Will Your PSO Be Able to Meet Client Demand?

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Results of SPI Research’s 2014 Professional Services Maturity Benchmark™ Reveals Capacity Concerns: Find a Cure in Information Infrastructure

With near record growth rates, professional services (PS) executives continue their emphasis on increasing both revenue and profit. In SPI Research’s recent benchmark (the 2014 Professional Services Maturity Benchmark is available for free here) we have seen virtually every financial key performance indicator (KPI) near or at its highest level over the last five years.

Key Performance Indicator (KPI) 2009 – 2012
Avg.
2013
Annual revenue per billable consultant (k) $198 $205
Annual revenue per employee (k) $167 $180
Average revenue per project (k) $193 $224
Project margin for fixed price projects 34.2% 34.5%
Project margin for time & materials projects 34.8% 36.5%
Quarterly revenue target in backlog 43.9% 47.3%
Percent of annual revenue target achieved 90.5% 91.1%
Percent of annual margin target achieved 86.6% 88.8%
Revenue leakage 4.33% 4.10%

Can this level of profitability continue? There is no doubt that demand for professional services is nearing its all-time high, so the primary dilemma for PS executives is if they can meet client demand, and how they can use every tool at their disposal to manage growth, service delivery, and revenue effectively.

Over the past seven years of conducting the annual PS Maturity Benchmark SPI Research has learned that larger PSOs use a number of different business applications to run their business. Needless to say:

  • All use Enterprise Resource Planning (ERP) for financial management
  • Most (more than 90%) use Client Relationship Management (CRM) systems for managing clients and sales activities
  • And now most (more than 70%) of these larger PSOs also use Service Resource Planning (SRP) solutions to manage resources, project management, and other project related costs

What we’ve learned from this technology inventory is that in professional services, the ability to efficiently and effectively execute services goes a long way toward achieving growth and margin goals.

The Correlation Between SRP Tools and Improved Capacity-Related KPIs

In 2014 we are seeing the strongest correlation between organizations using SRP technologies and overall success in resource management, capacity planning, billable utilization, and other key performance indicators. As the table shows, organizations that utilize SRP grow faster, deliver services on time more often with less overrun, have a higher percentage of their workforce utilized and then ultimately drive higher revenue and margin metrics.

Key Performance Indicator (KPI) Use SRP Do not
use SRP
Year-over-year change in PS revenue 10.5% 8.8% 19%
Year-over-year change in PS headcount 8.4% 4.8% 73%
Concurrent projects managed by project mgr. 5.73 4.76 20%
Projects delivered on-time 78.8% 75.0% 5%
Average project overrun 10.3% 15.2% 32%
Billable utilization 72.5% 71.3% 2%
Annual revenue per billable consultant (k) $232 $190 22%
Annual revenue per employee (k) $192 $164 17%
EBITDA 18.1% 13.8% 31%

This success can be attributed to greater visibility provided by SRP. SRP gives PS leaders a better view of where they could have resource deficiencies, project delivery bottlenecks, or cost or time overruns. Obviously, with this visibility in real time, PS leaders can make timely decisions to reduce or eliminate service delivery problems. SRP integrated with CRM also enables PS leaders to understand the skills that are required going forward, giving the organization time to either recruit new employees, train current staff, or outsource specific functions.

SPI benchmark indicates that 2014 will be an exciting year in the professional services market. The only negative issue facing it is the need for qualified professionals to sell and deliver services. Every PS executive should have a thorough understanding of their current business as well as where they expect it to go over the next few years. Ensuring they have the right resources on board will make this growth much easier and profitable.

To learn more, there are a number of great resources available in response of the latest study:

Is FP&A Certification Right for Your Organization?

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An Interview with Association for Financial Professionals’ Brian Kalish (Part 2)

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In part one of this two-part interview, we learned what the first FP&A Certification program is and what it is designed to benchmark. Three years in the making, the Association for Financial Professionals’ (AFP) director, finance practice, Brian Kalish, has received a lot of advice and interest as he has spearheaded the program.

With these questions that conclude our time with Brian, I came away with a better understanding of the FP&A industry and the significance of certification for professionals and corporations alike.

