Measuring the Profitability of your Projects

Profit is not the legitimate purpose of business. The legitimate purpose of business is to provide a product or service that people need and do it so well that it’s profitable. – James Rouse

[otw_shortcode_dropcap label=”A” font=”Dancing Script” background_color_class=”otw-blue-background” size=”large” border=”border” border_color_class=”otw-silver-border” shadow=”shadow”][/otw_shortcode_dropcap]s a business, you may think that your projects are profitable. But how can you know for sure? Many business owners are shocked to discover that all their hard work is resulting in projects that are unprofitable. If this sounds like you, then you may not be able to foresee potential risks in the projects you are completing so that you can make changes.

Blind Business Management

Not having the insight that’s so crucial to remain competitive is something that affects many businesses. The retrospective data you may have may be recent, but what about the future? Without that data, you will never make changes to turn a project around in time.
The key performance indicators of your business are crucial to understand in order to increase your business’s profitability.

Structured Setup

Every project you do should be set up in such a way that enables the project to be effectively managed right from the start. This means ensuring a set scope for each project, and then reflecting this in a baseline project budget. This will form the control point for all project costs.

Don’t Stop Tracking Scope

It can be easy to lost track of project scope, due to new client requirements and tweaking. But if your project has a fixed price, any tasks not part of the original scope will cause additional effort and cost for which your team will not be paid.And this will impact the profitability of your project directly.


Control Costs

When you have a baseline budget, you are better able to track project costs. In all projects, the priority should be to control actual costs and balance them with the estimated costs in the budget. Full control over costs like working time on an ongoing basis will allow for successful overall cost control.

Evaluate Regularly

Every project should be evaluated in relation to your baseline budget. This will allow you to prevent and predict delays and overruns. It’s equally important to manage upcoming costs and add costs as they occur, as this will provide you with a clear idea of total costs at completion.

Increase Transparency

The data silo and decreased transparency are issues which exist within every business. This may be because many businesses still rely on manual methodologies to integrate their data. A project’s performance is difficult to forecast when there is no transparency between departments and teams.

Use Technology Made For Project Management

Many software solutions are very effective at managing business functions, but fall short when applied to managing projects. But using technology that’s business-driven can allow for a one-stop location where all project costs and cost controls can be submitted. The result is faster and more accurate project reporting.
When there is no need to spend time and invest effort into reporting on the data associated with a project, the focus can shift to the development of strategic process to increase the efficiency of projects.
Data that is being managed by project management technology also serves another purpose, which is to be problem-predictive. Knowing what could be on the horizon can assist with the development of a new course of action if required.


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