Three ways to master profitable project delivery
This article is written by Shresht Prakash, who is passionate about disrupting the Professional Services industry by focusing on delivering a great customer experience and a truly connected business on the Salesforce Platform.
Shresht explains that the rules of the game are evolving, ushering in a reality where the most successful businesses are not just about growth; they prioritise balance, sustainability, and the vital art of turning a profit.
The business world has undergone a remarkable transformation in recent years, leaving enterprises with a critical challenge: they must adapt to a landscape where profitability shares the spotlight with growth.
Gone are the days when companies could launch and scale on borrowed money, prioritising expansion at any cost. Icons of this decades-long era, such as Amazon, spent years in the red before achieving tech titan status. Today, rising interest rates are making investors more vigilant and demanding swifter profitability. The rules of the game are evolving, ushering in a reality where the most successful businesses are not just about growth; they prioritise balance, sustainability, and the vital art of turning a profit.
For the last two decades, many software organisations have operated in the grey zone, teetering between profit and loss. Their valuation was built on growth, and their professional services teams often ran at a loss, their primary aim to protect the brand and generate recurring license revenue through improved customer satisfaction. The landscape has shifted, requiring these teams to be profit contributors rather than cost centres.
For companies that deliver billable consulting and project services, there’s a call for a more well-rounded approach, one that values profitability as an integral component of a company’s worth.
The path to reducing spending
So, what strategies can organisations employ to navigate this transition effectively, and reach profitable project delivery?
In my experience, whether they’re delivering projects on-site or off-site, the best services businesses are disciplined about addressing internal weaknesses that threaten revenue recognition and profitability. They put the focus on efficiency and accuracy.
A successful project is built on strong foundations. Accurate estimating of elements such as cost, scope of work, deliverables and skills is paramount. Understanding and accounting for the hidden costs of service delivery, in terms of time, effort and resources, can prevent budget overruns, ensuring that services not only generate revenue but also consistently meet customer expectations.
Frequent changes can also lead to customer dissatisfaction and margin erosion. By getting the service requirements right from the start, businesses can avoid excessive change requests during the transition from the sales team to the delivery team.
Getting a better grasp on these hidden service delivery cost-sinks requires three key changes that I’ve identified through my experience at Certinia, assisting enterprises to do precisely that:
1. Optimising resource utilisation
Smartly allocating resources like personnel and materials to get the most value from investments – so you’ve got the right people, with the right skills, at the right time and for the right cost.
2. Breaking down silos
Encouraging collaboration and information sharing within the organisation by dissolving silos. Not having to operate with a mish-mash of software integrations reduces errors, removes time delays and eliminates the duplication of data.
3. Building organisational resilience
Developing the ability to adapt to challenges and unforeseen disruptions, ensuring long-term sustainability.
By streamlining operational efficiency, fostering collaboration, and building resilience, companies can navigate the shifting tides of industry expectations and emerge as not only profitable, but more resilient and successful than ever before.
In the next posts in this series, Certinia will dive deeper into how successful businesses are putting these strategies into action and achieving remarkable results through Professional Service Automation. In the meantime, reach out if you’d like to discuss how Certinia’s expertise can position you to meet your service delivery challenges.