Planview: So Brian, you’ve kicked off registration for the first certification testing set for August and September. I imagine you are pretty excited.

Brian Kalish: That would be an understatement. I have been energized by the enthusiastic response from so many people. It’s gratifying to see that all of this hard work is so well received from around the world.

Just yesterday I got a call from a man in Bulgaria who wanted to see if he could be a part of the first exam. I did a search on our testing center locations and was able to confirm that there were two testing facilities within an hour from him! I am not only excited about the reception, but that we are able to follow through with our goal for this to be an internationally-accepted program as well.

Planview: You had mentioned that it was an attribute of certification for the participant to illustrate a “world view” of FP&A protocols. Was a call from Bulgaria expected so soon considering where you are in the process?

Brian Kalish: I would say the international outreach has been on par with North America. After U.S. and Canadian enrollment, the third-largest demographic of enrollees has been from India.

Beyond that, we made it a point to reach out globally and make this an international benchmark. As mentioned before, one of the major aspects of developing the exam was to bring in consultants to evaluate each question for regional applicability. We did not want how we phrased a question to constrain anyone or illustrate a geographical bias. It’s an investment that serves our goal, to test a “world view” of FP&A practices.

Planview: Can you elaborate on what you call the “world view” of FP&A?

Brian Kalish: What I mean is that not only do we want to test an FP&A professional’s generalist understanding of the requirements they need to perform their jobs, we also want those standards to be as applicable to anyone with an FP&A title anywhere in the world.

When we surveyed our participants to create the syllabus and criteria for certification, we felt it necessary to convey that these standards are universally accepted.

Planview: It sounds like it is paying off in spades. Do you have a theory why there is such a strong international interest in certification?

Brian Kalish: I’ve had this conversation three times this week! It’s a good question.

I think I can sum it up to three things.

Firstly, AFP is a non-profit. We’ve got the background and history in developing certification programs, specifically the CTP. Our membership is international but more importantly, our domestic membership is internationally inclined. Just as they drove the CTP certification to be as universal as possible, our volunteers, survey takers, and constituents know the same has to be true for FP&A professionals.

Secondly, is the language component. There is no doubt in my mind that a certification program could be developed in any language. But it has become accurate to say that English is the language of Business and Finance. Terms, nomenclature and processes need to be standardized for all industries, and certification tackles that to a degree.

And lastly, when talking to individuals who are seeking certification, there is a sense that certification amplifies their expertise. I have been given the impression that in certain geographical locations, their higher educational institutions are received skeptically from employers abroad. Perhaps it’s because of unfamiliarity with the university. These people have expressed to me that certification would validate their education and make them more viable candidates in general.

Planview: Knowing what you know now, how would a person or company know if certification is right for them?

Brian Kalish: Because we are shooting for certification to be the standard for the profession, like that of the Treasury exam, I have seen two things happen recently that helps me grasp the question.

People are asking for certification in job listings. Certification technically doesn’t even exist yet, and yet I am seeing a “desired qualification” in FP&A job listings. This tells me that companies are seeking a benchmarking tool, a hiring tool, a set of expectations.

And on the other hand, I am seeing CVs that say something to the extent that they are taking the exam in August, they are already enrolled, or that they are part of the beta. It is illustrating a degree of ambition and commitment to their career choice. These people want to compete.

I think those two illustrations point to who should consider certification. Organizations need a standard, they also need a way to reward and retain key staff. Certification does that. Individuals need to stand out from the competition. They need a clearer path to promotions, and they need their bosses to know that they are qualified for the next step. Certification does that too.

Enrollment for the next period of certification exams is now open.

Go to www.FPACert.org to learn more.

I’d like to hear from you. What do you think about the new AFP’s FP&A Certification Program? Share by leaving a comment below.

Today’s PSO Market: 3 Concerning Trends and 1 For Your Radar

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The last year was a growth year for many professional services organizations and 2014 will continue to be so, especially in the USA and South America, driven by the improving economic environment. With year-over-year growth measurably beginning at the turn of the 21st century, certain topics often surface with regularity. Below are the three most prevalent topics that had me digging and researching to learn more to determine their validity. With each of these trends, I link to a report that I believe best, and most succinctly, reports on the topic for additional reference.

