Four key steps to optimize project management in consulting

As client expectations increase for higher quality project delivery at lower cost, consulting firms need to consider how to incorporate intelligence, agility and best practices as part of their project management strategy. Deltek’s new guide on project management excellence reveals four essential steps that drive better project outcomes.

In today’s competitive consulting landscape, consulting firms face mounting pressure to deliver projects on time, within budget and to the highest quality standards. Effective project delivery is essential as it directly influences a firm’s reputation, client relationships, profitability, and long-term business success.

The latest edition of the Professional Services Maturity report from SPI reveals that firms excelling in project delivery outperform their peers. In a recent study from Deltek, leaders view ‘minimising project delivery issues’ as one of the top five factors to boost profitability.

The new ‘Optimising Project Management’ guide from Deltek outlines how this objective can be achieved, by focusing on four project management best practices:

#1: Setting the Right Baseline

Ensuring project objectives and targets are set correctly should be the baseline for any consulting firm. This, in turn, determines the context for resourcing, scoping, budgeting, and planning. “Many projects fail because they weren’t scoped correctly, resourced effectively, or there was an overall lack of planning and estimating when the project was kicked off. By setting the baseline correctly, the likelihood of project success can be increased,” said Paul Tomlin, Senior Director Solutions at Deltek.

To ensure project success, a clearly defined and comprehensive scope, with formal sign-off, will help prevent scope-creep later in the project. Additionally, securing a signed Statement of Work (SOW), and setting key performance indicators (KPIs) to monitor progress in areas like budgeting and timelines will help keep the project on track and drive measurable success.

#2: Excellence in Project Delivery

Ensuring excellence in project delivery is critically important for consulting firms as it defines their ability to fulfil their promises to clients. According to Deltek’s guide, there are several factors that can drive this excellence.

First, high-performance project teams are far more likely to use a standardised delivery methodology which results in more projects delivered on-time, fewer project overruns and fewer project cancellations. Second, leading teams put in place a rigorous project execution administration, including tracking of time, deliverables, milestones, and more.

Other success factors include using a best-in-class project management tool to manage the delivery process, having reporting in place that can help project managers adjust plans, and having collaboration tools in place. Firms also need to have a governance setup to build in agility and flexibility across the project lifecycle.

#3: Manage Project Financials

Project managers need to ensure strong control over project financials, which includes several factors to consider.

For consultants, there should be a clear process for registering hours, expenses, and costs. This information sets the foundation for accurate invoicing. Although this may seem an odd task for project managers, their role is critically important, emphasised Paul. “The project manager should oversee the invoicing – with finance as the review and control point. Project managers understand the project status and timing and should be held accountable for it.”

This means that project managers should ensure invoices are sent in a timely manner, with all the right approvals in place, and contain the needed information for acceptance at the client side.

Together with finance, project managers should ensure that the SOW outlines the right contractual terms for the financials, including fees, payment terms, type of billing (fixed price, time & materials, or something else), the handling of expenses, and other agreements around pricing and result-based increments.

Clients meanwhile expect continuous insight into spending, and how that compares to budget and delivery progress. Deltek’s guide suggests five key metrics to capture this complexity: Baseline (the contractual budget), Actual (what is actually spent so far), % Complete (how much % of the project’s deliverables have been met), Estimate to Complete (how much is still needed to complete), and Estimate at Completion (the total of what will be spent upon completion).

“This is a basic way of managing progress on projects. Some consulting companies may use a more sophisticated Earned Value Management method, especially on major projects to avoid unforeseen risks.” explained Paul.

#4: Core Business Processes

Deltek’s guide highlights four business processes that are regarded as core for any type of consultancy or project – monthly control, invoicing, time & progress management, and staffing management.

At the start of the month, as part of the finance month-end-process, project managers should plan a review of project status based on; the value of Work in Progress (WIP), Time and Materials (T&M) and the percentage completion of the project (Fixed Price).

Invoicing should happen promptly when the work is done, or the invoicing plan payment date has been reached. “Project managers should ensure this is done at least every month, while finance teams should closely monitor payment and cash flow,” Paul explained.

To ensure efficient and accurate billing, weekly tracking of time & progress is key. “It is essential that time registration is completed by consultants every week, no later than a Monday morning. Once submitted, a secure approval process provides the accuracy required for project managers to follow up on progress against projects.”

The fourth core process is staffing. Project staffing should be updated consistently on a given day of the week, typically a Thursday. This leaves Friday to clarify any booking conflicts before the following week,” said Paul. Notably, resource planning is critical for short-term engagements or projects that face substantial risk and volatility, while for long-term projects, a weekly frequency may not be as necessary.

Conclusion

Good project management is at the heart of any successful consulting firm. And good project management is guided by these core principles. By embracing them, consulting firms can avoid common project pitfalls and elevate the maturity of their project delivery. This isn’t an easy task, but with the right steps, firms can better estimate project timelines and costs – and deliver higher quality work, faster, and within tighter budgets.