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July 2012

Services Resource Planning -- Changing the Game for Service-Driven Organizations


In my previous blog, Blindsided: Why Service-Driven Organizations are Unprepared for Swings in Demand, I discussed some of the pain project-based service organizations are currently facing... To summarize, virtually every organization experiences the following challenges:

  • Unreliable forecasting means incoming demand is always a surprise
  • Poor visibility of resource utilization; to find the resource information they need they must look in multiple spreadsheets and/or make multiple phone calls
  • Specialized, higher cost resources are consumed on low margin engagements and activities
  • Project execution methods are inconsistent, wasting resources on rework often cause delivery delays and customer satisfaction problems

But there is a light at the end of the tunnel. The following abstracts tell the stories of two real world service-driven organizations overcoming their resource management challenges and their achievements realized.

SRP in Clinical Research Organizations (CROs)

This leading service contract and research organization provides clinical services in Phase I-IV clinical research studies to the pharmaceutical, biotechnology and device industries. The company has offices in 20 countries and 2,700 employees worldwide.

Prior to implementing SRP, their business issues included:

  • Unreliable forecasts (revenue, costs, hours) that led to missed delivery dates and the inability to drive profitability and margin levels of trials to target levels
  • Poor visibility of resource utilization, which led to poor project prioritization and valuable resources being consumed on low margin engagements and activities

Once they implemented an SRP solution including enterprise portfolio, resource, and project management, they reported the following benefits:

  • More timely and accurate information led to better prioritization of projects, skill set matching, and staffing of projects and thus increased revenue and better margins
  • Go or kill decisions were made more quickly based on more accurate and timely resource and financial key performance indicators
  • Improved responsiveness and timely project delivery to end clients has led to increased customer satisfaction and increased repeat business

SRP in Technology Services

This example features a customer in the technology consulting industry that provides global services, software, and processing solutions for financial services, education, and the public sector as well as support services for their large global client base.

Prior to implementing an SRP solution, they faced the following challenges:

  • Lack of visibility into resource availability and skill set utilization across regions were causing revenue loss
  • Project delays were a leading cause of poor resource utilization and availability problems
  • There was no unified view of financials across the business, so data was kept manually, leading to inconsistencies and confusion

During the solution implementation period, for the very first time, the company had access to resource utilization with a detailed view over time, which provided additional insight into issues that were previously hidden using the previous process.

Now with SRP:

  • They have one "system of truth" that allows them to view all global projects, resources, and financials enabling focus on the most profitable projects in alignment with corporate goals
  • Executives have access to real-time data based on key metrics and analytics that allow faster, better business decisions based on fact rather than "hunch".

These are just two examples of customers who suffered from the lack of visibility into their resource situations and after implementing SRP using Planview Enterprise, are no longer blindsided by swings in demand. For more information about Services Resource Planning, download a copy of the latest IDC Executive Brief titled, Service Resource Planning: Systems for Effectively Managing a Project-based Business. I would like to hear from you. How are you dealing with the challenges of managing resource pools in your service-driven business?

Related posts: SRP and PSA -- There IS a Difference and Blindsided: Why Service-Driven Organizations are Unprepared For Swings in Demand

The Role of Spreadsheets in a Long-Range Planning Process -- Part 2


Part one of this series notes that 1) there are appropriate uses for spreadsheets in the planning process, 2) there is a key point at which spreadsheets fall short (alignment), and 3) an appropriate planning tool is one that makes the most of the strengths of spreadsheets in the data gathering process. In this blog, I'd like to focus on another positive feature of spreadsheets, and discuss why it's important to select a planning tool that maximizes this key strength.

We love spreadsheets because of their flexibility to create different tables, graphs, reports, and charts. In the planning process, trying to use spreadsheets to create a multi-faced view of different tables and graphs while attempting to optimize a portfolio is a bit like asking a mason to do wood frame construction. While it is possible to rig multiple spreadsheets to create various views, spreadsheets have no built-in optimization capability.