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Resource/Personnel Scarcity

Since 2010, the data has confirmed that the topic of STEM expertise scarcity (that has been discussed for at least a decade) is a real concern. Executives are growing more and more concerned — citing it as one of the most primary concerns in many benchmark reports. More so, year-over-year growth is now, finally, starting to illustrate the increasing shortage of talent. As cited in this blog post Three Ways for Professional Services Orgs to Tackle the Talent Cliff, by SPI Research, “It now takes longer to hire, train, and make employees billable. To couple with this added cost, we are seeing that professional services attrition is beginning to rise, and we expect it to reach nearly 20% in the next five years, meaning PS executives will face an increased challenge of talent management.” As predicted, this is partially caused by the number of professionals from the “baby boomer” era who are reaching retirement age.

To learn more, I recommend the terrific white paper, 3 Recommendations for Tackling the Talent Cliff by SPI Research.

The Sophisticated Client

Despite the market growth, PSOs are finding that they are dealing with an increasingly more sophisticated client who is demanding greater value for money from their investments and for projects to be delivered more quickly — reducing their time-to-value. A consequence of this is the greater focus on different ways to bill for services. The number of projects based upon the traditional method of “Time & Expenses” is reducing as clients push for more fixed fee contracts. However for a project to be fixed fee, it has to be fixed scope or there is a real danger of scope creep that would impact upon project margins.

The pressure for fixed fees and the shorter project timescales is resulting in an increasing need for PSOs to create packaged services, and for improved resource demand and capacity planning to maximise the value from their people.

Often automation tools are cited as a quicker solution for an organization to get clear visibility on how the client shift is impacting their project margins. While this paper describes this situation among a few other topics, I suggest reading TSIA’s (the Technology Service Industry Association) report, The State of Professional Services: 2013 for insight on how the Cloud, in particular, is pushing this sophistication and improving automation options.

Transitioning to Milestone Invoicing

The sophisticated client has more experience with a variety of professional services vendors, be it for their interactive marketing, product production, legal services, accounting, or outsourced projects. However a PSO plays into this world for the client, deliverable-based professional organizations have set a standard for a gated payment structure and the typical client is now expecting that.

For a PSO to successfully package their services for milestone delivery, invoicing and payment; there is a need to standardise their delivery approach for each service by defining processes and controls, creating templates and better sharing of knowledge and lessons learned. Greater consistency in delivery approach and quality will help to keep control over costs and therefore protect project margins.

As this transition has been progressively happening for the past decade there is not a lot of analysis on the state of particular phenomena. However, for additional insight I was a part of a webcast with NASCO recently that enlightened me to how a large PSO made this transition and the priorities and technologies they used to handle the big change. This informative webcast is 30-minutes long. It is called Changing the Game: From Time-Based Billing to Deliverable-Based Billing.

For the Radar: Value-Oriented Billing

This shared risk and reward approach to billing for services has been suggested for many years now– I remember this being tried whilst I was at E&Y in the late 1990’s. The idea that professional services organizations essentially invest in a project to deliver and to expect payment based on its performance is, of course, controversial. It’s a newer topic that is championed by only a few experts in the field and having an educated opinion on the subject is good for philosophical debate among peers or by the water cooler.

For value-oriented billing to be successful, it requires a true partnership between the client and the service provider; a good level of understanding of the clients business; and a clear set of metrics that allow measurement of success. It also has to be considered how other external factors that are outside the control of the PSO might impact upon these metrics. Value-oriented billing is likely to impact on revenue recognition as the success outcome may take months to achieve, whilst costs are still being incurred. This approach is clearly not applicable for all types of PSO or perhaps for those for whom the client relationship has just started but for firms of lawyers it is becoming more popular. However, for many project or service delivery professionals the concept is so foreign it’s been relegated to mythological…

For more information on Value-Oriented Billing, I found this article Pricing Services: Changing the Game (external website) very interesting.

I’d like to hear from you. What is your organization’s approach to tackling these trends? Share your thoughts by leaving a comment below.

