Where information means insight


Why It’s Time for AEC Firms to Get Serious About Agile Project Management Practices

by Lucas HaydenA/E, AEC, Budgeting & Forecasting, ERP Software Best Practices, Project Management, Resource Planning

Nov 15, 2021

As smoothly as many architecture, engineering and construction (AEC) firms have adapted to the realities of doing business during a pandemic, and as plentiful as the opportunities for project work are heading into the new year, there’s plenty of reason to believe that 2022 will be even better for AEC firms than 2021 was. The X factor in that outlook, of course, is the intense competition for new business. To capitalize on those opportunities, firms must find a competitive edge. Gaining that edge, and keeping the pipeline full and moving bottleneck-free in 2022 and beyond, could well come down to how a firm manages its project data, and specifically, its forecasting. To aggressively pursue new work in the current business environment, AEC firms need to be really good at resource management, project scheduling and forecasting. For many firms, however, that’s not necessarily a strong suit. In Unanet’s recently released AEC Inspire benchmarking report [available free to download here] 57% of firm decision-makers identified forecasting as their most difficult project management challenge. What this suggests is that AEC firms with strong forecasting, planning and resource-management chops — in short, those that are more agile in their approach to project management — will have an edge in the success of current work and the pursuit of new business. The more real-time insight that firm leaders have into project planning, and scheduling, and the resources required to complete their project backlog, the better equipped they will be to gauge resources, prioritize new business pursuits accordingly, and ultimately land the types of projects that their firm covets. Agile, data-driven project management practices (the Project Management Institute lately has elevated the athleticism of that metaphor to “gymnastic”) are the key to unlocking not only new business growth but also new efficiencies that go right to the bottom line. That agility comes from better forecasting and analysis in areas like budgeting, resource allocation and scheduling. Based on Unanet’s deep experience supporting AEC firms with the data-forward, insight-generating capabilities to implement agile project management practices, here are several guiding principles to point your firm in the right direction: Treat people as your most valuable resource. The common denominator for highly effective project teams is individual engagement with a common goal. To build project teams full of engaged people that function as an agile whole, firms and their PMs need to know their people and the specific hard and soft skills they bring to the mix, then leverage that knowledge to ensure they have the right resources on the right projects. Get started, then iterate. As an undertaking that spans all areas of an AEC business, achieving resource management maturity takes time. A good starting point for project managers is to adopt initial deliverables, then iterate from there, so they begin adding value to a project, teams and customers. For example, if you are not able to schedule your team out in detail, begin with higher-level month-by-month scheduling. Schedule for the quarter ahead, compare your scheduled to actuals worked, draw conclusions, then apply that learning to the next quarter. Wash, rinse, repeat! Collaborate around feedback. As you begin to leverage a more data-driven approach to project planning and resource scheduling, invite feedback early and regularly. Work with your internal customers first, then, as appropriate, engage your customers to ensure you are meeting their expectations from a service and deliverables perspective. Roll with the changes. Change is the one certainty in the AEC business. Change orders, reprioritizations, unanticipated leave or team-member departures, the weather — all these can impact a plan. A firm’s resource management and scheduling processes and systems should be flexible enough to readily accommodate changes on the fly. What does that mean in practice? Just like it’s easier to steer a moving car, once you are underway with your scheduling practice, you can ebb more easily, and flow as needed. And with a broader, more forward-looking view of your book of work, changes become easier to absorb. By embracing a data-centric approach to project planning and resource scheduling, firms and their project managers give themselves a distinct edge in forecasting, making better-informed, more agile decisions, greater ease in load-balancing resources with projected needs, and improved project performance overall. They also put themselves in a strong position to aggressively pursue new business and stay ahead of the hiring curve. While other firms with less forecasting savvy wrestle with unforeseen project overruns and issues with talent retention due to burn out, those with an agile approach to project management stand to capitalize on a surge in new AEC business that could sustain them for years to come. Thanks for reading the first post in Lucas’s blog series for AEC firms about translating agile project management practices into improved project outcomes, better pipeline management and more new business wins. Check back soon for the second post in the series.


