Whether it’s a one-off project or a fresh retainer, new business often sends professional services organizations scrambling to fill or expand their capacity. But when teams don’t have the right data and tools at their fingertips, the associated costs and ramp-up times of that expanded capacity can be murky at best—and margin-destroying at worst. Often, it’s only after the dust has settled and the project has closed that they’re able to step back and assess how profitable a project truly was with the resources that were allocated against it.
A financial dashboard that’s easy to use helps flip that script, from a project post-mortem to proactive personnel planning. That means everyone—HR, finance, sales, services, and business development—can be part of the conversation at the very start, with accurate, comprehensive, and real-time information. Instead of each department tracking its own metrics and using scattered, siloed data sets, there’s a single source of truth when a new deal is inked and the company’s capacity needs to expand in an instant.
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Capacity flex as a team sport
More collaboration and conversation upfront can also help department heads recognize the role they play in personnel planning. Because, in reality, it’s not just the sales team inking deals and the resource manager scrambling to assign staff to projects.
When HR has more visibility into the financial data, it may flag the recruitment and training costs of constantly ramping up new hires and suggest an alternative. Or HR may mine historical data around pay levels and tenure at the company and suggest a tweak that makes a significant impact. The business development team might study the ROI of various third-party partnerships and contractors that the company has used to augment its capacity in the past and pilot new initiatives to drive greater value. Project managers can zero in on those projects with the greatest variances between expected hours or margins and actuals—and then flag future initiatives with similar structures or similar team members for greater oversight.
And for sales and resources departments, having access to a financial dashboard puts their hustle into context. The sales department might be incentivized or guided toward the most profitable types of projects or services teams. The resource manager could better understand when to escalate concerns about a potential staffing shortage or an overtime issue.
Rolling up the real costs
A powerful and intuitive financial dashboard is an essential step to fostering cross-department collaboration around capacity flex and value. But it also blows brittle spreadsheets out of the water when it comes to handling complex calculations.
When you’re tracking billable hours to multiple clients and multiple business models, as well as overhead, training costs, and unbillable time—and also layering in augmented capacity like contractors—trying to calculate the ROI on any staff hire or project can be incredibly complicated. Creating a formula in a static, clunky setup like Excel can mean even one broken link or accidental typo leaves the finance team hunting through dozens of cells looking for the error—and casting doubt on the accuracy of the entire spreadsheet. That’s why when teams set out to get greater visibility into the cost of their flex capacity, it’s imperative that they pause to consider which tool is really cut out for the job.