FP&A Certification Is Here! Is Your Team Qualified?

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An Interview with Association for Financial Professionals’ Brian Kalish (Part 1)

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As the Association for Financial Professionals’ (AFP) director, finance practice, Brian Kalish has been a part of the invigorating discussion of the role of strategic capital planning in Finance. Especially, as it relates to competing for resources, talent, and priority from Treasury, Budget, and other lines of business.

Recently, Brian was instrumental in launching AFP’s FP&A Certification beta with great stories of individual and corporate interest from around the world.

In Part One of this two-part series, we take the time to learn more about the program and how AFP got to the point of planning 5,000 international testing locations for their very first exam – which is now open for registration!

Planview: Brian, thank you so much for helping us get a better understanding of what AFP is doing for Financial Planning and Analysis (FP&A) professionals. Tell us about AFP’s FP&A certification program.

Brian Kalish: Our inspiration was to approach that “chasm” in corporate finance between Accounting, Treasury, and Portfolio Management. All of those areas have great certification programs already such as the CPA, the CTP, and the CFA. However, FP&A does not.

What we’ve learned is that both professionals and corporate organizations are very receptive to this goal. For the professional, certification gives you a competitive edge. For the corporation, we’ve come to understand that they are seeking a tool, like certification, that can help them solve a number of challenges they are experiencing. Certification will help organizations make better hiring decisions, as it creates a strong training expectation, and it gives them a retention tool. We are seeing corporations express interest in certification as a way to make investments in their analytical team members.

Planview: Specifically, what can an individual expect from signing up and taking the certification exam?

Brian Kalish: Technically speaking, it’s a two-part exam. The entire exam is seven and a half hours long. We’ve contracted a control test proctoring firm, Pearson Vue (www.pearsonvue.com), which has locations around the world and will accommodate an individual’s schedule to take each part of the exam on different days.

The goal will be to provide a score to the professional beyond pass and fail on where they stand on a standardized understanding of the skills and abilities of a professional with between three and five years of experience. Certification will articulate that the individual can be considered a qualified generalist, with the “world view” of FP&A expertise.

Planview: How did you derive the exam, itself?

Brian Kalish: We’ve utilized our large base of volunteers, which is one of many reasons being a non-profit has served us so well. First, we started with a focus group of FP&A professionals from around the world to determine what FP&A is. From there, we surveyed 4,000 international practitioners with questions surrounding the criteria we built from the focus group, to be able to itemize a list of skills and abilities an FP&A professional with three-to-five years of experience should be able to do with confidence. Then we aggregated correlations between expectations and realities.

With the criteria in hand, we had several teams of volunteers create and vet questions. They needed to be able to refer specific text books so that we had recommendations for study literature. Then we needed to create several alternate questions because the test needs to change twice a year indefinitely.

We kicked off registration for the beta test which will be on February 1, 2014. This group is the validation of this hard work, three-years in the making.

Planview: So where are you now in being able to offer bi-annual certification exams?

Brian Kalish: As mentioned, February 1st is the beta exam. We have over 100% of needed enrollment for this exam that will to allow us to create a “cut score”. This will allow our team and consultants to evaluate each question for question bias, geographic applicability, language accessibility, and much more.

This test needs to be internationally useful, not only across industries but continents as well. I am pleased to say that the beta has participants in every continent except Antarctica. This was important for us and for our constituents.

By May 15th, we will have this data and the final tests results.

In Part 2 of this two-part series, we ask Brian about what he has learned about the industry from those interested in certification. The global influence not only surprised me, but Brian as well.

To learn more about the Association for Financial Professional’s FP&A Certification program, visit www.FPACert.org.

Three Ways for Professional Services Orgs to Tackle the Talent Cliff

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Year-Over-Year Data Points to Upcoming Resource Challenges – SPI Research Has a Plan

I’ve had the pleasure of working with SPI Research on the subject of how technology can support organizations facing and/or preparing for the challenge of resource constraints. The subject is close to my heart because PSOs inevitably have to continue to meet revenue targets with fewer talented people. The answer lies in getting better visibility of demand, automating processes and reporting as much as possible and managing margins, so that services can be delivered consistently and profitably… which happens to be my expertise.

