynamics 365 provides everything they need and ties it all together through Azure and the common data service.” – Sylvia

About Sylvia Romero

Sylvia lives in the San Francisco Bay Area as a Business Solutions Executive for Dynamics ERP in Microsoft’s West Region.  She brings over thirty years of senior executive experience in sales, sales management and business development with both large companies, such as IBM, Informix and Microsoft, as well as small/startup firms.  Currently, she is responsible for helping enterprise and upper midmarket companies select and adopt Microsoft Dynamics 365 for Operations in the Pacific Northwest.

Microsoft Dynamics 365 for Operations

About Robbie Morrison

Robbie has participated in and hosted several podcasts on this topic over the last year.  As the VP of Enterprise Solutions for SBS Group, Robbie works with professional services firms throughout the US and spends much of his time leading the development of software designed to enhance Dynamics 365 to meet the unique needs of project-based firms.  His team has published multiple solutions on Microsoft AppSource and has a long history in developing and publishing solutions for the Microsoft Dynamics Ecosystem.

Dynamics 365 for Operations

Microsoft Dynamics 365 for Operations enables you to make smarter decisions, redesign business processes faster and fuel business growth.

Dynamics 365 for Operations is a SaaS solution that brings together a complete set of ERP functionality including financials, demand planning, procurement, supply chain, manufacturing, distribution, services industries, public sector and retail. Built with an intelligent user interface that connects with other Dynamics 365 applications as well as with Office 365 to deliver the best experience possible.

Designed for enterprises looking for an enterprise-ERP to help them keep pace with today’s market demands, Dynamics 365 for Operations delivers features and services no other competitor can offer.   Deploy Dynamics 365 for Operations where you need it, and grow at your own pace.

AXIO Professional Services

AXIO for Professional Services from SBS Group is a global ERP solution designed specifically for organizations that deliver customer-facing, project-based services. Built on the Microsoft Dynamics 365 platform, AXIO combines SBS Group’s award-winning implementation methodology, industry expertise, and a rapid deployment model to bring you the best in ERP, CRM and Cloud.

AXIO Professional Services | Dynamics 365 for Operations

AXIO for Professional Services spans all the important processes in your firm, including resource management, project management, marketing, human capital management, and financial management. Optimized for cloud, AXIO can also be deployed on premise and is compliant with all GAAP, IFRS, Sarbanes-Oxley, and DCAA requirements.

To Learn More:

We thank Sylvia for her participation in this podcast series and her ongoing support of SBS Group, our customers and hundreds of businesses throughout the Western United States.  If you would like to get in touch with Sylvia directly, you can find her on LinkedIn. You may also listen to previous podcasts in this series with Ted Kempf or Suzanne Clarke

Finding out if Dynamics 365 and AXIO Professional Services are the right next step for your professional services firm is easy.  Reach out to Robbie at SBS Group by emailing info@sbsgroupusa.com and we’ll put you in contact asap.


Want to learn more about AXIO for Professional Services and Dynamics 365? Watch our latest webcast recording!

Listening In: Ted Kempf and Robbie Morrison discuss Dynamics 365 for Professional Services Firms (32min;12/2016)

It’s time to listen.

A quick google search will turn up websites, brochures, infographics and blogs galore on Dynamics 365.  There is certainly no shortage of digital content on Microsoft’s newest cloud solution for business, but nothing beats a conversation between serious professionals.  If you want to truly understand the value Dynamics 365 can bring to your firm, then listen in on this podcast with Ted Kempf (Director of Service Industries at Microsoft) and Robbie Morrison (VP Enterprise Solutions at SBS Group).

 

About the speakers:

Ted Kemp, Director Professional Services Industry Solutions for MicrosoftOur expert panel will include Ted Kempf, Director of Service Industries at Microsoft.  Prior to joining Microsoft, Ted held senior Industry leadership positions with Deltek, Oracle and Peoplesoft. He also spent 5 years as principal analyst for Gartner.

The panrobbie-morrison-sbs-group-dynamics-365el also includes Robbie Morrison, Vice president of Enterprise Solutions for SBS Group.  Robbie is a well-recognized leader in the Microsoft community, having both owned and held leadership positions with some of the most successful Dynamics consultancies in the US market.

How do I know if I’m in a Professional Services Firm?

The professional services sector is typically defined as firms that provide accounting, advertising and marketing, architectural, consulting, engineering, IT, legal, and scientific research services.  There are others, but the common denominator is projects and billable services.  Our company provides both projects and support services to companies interested in implementing Microsoft technology so we would be considered a professional services firm ourselves.  Check out a list of industries we service here.

Having a regular flow of projects and delivering them efficiently almost always makes or breaks a professional services firm of any size. Large firms struggle less with resource balancing and are often able to offer wider ranges of services to meet the needs of major clients. Smaller and mid-market firms typically compete by offering unique expertise or focusing in specific regions. The US industry is highly fragmented: the 50 largest firms account for less than 20% of revenue.

IT services generate about 20% of the total revenue in the professional services sector, followed by architectural and engineering services, legal services and consulting services that make up around 15% each.  Accounting services,  scientific research and specialized design account for another 25%.

Law firms, banking, insurance and a variety of other companies may provide services to businesses, but are less tethered to projects.  Special needs in these segments often require different technologies and process models.

Topics Covered in this Dynamics 365 Podcast:

In just 30 minutes, Robbie and Ted cover a wide range of topics as they explore the business value of Dynamics 365 for Operations when implemented with SBS AXIO for Professional Services. They discuss their own experiences with these solutions in 2016 and share customer stories that provide “in the trenches” perspective you just can’t get in a brochure.

  • How is Dynamics 365 for Operations performing in the Professional Services sector?
  • How are customers responding to PowerApps, Flow, PowerBI, Azure IoT and Cortana Intelligence?
  • What is the CDM (common data model) being discussed with regards to Dynamics 365?
  • How do these solutions help firms better manage contracts? Recurring revenue management? Subscription billing? Project Accounting?
  • How does it work for sales, service, project management, operations and marketing?
  • How quickly can a solution be implemented?
  • What is “AppSource” and how is that a benefit to customers?
  • Do these solutions offer advantages in mobility? Are they secure?
  • How is Dynamics 365 performing against competitors like NetSuite or SalesForce.com?
  • What advice can you offer to Professional Services companies reviewing new ERP, CRM or other productivity solutions?

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Click below to listen in on the Podcast with Ted and Robbie

 

More on Dynamics 365 for Professional Services firms?

This is the first of several posts that will be published in 2017 to help potential buyers understand the potential benefits of a Dynamics 365 solution.  We’ll bring you podcasts from Microsoft employees, partners and customers and you can listen in on those that are closest to home for you.

If you are part of the Microsoft ecosystem and would be interested in participating in our series, please reach out to Robbie Morrison directly or use the contact form on this site to contact our marketing team.

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.

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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)

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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.

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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!

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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.

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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.

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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.

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  • 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.

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

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  • 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.

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  • 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 🙂 !!

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  • 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.

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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.

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