How can organizations ensure sustainable business growth and increase profitability during an economic downturn? Is it at all possible when a great number of companies are cutting their expenses, postponing new projects, and reducing investments in an attempt to survive? In fact, it is! The right approach to project and resource management can really help business organizations to become profitable and competitive even during tough times. Let’s dive deeper into the issue.
The significance of proper project and resource management during an economic downturn
In a great number of companies, cost-cutting is a typical measure implemented in response to a crisis or recession. They may reduce the number of employees or their salaries/wages, close facilities, reduce investments, put digital transformation on hold, etc. It may seem that these self-preservation measures will help business organizations survive, but in fact, they aren’t effective in the long-term perspective. What is more, taking the right measures will give organizations opportunities not only to survive during the economic crisis but also to ensure their competitiveness, business growth, and profitability.
Among other things, effective project and resource management plays an important role in ensuring the above-mentioned outcomes. The survey conducted by the Economist Intelligence Unit shortly after the global financial crisis of 2008 has revealed that effective project management has helped business organizations to maintain their competitiveness during the recession. In particular, it helped them to:
- deliver projects with fewer resources;
- prepare for the future and gain a competitive advantage;
- prioritize projects effectively and choose those that provided the biggest value;
- avoid layoffs, and more.
For a great number of companies, the previous recession has become an impetus for reviewing their project management processes and making them maximum efficient. They wouldn’t be able to achieve the above-mentioned results without identifying inefficiencies, reorganizing work, setting the right priorities, managing risks, and assessing outcomes regularly.
In addition, it’s critically important to be aware of and prevent project and resource management mistakes that create problems in your workflow and hamper fruitful project work. Eliminating them will allow organizations to improve the quality of current projects’ delivery as well as provide them with growth opportunities. Let’s examine the typical errors in the section below.
Project and resource management mistakes that prevent companies from gaining profit
Overloading people with work
It may seem that when you need to deliver more projects, the team members should work more and faster. But without the right approach, it’s a great mistake that can lead to opposite results – delays, cost overrun, and even a project failure. If you give team members more work without taking their capacity and current workload into account, they will most likely become stressed, complete their tasks with mistakes that require rework, and eventually won’t be able to deliver the assigned scope of work. In other words, an overworked employee will become a bottleneck. In a multi-project environment, due to dependencies between projects, just one bottleneck resource can negatively impact the whole workflow and cause delivery delays and cost overrun.
Therefore, when a company wants to increase profitability, it should, first of all, make sure that the employees have enough capacity to complete the required scope of work and aren’t overloaded.
Poor risk management
To be able to complete more orders and increase a company’s profitability, the current workflow must be as seamless as possible. If there’s only one bottleneck, they will only multiply when the number of projects increases. To protect your workflow from possible threats, you should pay closest attention to proper risk management at the initial project stages. Being too optimistic regarding workflow progress and setting unrealistic expectations of project outcomes is a mistake – in addition to uncertainty that cannot be predicted, every project is exposed to risks. Without analyzing them and their consequences, you won’t be able to deliver current projects successfully and there will be no capability to implement more initiatives.
Tracking project progress and neglecting resource performance
Typically, project managers pay close attention to the projects’ progress. But in fact, this information will hardly provide them with the real state of a project environment. Despite the fact that tracking project progress is also important, the primary focus should be placed on resource performance. Why is it so important? Because the state of a project level is the direct consequence of what has been going on at the resource level. If the team members are struggling to complete their tasks on time, are heavily overloaded or, on the contrary, idle (not working at their available capacity), their productivity reduces, which will inevitably affect the project environment’s health. But the most important thing is that the effect of issues at the resource level will be reflected at the project level only with time, and it can become too late to fix the situation.
So, focusing solely on the project level won’t let you detect bottlenecks on time, which will lead to snowballing issues in the workflow. In this case, business growth and increasing profitability become questionable.
Lack of prioritization
When the amount of work to complete increases, the team members won’t be able to deliver all this scope successfully without the right prioritization. However, in a multi-project environment where a great number of people are involved in numerous projects, determining the highest priority work can be really challenging. In addition, prioritization can be affected by office politics and based on someone’s gut feeling or serve someone’s interests and needs. Of course, in these cases, it will be impossible to work efficiently and deliver the desired output on time and within budget. A lack of prioritization will negatively affect teams’ productivity, so taking more orders and increasing profitability will be out of the question.