To provide a little background, in anticipation of the 2014 PS Maturity Benchmark Report and Webcast (sponsored by Planview), the authors of the report suggested a repeated correlation between organizations using resource optimization software combined with tighter controls over billable utilization, reduced revenue leakage, and improved project margin.

SPI Research has since published Three Recommendations for Tackling the Talent Cliff and in demonstrating these findings; I participated in a SlideShare presentation explaining how this correlation is occurring.

Watch the SlideShare and let me know your approach to tackling the talent cliff within your organization. Leave a comment below and enjoy!

7 Informative IT PMO Resources to Leverage in 2014

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As we begin to tackle everything the New Year brings, I wanted to share this list of informative IT PMO resources from 2013 I thought you may find helpful as you work through your 2014 goals.

These resources feature best practices from IT executives in today’s leading organizations, trends from industry analysts, and our own resident expert and best-selling business author, Jerry Manas.

With 2014 well underway, we are finalizing our plans and are excited to provide you with timely content and actionable advice you can leverage to advance your PMO.

  1. [Analyst Report] Map Your Journey to the Future with Next-Generation Portfolio Management by Margo Visitacion and Kurt Bittner, July 15, 2013
    Access this report to learn how you can seize opportunities by making the most of your portfolio management tools not just at an operational level to help manage work, but also at a strategic level to optimize the use of scarce capacity across your portfolios and ensure alignment with your organizational objectives. This report is available until March 11, 2014.
  2. [On Demand Webcast] Portfolio Management in the Agile Enterprise
    Find out what Margo Visitacion, Forrester Research, Inc., Ryan Martens, CTO, Rally Software, and Patrick Tickle, EVP of Products at Planview had to say in regards to IT organizations’ increased use of portfolio management and agile methodologies to speed innovation.
  3. [CIO.com Article] Portfolio Management Isn’t Just for IT Anymore
    Read on about Hallmark CIO, Mike Goodwin’s perspective on using portfolio management in their consumer products group after successfully leveraging it in the IT organization for more than a decade.
  4. [On Demand Webcast] 5 Imperatives‏ for Your PMO – A Real World Perspective
    Listen in as Michele Mills, director, ITS Program Management Office at University of Utah Health Care shares real-world examples of how her organization is addressing 5 key issues in their PMO including managing resources and providing the right set of analytics and dashboards for key stakeholders, making their PMO an indispensable part of their organization.
  5. [White Paper] Bigger Than a Breadbox: 10 Tips for Better Project Estimates – Part I
    In this popular two-part paper, Jerry Manas offers a comprehensive and practical guide for improving your project estimates (featuring tips 1-5) with advice you can begin incorporating within your organization soon after reading the paper. Access Part II for tips 6 – 10: 10 Tips for Better Project Estimates – Part II [White Paper]
  6. [On Demand Webcast] If Napoleon Had Planview: Timeless Lessons in Portfolio and Resource Management
    Jerry Manas delivers a unique and lively look at how Napoleon’s army achieved breakthrough success against all odds by using methods in resource alignment, enablement, and communication that are startlingly relevant to today’s organizations. Now if only he’d had Planview… Find out lessons learned from Napoleon’s ultimate downfall and tips and tools for using portfolio and resource management for making an immediate impact in your own organization.
  7. [Analyst Report] 2013 Gartner Magic Quadrant for Integrated IT Portfolio Analysis Applications
    Access the report to learn why Gartner says, “The IIPA software market helps IT leaders link, monitor, analyze and communicate their activities on a single portfolio-level software platform, providing CIOs and other executives with holistic views of the IT portfolio while IT plans and executes in response to business and IT strategies.”

Are there any articles or industry reports that you have found to be particularly helpful as you kick off the New Year, but didn’t make this list? Please let me know what those are in the comments, I’d love to hear from you!

