Why Resource Project Planning Capability is Important for A/E Firms
April 29, 2020
Effective project planning has always been important for architecture and engineering (A/E) firms. The stresses put on them by the COVID-19 pandemic have made it even more critical that they be able to schedule the time of their team members, keep the plan accurate, and use that information to make smart business decisions.
This is especially true since the government’s Paycheck Protection Program requires employers to maintain 75 percent or more of their workforce if they want their loan to be forgiven. Unfortunately, the time, effort, and hassle of project planning in many software packages tends to cancel out the potential benefits. And without accurate information on how many hours are left on a job, how much work each team member has on their plate, etc., project managers and firm principals are left struggling to decide what to do next.
A Sudden and Urgent Need for Better Project “Intel”
Before the pandemic, project planning was less of an issue. Firms were riding the wave of a strong economy and focusing primarily on simply getting the abundance of work they had completed and out the door.
Today, the landscape has changed. Most firms don’t have enough work to keep all their people busy, and they also don’t have enough data to know whether they need to reduce their workforce or if the work they have can be spread out to keep everyone reasonably busy. This situation exists for two primary reasons.
First, all of the knowledge about projects and client needs flows through a single person or small group of people who are responsible for scheduling. This approach creates a bottleneck and essentially “takes the ball out of the hands” of the people who are working directly with clients. So, when a client asks, “Can you get this done next week?” the person can only offer the lame reply, “I don’t know. I’ll have to check with our scheduler.”
How are firms responding to this situation? They tell us that they’re having regular meetings to talk about the status of active jobs and allocate resources to them, hoping that at least for the next week, things go as expected and the plan works. The problem is that one point of non-compliance with the plan (the client calls to request a change, an employee calls in sick, etc.) basically trashes the whole thing. That is, unless the firm decides to have someone constantly updating the schedule to hold it together. And they don’t. They just have people keep working, despite the fact that the schedule has been tossed out, and the project planning meeting takes on more of a long-term focus, because that’s all it’s good for.
The second reason that most software packages aren’t good about short-term project planning is that they operate under the fallacy that employees are interchangeable. Because there is always too much fluidity to assign specific people to jobs, firms use job categories instead. “This job needs two Architect 1 resources. This project calls for one Engineer 2.” etc. But, of course, no two Engineer 2s are exactly the same in terms of skills, experience, etc.
"Giving people more data access and more scheduling responsibility tends to produce greater engagement and a higher perceived stake in the firm's success."
How to Find “Best Fit” Solutions That Marry Workload and Available Resources
What do A/E firms need from a software solution to help them tackle the business challenges they’re facing today? They need to know which employees are crucial on a particular project, and who can be considered ancillary or entirely unnecessary on that job. Then they have to use that information when reviewing the expected future workload to determine what they’re staffing should look like.
What we’re telling smaller, “hub and spoke” firms that are using Factor AE is that it’s possible for one person to understand all the projects that are underway or planned. And if that’s the case, and that person has the discipline to get into the system regularly to update information, Factor AE can be very effective for project planning.
For example, when work is first being pursued it can be given a “potential” status. Then, if a proposed fee is needed in order to bid on the job, types of roles and the hours required can be added to the project. These jobs don’t initially get added to the overall company plan, but instead help inform the long-term view.
Once a proposal has been submitted and the potential client has been introduced to team members, those staffers’ names are added to the project and the hours originally assigned to a generic role now go onto that person’s schedule. Those architects or engineers become the cornerstone of the project. Their hours are locked into the overall company plan for as long as the job is scheduled, and they no longer have to be considered in short-term planning. Why require team members to stay on a project? Because clients don’t like firms that use “bait and switch” tactics, and avoiding that approach also helps the firm schedule more accurately.
Implementing Employee-Driven Scheduling
You’ve simplified life by removing the hours of employees who are the cornerstones of projects, and that’s great. But how can you more effectively manage the hours of others who might help with projects in a more minor role? What we’re recommending to firms is to implement employee-driven, distributed planning.
This approach relies on the frontline knowledge of the PM. They go to a team member and say, “We’re going to give you this task and it’s going to last four weeks and you’ll put in 30 hours a week on it.” And those hours go into the schedule. Then, once a week, the person submits their timesheet but also goes into Factor AE and updates their portion of the project plan with the latest information, which is a combination of what they got done this week (and what remains) as well as any additional work that’s been assigned to them by the PM.
With that kind of high-quality data available, firms can make more accurate projections and better decisions. Just by running a report in Factor AE, principals can see who truly is busy and who isn’t. Even for smaller firms that have more short-term projects, this approach can provide a fairly clear view of what will be happening for the next 4-6 weeks.
And because schedule management has been delegated to employees, PMs and principals don’t need to focus on how many hours people have on their To-Do lists. Instead, employees who see that they’re running out of work are responsible for talking with managers to find out what’s next for them. This can be a real game-changer (and stress reliever) for PMs and principals.
A Potential Downside to Distributed Scheduling
No business process is perfect, and that’s true of distributed scheduling as well. Giving employees access to information on what’s “in the hopper” can show them that, in some cases, there isn’t much, and that fact can cause concern. However, that concern is no greater than what arises when firms keep employees in the dark.
What we’ve found is that informed employees are empowered employees. Giving people more data access and more scheduling responsibility tends to produce greater engagement and a higher perceived stake in the firm’s success. Plus, it enables PMs to be much more efficient and effective in their work, from responding quickly to timeline changes to managing their budgets more accurately.
Yes, Project Planning Drives Better Results
On balance, the pros of project planning greatly outweigh the cons. So, when clients ask us, “Should we invest the time and money needed to schedule and track our resources more closely, our answer is an enthusiastic, “Yes!”
It takes a little getting used to, but the benefits you’ll enjoy once you get the hang of it can be significant. And should the economy slow dramatically again at any point in the future, you’re better prepared to make important decisions that will help your firm navigate that challenge.
Improve Your Project Planning Capabilities with Factor AE
Take steps to improve your firm's financial project planning. Get started today!