Project Planning: Estimate, Budget, and Forecast

by Kim KosterBudgeting & Forecasting

May 10, 2019

What is Project Planning? – Estimating New Work (Proposal) The project planning process starts with a proposal estimate. Taking the time and effort to make a great proposal plan is a sure way to give the executing team the best shot for project success. The proposal estimate will have scope, schedule, and a cost. Understanding the scope is the first step. Utilizing a statement of work (SOW) or any document from your customer with the work required will establish the scope to be bid. Missing work can lead to schedule delays and cost overruns. Scope comprehension is hard when timelines to submit proposals are short. Associated with scope are the resources needed to execute and when those resources are available. The when and who make up the schedule and the cost portion of the estimate. Since your projects may be similar it is also advised to have a tool that can clone, utilizing a template, the project information, tasks, timelines, and the budget or estimate. Steps for completing the project proposal estimate: Understand the scope. Scope comprehension is the key to accurate estimating Utilize the project template to clone or populate the project information, the past estimates, and the timelines for the tasks Establish a work breakdown structure (WBS) Estimate the resources needed to complete the work Understand the timing of needed resources Include all materials, services, and travel required Time phase the estimates Ensure that the right skill set is available when you need them Use To Be Determined (TBDs) if the name of the resource is not yet available Gain buy-in from the proposal team and the functional departments before submission to the customer. Once the proposal is sent to the customer and negotiated, (YIPPEE, you won the project!!) it is handed over to a project manager to execute. Since a great project proposal estimate was developed by following the steps above, the project manager now has clear defined scope of work to execute, and an achievable resource plan with currently available resources. Work Breakdown Structures (WBS) A WBS is a hierarchical decomposition of the work to be accomplished on a project. It is typically outcome or product based and should make the management of scope, schedule, and cost much easier. A WBS should be created in the proposal phase of the project. During the proposal phase the WBS may stop at the task level. It is during execution that the detail is added to the WBS. const t="undefined"!=typeof HTMLImageElement&&"loading"in HTMLImageElement.prototype;if(t){const t=document.querySelectorAll("img[data-main-image]");for(let e of t){e.dataset.src&&(e.setAttribute("src",e.dataset.src),e.removeAttribute("data-src")),e.dataset.srcset&&(e.setAttribute("srcset",e.dataset.srcset),e.removeAttribute("data-srcset"));const t=e.parentNode.querySelectorAll("source[data-srcset]");for(let e of t)e.setAttribute("srcset",e.dataset.srcset),e.removeAttribute("data-srcset");e.complete&&(}}{"image":{"layout":"constrained","backgroundColor":"#f8f8f8","images":{"fallback":{"src":"/static/378b589522f05c8727ecfa60dca774dc/2b97f/WBS-chart.png","srcSet":"/static/378b589522f05c8727ecfa60dca774dc/2bf60/WBS-chart.png 276w,\n/static/378b589522f05c8727ecfa60dca774dc/20c46/WBS-chart.png 551w,\n/static/378b589522f05c8727ecfa60dca774dc/2b97f/WBS-chart.png 1102w","sizes":"(min-width: 1102px) 1102px, 100vw"},"sources":[{"srcSet":"/static/378b589522f05c8727ecfa60dca774dc/e6601/WBS-chart.webp 276w,\n/static/378b589522f05c8727ecfa60dca774dc/166ad/WBS-chart.webp 551w,\n/static/378b589522f05c8727ecfa60dca774dc/fabb9/WBS-chart.webp 1102w","type":"image/webp","sizes":"(min-width: 1102px) 1102px, 100vw"}]},"width":1102,"height":398},"alt":"","className":"wp-image-33628 aligncenter inline-gatsby-image-wrapper","data-wp-inline-image":"1"} As you can see from the visual, the work is broken down into manageable chunks. The advantages of utilizing a WBS are below: Work is broken apart, so task management can be spread out amongst the project team Provides a visual representation of the project Provides the structure for scheduling, costing, and reporting on the project Gives a repeatable backbone for future projects Helps with scope management—comprehension in initiation phase and minimizes scope creep in execution Scope, Schedule, and Budget Scope comprehension is one of the toughest activities that both a proposal team and a project team must tackle. It sounds simple, but with complex projects it can be difficult, because clarity of what will be delivered and what outcomes are expected are often not adequately described. Associated with scope are the resources needed to execute and when those resources are available. Scope is tracked in a document called a statement of work (SOW). The SOW gives the teams the bones of the project and typically it has a reference number with each requirement. The reference number makes it easy to track. In fact, the SOW reference number can be attached to a task, subtask, or work package so that with a simple report, you can cross reference to ensure all scope is covered. Scope creep is a continual problem and you must work hard to avoid adding scope without the associated budget and authorization. A robust change management process will help keep that from happening. Make sure your change management policies and procedures are up-to-date and that the teams have had role-based training to understand their part in the process. Since your projects may be similar, it is also advised to have a tool that can clone, utilizing a template, the project information, tasks, timelines, and the budget or project proposal estimate. During the proposal phase make sure you have a thorough scope