Four Picks on the Biggest Trend in Professional Services for 2014

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As it has been for the past several years, the concern over the state of professional services organizations has not been about if they are going to grow; but rather how. Since 2010, the state of the industry has seen double digit growth in personnel and revenues despite economic and political uncertainty.¹

Of the primary research published in 2013 to better understand this phenomenon, I’ve discovered a uniting theme: resource visibility. The idea that larger PSOs are finding better project margins by understanding how their billable personnel are being utilized is not new or strange. However, in 2013, the research was resoundingly consistent as to how more successful companies are using capacity and personnel insight to ensure year over year growth.

In response, I’ve collected the four most relevant and popular works from 2013 as a primer for 2014. While not definitive, these four were selected because they did a fine job of marrying this link to success stories in four unique mediums. There is a white paper, 30-minute webcast, SlideShare, and eBook that supports and articulates this trend in a variety of ways and all available for free via the provided link:

[White Paper] Three Recommendations for Tackling the Talent Cliff by SPI Research focuses on concerns over STEM talent scarcity and isolates tactics to overcome the shortage of billable personnel via the integration and collaboration of common tools within a professional services organization.

[Webcast] In this 30-minute recorded presentation, NASCO, a provider of claims processing services for national Blue Cross and Blue Shield Plans describes “Changing the Game: From Billing by Time to Billing by Deliverable”. When pressed to look internally to change their revenue structure they looked to integrate their work managers, finance tools, and business reporting to ensure they were billing enough at the right time with regiment.

[SlideShare] “How to Optimize the Productivity and Profitability of Resources” is a slide deck presentation (with audio) to discuss the three most actionable recommendations for professional services professionals as prescribed by the 2013 Resource Management and Capacity Planning Benchmark Study by Appleseed Partners

[eBook] Over the course of 2013, Planview sponsored a number of reports from the industry’s leading analysts and experts. The four most popular were published as an interactive eBook. In Enterprise Technology and Professional Services (that functions very much like a PDF but has been optimized for digital reading on your computer, phone, and tablet) you get these four papers:

  • Appleseed Partners, How to Optimized the Productivity and Profitability of Resources
  • SPI Research’s, Dwell or Excel: Leadership in Large Professional Organizations
  • Technology Services Industry Association (TSIA)’s, The State of Professional Services 2013
  • Planview’s, Your Project-Based Organization: Paper Airplane or Rocket Ship

With these works in your arsenal, you’ll glean next steps for your organization as how to improve margins, profits, and client delight in 2014.

¹Cited source: Three Recommendations for Tackling the Talent Cliff by SPI Research, November 2013

Long-Range Planning and FP&A: A Crash Course for 2014

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May 2013 Financial Executive Article: CFOs Need a Fresh Perspective on Long-Range Planning

Last year produced an amazing number of qualitative and quantitative recommendations for the FP&A professional. Early in 2013, Ventana Research and Financial Executive Research Foundation (FERF) published the first of its kind: New Benchmarks in Long-Range Planning. The comprehensive study spawned both an Executive Summary from Ventana Research and a complementary set of actionable recommendations from FERF among several other items including a webcast and some media attention.

As the annual budgeting process is winding down for many, now is a good opportunity to compile some of the best research as a strong set of reference materials to help you conceptualize a way to improve your processes, benchmark your organization, or to simply learn more about the state of the industry.

What you will find below are the findings by Ventana Research and FERF that have received special accolades or were particularly popular in 2013.

  1. PDF: Big F, Little P, and No A: The Current State of FP&A is Good Financial Management, Little Planning and No Analysis
    This white paper by FP&A automation expert, Madison Laird, reveals how Finance organizations can optimize planning and enable meaningful, ongoing analysis to help their organizations achieve goals.
  2. Blog Post: The Best CFO’s Drive: 6 Impactful Ways You Can Mobilize Finance Before the Annual Budgeting Process
    This article isolates six key drivers of long-range planning from the perspective of a veteran CFO, Rich Murphy.
  3. Video Series: Leadership and the Long-Range Planning Process: Problems Exposed. Solutions Revealed.
    This micro video series (of five videos each less than five minutes long) breaks down the 15 most common pitfalls of long-range planning and points you to a complementary white paper on the same subject.
  4. Blog Post: The Remarkable Reason Complacency for Spreadsheets May Reach Critical Mass
    This is a blog article written by Kerry Raminiak on the international and political spectacle caused by a simple spreadsheet error and why it’s even more important for Finance leaders to heed its warning.
  5. PDF: Steps to Improving a More Effective Long-Range Planning Process
    Ventana Research published this report to crystalize their formal research on long-range planning into a tangible set of specific recommendations.