Further, managing tables, graphs, reports, and charts becomes cumbersome as numbers and requirements change. Frequently, broken links and nonsensical charts are the result. This is what prompts some companies to look for an automated solution.

Many planning tools tout their reporting and analytic capabilities. In fact, so many vendors offer these features that choosing a planning package without them would be a mistake. When looking for a planning tool, I always instruct clients to look for two key analytic capabilities, both of which are strong compliments to spreadsheets. The first of these features is portfolio optimization -- identifying the most efficient application of available resources (affordability). This can be achieved through a central repository that allows prioritization, working with targets, and efficient frontier capabilities. The second is the ability to create data "cubes" that are accessible through Excel. These cubes create the capability to store queries, create pivot tables, and generate output.

The combination of these capabilities is particularly compelling. Envision a planning tool that allows the creation of several potential optimal scenarios which can be accessed through Excel to populate desired tables, graphs, reports, and charts. Adopting a planning tool that will maximize your use of spreadsheets, both in data gathering and analysis, will turbo charge your long-range planning process.

For more information on this subject, I invite you to read the 15 Pitfalls of Long-Range Planning white paper.

How do you use spreadsheets in your long-range planning process? Are they working well or are they falling short? Share your experiences by posting a comment below.

Related post: The Role of Spreadsheets in a Long-Range Planning Process -- Part 1

Managing Project-Based Businesses in Turbulent Times


Written by Michael Fauscette, Group Vice President, IDC

Michael Fauscette

No one will argue that the economy is creating many business challenges for project based businesses. Thinner margins, slowing revenue growth, fewer projects, lower bill rates, changing customer and employee expectations, and new technology trends including the consumerization of IT are daily topics for many executives. In these rough waters, how does the successful executive navigate through all of the challenges and thrive when others fail?

On my personal blog, I recently wrote an article titled, Sense and Respond, Operating a Social Business where I discuss the management concept, sense and respond, that I believe is absolutely critical in today's business environment and has the potential to form the foundation of the next generation business operating model. Developed in the early 1990's by an IBM researcher, the concept has the capability to transform businesses in this post-industrial, information-driven Internet economy. If you're interested, I invite you to read it yourself when you have a chance.

This blog will highlight one of the key components of the sense and respond model: the ability to collect and analyze critical business information in real or near real time, and use that data to make timely business decisions.

So how does this apply to the project-based business? Project-based businesses are optimized by managing to key performance metrics, which has always been the best approach. The problem for many firms is that getting the required data out of disconnected and poorly designed systems can be near impossible, and even if you can get the data, do you trust that it's correct?

What Do I Mean by Performance Metrics?

These key business indicators are broad across the entire business operation and include things like:

  • Revenue and profit margin down to the project level
  • Billable resource utilization across all locations/offices
  • Resource schedules
  • Forecast and pipeline
  • Project close rates
  • Project portfolio risk view
  • Project history
  • Project progress
  • Client open issues
  • Client lifetime value and profitable

Many project-based businesses I talk with are running on disconnected systems not designed to manage a project-based business. Many of them have systems that they have customized heavily to try and make them "fit" and/or are stuck on old technology. Some even have developed their own systems that require constant upgrades and maintenance and often do not deliver the information they need.

The Solution

There are fairly new systems available that are integrated across the entire project lifecycle and are purpose-built to operate a project-based business. These systems are called Services Resource Planning (SRP) and provide all the tools to optimize resources, manage project portfolios, optimize profit, effectively manage client issues, and optimize firm financial management, all in an integrated system with projects at the core.

Operating in a sense and respond model requires reliable, timely business data and to get that you must have integrated systems in place that can provide the right data at the right time. For project-based businesses, SRP delivers the data necessary to navigate your business effectively and are absolutely an essential part of your business strategy.

I want to hear from you. How are you currently gathering performance metrics in your organization? Are they accurate? Share your experiences by leaving a comment below. For more information on this topic read the latest IDC Executive Brief titled, Services Resource Planning: Systems for Effectively Managing a Project-based Business.