review with all stakeholders in the SAME physical or virtual room. If you miss scope during the proposal phase the impact will be passed down to the execution team. Missing scope on a contract takes money right out of your pocket so make sure you understand what your customer wants. A proposal and a project schedule are a must. The task need-by dates establish the schedule that provides the basis of the cost. In a professional services company, the budget and resultant cost are driven by PEOPLE so our next section is on planning your resources. Resource Planning “Right People, Right Time, Right Task.” This is especially true in professional services firms where people are the primary driver of revenue, and the primary contributor to cost. People really are the most important asset a company has, yet so many companies struggle to truly manage this resource. Many times, resource planning is done too late in the process to make a difference and the result is behind schedule and over cost projects. Even if proposal and project managers want to plan their resources, the reality is that most resource planning is done ad-hoc with Excel files at the project level. There is no consideration of skills or what other projects need, and there is no clue what new work will require from a resource perspective. Below are 7 simple tips to help increase the efficiency of managing resources across the enterprise: Have a centralized repository for all resource plans that is accessible for all stakeholders Create a skills catalog so that the right resources will be available when (and where) you need them Forecast resources throughout the project lifecycle, don’t just start at contract award Use a single pool of resources across your company, not just on one project or portfolio Plan at the project level and roll-up to the enterprise—do not forecast by department only Provide stakeholders real-time resource demand and Key Performance Indicators (KPIs) reports as well as role-based dashboards Don’t plan your most important resources on disparate Excel spreadsheets Project Planning: The Importance of a Tool That Provides Real-Time Data Use a tool that enables all project stakeholders to visually see the availability, utilization, and time phasing of the resources. This level of visibility and control will help maximize overall performance and profitability of the project because clarity of what will be delivered and what outcomes are expected are often not adequately described for all stakeholders, but critical factors against which the success of the project will be measured. const t="undefined"!=typeof HTMLImageElement&&"loading"in HTMLImageElement.prototype;if(t){const t=document.querySelectorAll("img[data-main-image]");for(let e of t){e.dataset.src&&(e.setAttribute("src",e.dataset.src),e.removeAttribute("data-src")),e.dataset.srcset&&(e.setAttribute("srcset",e.dataset.srcset),e.removeAttribute("data-srcset"));const t=e.parentNode.querySelectorAll("source[data-srcset]");for(let e of t)e.setAttribute("srcset",e.dataset.srcset),e.removeAttribute("data-srcset");e.complete&&(}}{"image":{"layout":"constrained","backgroundColor":"#f8f8f8","images":{"fallback":{"src":"/static/aad1f6769d0f62a88611327e0a99f683/69ce2/resource-chart.png","srcSet":"/static/aad1f6769d0f62a88611327e0a99f683/a1502/resource-chart.png 128w,\n/static/aad1f6769d0f62a88611327e0a99f683/513b2/resource-chart.png 255w,\n/static/aad1f6769d0f62a88611327e0a99f683/69ce2/resource-chart.png 510w","sizes":"(min-width: 510px) 510px, 100vw"},"sources":[{"srcSet":"/static/aad1f6769d0f62a88611327e0a99f683/8bfea/resource-chart.webp 128w,\n/static/aad1f6769d0f62a88611327e0a99f683/236ae/resource-chart.webp 255w,\n/static/aad1f6769d0f62a88611327e0a99f683/6363d/resource-chart.webp 510w","type":"image/webp","sizes":"(min-width: 510px) 510px, 100vw"}]},"width":510,"height":403},"alt":"","className":"aligncenter wp-image-8373 inline-gatsby-image-wrapper","data-wp-inline-image":"2"} Resource Management Basic Information Metrics for resource planning/management MUST be real-time. Old data will not help you make great decisions, and can result in very costly ones. At a minimum, you should be able to answer the following questions: What utilization do you need to be profitable? What utilization should you aim for to avoid burnout? What is your actual billable and non-billable utilization? Is your project probability up-to-date so that your people forecasting most accurately reflects the most likely billable revenue and utilization? Estimate-at-Complete (ETC) As the project progresses things will change from the original plan. A key resource may win the lottery or be needed on a higher priority project, and when this happens the forecast must be updated. The EAC is the total actuals expended on the project + the dollarized time phased resources needed to complete the work. That time phased resource plan for work to be completed is called the Estimate-to-Complete (ETC). EAC and ETC can’t live without each other. EAC = Actuals + ETC The EAC is a forecast of the project’s cost when the work is complete. Throughout the project plans may change, the resources may change too, and it is the responsibility of the project manager to revise the work and replan tasks to best accomplish the end goal. Master the Project Planning Process with Unanet ERP software like Unanet can help streamline your entire project planning process, from estimate to budget to forecast. Our project management system is a single solution filled with invaluable tools that provide real-time insights and data to get your business where it needs to go. Learn more in our eBook, Selecting an ERP for Professional Services, and our white paper, 9 Simple Steps to Convince Your Leaderships to Adopt Project Portfolio Management (PPM).