May 2014 be your opportunity to usher streamlined processes and more accurate, timely and reliable to adapt your long range plan throughout the year!

Tips 6-10 for Better Project Estimates

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In my blog post, 10 Tips for Better Project Estimates, I introduced the white paper by best-selling business author, Jerry Manas, titled Bigger Than a Breadbox: 10 Tips for Better Project Estimates — Part I, which outlines five out of 10 suggestions project managers should consider when estimating projects. Effective estimating drives project success, better resource planning, and portfolio alignment. Without it, impacts can extend far beyond the task or project and can affect the entire portfolio, resulting in misuse of organizational resources. As a quick recap, Part I outlines helpful tips around:

  1. Estimation methods and timing considerations (Accuracy versus timing)
  2. Bigger Than a Breadbox: 10 Tips for Better Project EstimatesAddressing risk during planning (Managing uncertainty — traditional and agile approaches)
  3. Estimating mega-projects (Capital considerations)
  4. Special considerations for Agile (Different methodologies to employ in creating estimates)
  5. Resource management issues (Contributor estimates, earned value, and earned schedule)

The latest white paper rounds out tips 6 through 10:

  1. Planning for resources (Ensure resource availability)
  2. Estimates that mitigate risk (Include management reserve and contingency reserve)
  3. The mega-project (Have a separate project for estimating mega-projects)
  4. Using multi-point estimates (Consider multi-point estimates based on risk)
  5. When bad things happen anyway (and they do) (Don’t forget the other reasons projects are late)

I encourage you to read both Part I and Part II to determine where your organization can make improvements. Get your copy of Bigger Than a Breadbox: 10 Tips for Better Project Estimates — Part II and access a complete summary of tips on page 6.

I’d like to hear from you! After reading the papers and/or summary, let me know if the tips were helpful or if you have any tips of your own to share with your peers.

Is Your Long-Range Plan Ready For 2014?

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Revisiting the Latest Benchmarks for Long-Range Planning with Improvements in Mind

In February of 2013, Ventana Research and the Financial Executive Research Foundation (FERF) published their latest cooperative findings that for the first time, benchmarked the processes and technologies used in the long-range planning process. With data from nearly 300 organizations, most with more than 10 people in the Financial Planning & Analysis (FP&A) team; larger Finance operations received insight into best practices.

To revisit the major articles that came out of the research findings, we’ve published the first 10-minutes of the findings webcast via this SlideShare.

With some special insight, I can say that slide 7, Key Takeaways of the Research, is what has inspired so much additional conversation.

Watch the remainder of New Benchmarks for Long-Range Planning.

Have You Identified Next Steps?

Three reports from three different perspectives align with the "takeaways" prescribed by Ventana Research.

  1. From Ventana Research directly, they wrote Steps to Improving a More Effective Long-Range Planning Process which was designed to elaborate specifically on the ten takeaways described in the webcast. Download this special report.
  2. When Financial Executive Research Foundation (FERF) began evaluating the research, they published this FERF Alert on Long-Range Planning: Steps to Develop a More Effective Process. Download this issue advisory for financial executives.
  3. From a CFO perspective our Executive-in-Residence, Rich Murphy wrote CFOs Need a Fresh Perspective on Long-Range Planning for Financial Executive Magazine. Download this prescriptive analysis for the CFO.

As the calendar and budget year quickly approaches, all three reports suggest that every organization should seek out to improve their long-range plan. The most common theme, whether empirically described in the Ventana report, analytically elaborated upon by FERF, or from a leadership perspective as written by Rich Murphy; if you are not using an accurate and instantaneous view of your capital investments, you should prioritize that improvement much sooner than later.

Is improving your long-range planning process on your wish list? Comment below on how you think it would be best to get started for your Finance team.