Applying a deterministic approach
Oftentimes, companies stick to a deterministic approach to managing projects – as if everything is known in advance, and there will be no changes and uncertainty. Setting strict deadlines, adding no buffer to the timeline (budget, capacity), assigning tasks in such a way that 100% of employees’ capacity is utilized – these are typical mistakes that usually create difficulties rather than bring clarity and order to the workflow. Everything can go not the way it’s been planned, especially in times of crisis and persisting uncertainty. A lack of flexibility will lead to significant deviations from plans and timelines, which in turn will likely ruin the workflow and cause project delays and budget overrun.
Lack of capacity planning
One of the main prerequisites for a company’s capability to deliver more projects is gaining insight into resources’ future capacity – will there be enough people to deliver the required scope of work? Do the available employees have enough capacity to deliver extra work? When it’s not analyzed and planned in advance, it may lead to unplanned and unnecessary hiring, which will not solve the problem right away. Also, hiring and onboarding a new employee is a costly process, so before making such a decision, you should be 100% sure that you really need more people and all the available employees are most efficiently utilized.
Poor management decisions
Under conditions of persisting uncertainty multiplied by the economic crisis, making the right decisions is twice as challenging. If a project manager makes decisions with no regard to real-time and historical data, without analyzing the consequences of a certain decision, or what is worse under the pressure of influential people, the consequences will be rather unfortunate. Poor management decisions can lead to a variety of difficulties in the workflow, which will hamper the delivery of current projects in the pipeline, not to mention delivering more and increasing profitability.
Preventing the above-mentioned project and resource management mistakes as well as improving things when errors have been already made becomes possible thanks to the right technology, namely a multi-project resource management solution. Here’s how its functionality contributes to increasing a company’s competitiveness and profitability.
How a resource management solution helps increase profitability
Let’s review some of the opportunities provided by Epicflow, a multi-project resource management software solution.
Prioritization of work
The right prioritization is a must for work in a multi-project environment; this gains even more importance in times of a crisis, when the teams’ efficiency is one of the top priorities. Epicflow prioritizes tasks across the whole project environment and provides every team member with their personal prioritized to-do list. This increases employees’ productivity and contributes to the timely delivery of all projects in the portfolio.
In contrast to the deterministic approach that can derail your projects when any unexpected events occur, Epicflow provides you with maximum flexibility. For example, it doesn’t create any strict schedules; you can also move milestones if necessary, and it’s the project due date that matters. In addition, the system recalculates priorities in response to changes in the workflow, so the team members never lose focus on the most important part of work.
Protecting your projects from threats
Minimizing threats and negative risks is one of the main focal points in project management during a crisis. That’s why we at Epicflow pay closest attention to detecting and eliminating bottlenecks – they are sometimes unnoticed but negatively affect the workflow by reducing productivity and causing delays.
Epicflow’s functionality makes it possible to:
- Prevent future bottlenecks: the Future Load Graph predicts resources’ future capacity and workload so that you have a clear idea of possible threats and take timely measures to eliminate them;
- Detect existing bottlenecks: Epicflow’s Historical Load Graph provides historical data regarding resource groups’ output in relation to their capacity so that you can find what hampers the flow in a matter of minutes;
- Eliminate causes of bottlenecks: when you’ve detected a bottleneck, you can enable Load Analysis to find what resource groups have been overloaded and for how long.
Increasing resources’ efficiency
Increasing a company’s competitiveness and profitability is impossible without ensuring your employees’ efficiency. Epicflow contributes to boosting team members’ productivity in the following ways:
- By determining work priorities;
- By ensuring the right resource allocation based on people’s competences, capacity, and availability;
- By facilitating a balanced workload.
Making the right decisions
Making effective decisions is challenging and becomes even more complicated during difficult times. But Epicflow helps you reduce the decision-making uncertainty by letting you analyze possible scenarios. In its What-if Analysis mode, you can test different decisions, review their consequences, and choose the most advantageous option. For example, you can see how your project environment will change upon adding one more project. In addition, Epicflow’s Project Staggering feature can suggest the best time for starting a new project in accordance with the team members’ capacity, which will protect your current environment from bottlenecks and related issues.
Therefore, Epicflow helps companies increase the efficiency of their operations, optimize project costs, improve the quality of products/services they deliver, make more effective management decisions, and many more, which is critically important for business organizations that want to remain competitive and profitable during tough times.
To take a game-changing approach to project and resource management and ensure your organization’s sustainable growth without waiting for better times, schedule a consultation with our experts.