8 Tips to Budgeting for Project Based Organizations

by Kim KosterBudgeting & Forecasting, Professional Services

Apr 21, 2019

Budgeting for Project Based Organizations One of the most challenging activities performed by a company is budgeting. Every year there is a large investment made to create annual budgets. So, what is the role of a budget? It should represent what the business believes is achievable and what it intends to accomplish. The organization establishes a budget that becomes the baseline for performance management. A large investment is made by many within the organization, so there are a lot of moving parts. Follow the 8 tips below to create a budget that is a useful tool for your business: Kick-off the budgeting cycle, providing a timeline, parameters, and overall goals. Include all stakeholders. Establish clear guidelines for the budget process. Below are just a few examples: What is the horizon of the forecast? What are the due dates? How to handle proposals in the forecast? What is the growth rate expected? Make sure your organization has a tool that provides all stakeholders with the visibility and control they need over the budget. The budget should be time-phased and align to the timing of the work. Scenario modeling is critical to understanding the best case, most likely, and worst case scenarios. A tool that allows for what-iffing or modeling is a necessity. Account for rate differences whether they be OH, G&A, COM, or Labor Rates. Make sure your tool is flexible enough to account for project specific rates, ceilings, and budget as well as forecasting rates. Throughout the year hold monthly reviews where the budget is reviewed, and course corrections are made via a forecast. Understand that the budget is a living and breathing document…not a static metric that is put on the shelf. Update it for changes in your business environment. Budget Revenue Budgeting revenue is crucial as it drives many other metrics (profit, growth rates, etc). The revenue plans are the barometer of your company health. The revenue plan will contain awarded contracts and opportunities that are still in the pipeline so make sure both are included. Tips for revenue budgeting are below: Look closely at your pipeline for new opportunities. Understand how your profit is trending. Labor vs Subcontractor – examine closely. Examine backlog, breaking it out between opportunities and awarded work. Benchmark your expenditures with prior years. Look Closely at Your Resources People are by far the biggest investment and in turn it is the largest revenue generator for services-based companies. Resources should be managed during the entire project lifecycle including proposal, project initiation, execution, and closeout. Measuring the utilization of resources is critical and below are a couple of questions you should be able to answer. What utilization do you need to be profitable? What utilization should you aim for to avoid burnout? Understanding billable and non-billable utilization? Project probability in people forecasting to more accurately understand both billable revenue and utilization? Indirect Rates are Pivotal The management of indirect rates can be the difference between winning a bid, losing a bid, making profit, and the ability to grow. It is critical to have the ability to look both at the actual rates being charged as well as bid rates to determine profit by resource. Often proposed rates will be different than actual rates, budget rates different than forecast rates, forecast rates are different year over year, and having the ability to apply multiple rate scenarios to your direct cost is very valuable in helping you create your forecast. Rates play a big role in revenue baseline assumptions. For instance, if your overhead rates are less than you predicted on Cost Plus projects, the actual revenue recognized will be less. On Fixed Price projects, higher than anticipated rates will eat into planned profit. Having revenue forecasts for the 1-5 year horizon will help the finance team more accurately predict corporate or forward pricing rates. Managing rate forecasts is important for all contract types and communication of rate changes to project and proposal teams will help eliminate a rate impact surprise. Below are a couple of pointers for indirect budgeting: Don’t forget to budget your indirect costs. Look at labor utilization to better understand the indirect component. Do you have a system that will handle cost pools and allocations? Understand your sales forecast and demand for resources. Hope these tips helped spark new ideas for your budgeting process and gave you some new things to think about! Learn more about how Unanet can improve your budgeting and forecasting practices.


