If you’ve ever tried to measure a project’s performance, you’ve probably experienced the difficulty in deciding which metric really tells the story. Metrics can be anything from the amount of rework to adherence to schedule to client satisfaction to time-on-job (TOJ). All of those take skill on the employees’ part and can sometimes be hard to accurately measure. But there’s one place to improve your numbers without changing anything about the project itself – more accurate time-keeping.
Many firms in the A/E industry use software for time and expense data entry and invoicing. Having this data available is critical for identifying where you are, projecting where you’re going, and can also be juicy information for future projects. Looking back at past projects and performance can give good insights into actual project costs. Information can be used for anything from pricing new projects to seeing patterns and even assessing a particular team or team member’s performance. It is crucial that you have good data in order to get a good look at the performance.
Financial project performance is difficult to ascertain along with the project’s actual success because not only is it affected by subtle changes in external factors of the project, it also has several internal – and often intangible – variables such as staff abilities, billable rates, scope creep, value-added service, schedule slippage, rework and more. They all take rigor on the part of the project manager to keep in check.
Time and expense based projects are a great example to study. All direct and indirect expenses charged to the project get billed to the client, typically up to an agreed-upon amount. It is very easy to determine project success, and even the client can see if it was a success: did the number of hours billed stay below the quoted maximum? If yes, then the project was a financial success. With each hour having a set amount of overhead and profit built into it, the profit is easily determined. Assuming everyone on the project team accurately billed their time. And this can be a very big assumption.
Lump-sum project success can be more difficult to measure because the bills to the client are on a percent-complete basis. You and your client have agreed that he or she will pay you X for Task Y. Team members bill hours to the project, knowing its lump sum and the client will never know how many hours they billed. A staff member’s mindset may be this: I need to bill as many hours as possible so I may get a promotion at the end of the year. And if utilization is a term your firm uses to review the ratio of direct bill hours to total hours, that staff person may be even more inclined to bill more time to a project than to overhead. Or even worse, that employee maybe wasn’t as productive working from home as he/she should have been but wants to cover it up. All selfishly improving his or her own documented performance. Unfortunately for the organization and the project manager, these hours added up and cut into the potential profit.
You as the project manager should be monitoring your staff’s time-keeping as closely as your clients satisfaction and your project schedule. As a project manager, you’re the leader of the group and set the tone for how the project will go, and that it’s the team’s responsibility to make it a smashing success. It’s your job to convey to everyone on the team the importance of accurate time-keeping and how it will benefit everyone, not just yourself because you’re the project manager.
For starters, you should expect everyone on your team to be completing a timesheet or documenting their time every day and not waiting until the due date. Four main reasons why doing your timesheet daily is so critical are:
- Your memory. Monday mornings are hectic getting back into the swing of things. You’ve just spent two days not thinking about work. And now you’re trying to recall what you did a week ago, in detail. This is not a realistic expectation because, let’s face it, we all forget.
- It cuts into your workday. Taking an hour to hurriedly do your timesheet on Monday just delays you starting to actually be productive and get the week going. Don’t use this as an excuse to just ease into the week. Time is your most valuable resource and you should protect it with your life.
- Discipline. Those who practice good time-keeping are diligent and disciplined. And this is a habit that can be translated to other components of the project or the work environment, and prove to be money-savers.
- Awareness. Once staff becomes more responsible and diligent with their time, they can see where there is lost productivity and begin to improve in other areas, and potentially increase output and efficiency.
Poor time-keeping can result in lost profit without you even knowing it. A little bit over a long period of time can add up to measurable amounts. Sloppy time tracking can wipe away any profit you hoped to eke out of the project. For example, on a $15,000 project that lasts 8 weeks, you could see a 4% improvement in profit just by team members tightening timesheet accuracy by just 30 minutes less each week. It really is that simple.
In Darren Hardy’s book The Compound Effect, he discusses how small steps can make a big impact over time. He uses an example of two friends, one decides he will reduce his calorie intake by 125 calories and the other decides not to change. Over a long period of time, the first friend is in significantly better shape than the second with just a seemingly small adjustment. Another example is pumping for water. Many people give up after a few pumps when only a drip of water comes out of the spigot. But the person who keeps working over time gets a gushing flow of water and the level of effort required for pumping goes way down.
It’s everyone’s responsibility to make the company successful. Accurate time-keeping is just one small and simple way that everyone can chip in to improve numbers and keep profitability looking good without making any changes to the project itself.
Next time you’re closing up for the day and ready to head home, take a few minutes to document time. Rather than put your pencil down for the day, go ahead and mark it in your accounting software to save you that one step later. If this could save 4% profit on a project, imagine what other things you can do to squeeze out a little more efficiency. That profit just might end up in your pocket at the end of the year or earn you that next big promotion.