What to Look for in Pipeline Management Software

by Kim KosterBudgeting & Forecasting

Apr 09, 2019

Your project based company’s pipeline is invaluable for your growth, so managing it properly should be high priority. With everything else in your enterprise that needs organization, however, how do you make sure your pipeline gets the attention it deserves? Some organizations may struggle with dedicating enough people, resources, and time to closely monitoring their pipeline, which means they miss out on gaining valuable insights that they can use to vastly improve their sales. If this describes your organization, you could benefit greatly from pipeline management software. In this blog, we will explain the benefits of using pipeline software as well has how to find the right tool for your business.   Why Use Pipeline Management Software? How exactly can pipeline management software help? Being able to measure your pipeline health will give you a depth of insight that only few companies enjoy. This insight will help to understand the past, current standing, and a view into the long-range forecast. Having real-time reports and dashboards gives all stakeholders actionable information to make decisions for their role and level in the business.   What Features Should a Pipeline Management Tool Have? Keep in mind that not all pipeline management software will give you the features and data that you need. Shopping around requires a keen eye and strong understanding of what characteristics will most benefit your organization. Although no two companies have the exact same needs, a pipeline management tool that serves as a good one-size-fits-all solution will be able to do the following: The tool is 100% integrated with the project based ERP system you select Customer Relationship Management (CRM): track your customer interactions Contact categorization for easy reference (decision maker, geographic location, golf buddy, etc.) Workflow optimization, assigning tasks and providing notification Opportunity tracking by phase Easy-to-use reporting, dashboards, and metrics to direct business decisions Real-time data Project notes and code fields for unparalleled analytics Resource demand planning with both current and TBD resources Ability to shift forecasts to the right or left Ability to make POA adjustments as opportunities move through the funnel One-click transformations from proposal project to an executable project Cloud based system so there is 24/7/365 access to your information   Important Pipeline Management Metrics to Look for In addition to the above key characteristics, an efficient pipeline management tool will have valuable metrics that allow you to take your pipeline management even further. With these metrics, you can pay attention to crucial details that may make all the difference between a Closed Won or Closed Lost. Pipeline Snapshots (comparing the pipeline to the same time last year, quarter, month) Bid to Win Ratio = # of bids/# of wins Bid to Loss Ratio = # of bids/# of losses Length of the sales process = number of days from identification to contract award Phase statistics—what types of opportunities are in each phase, customer, etc. Labor Utilization Skill Set Utilization Revenue targets by region, portfolio, customer etc. Rate analysis by year Forecast comparisons utilizing POA or other % forecasting methodology   Gain Real-Time Visibility of Your Pipeline with Unanet’s Pipeline Management Software The health of your pipeline correlates to the health of your business, so why take any chances when it comes to your pipeline management tool? Unanet is an all-in-one ERP software for project based organizations. Our Pipeline Management and Customer Relationship Management software is designed to provide your business the real-time data and analytics it needs to keep on top of your prospects and branch into new market territory. To learn more about the benefits of ERP software for not only your pipeline but your entire business, download our ebook. Or if, you want to test-drive Unanet for yourself, contact our sales team.