Our client on this assignment was a software development company that had ben in business for eight years, during which period it had grown to become a household name in custom software development solutions.
The client had an open management, easy culture, and a dedicated, hardworking, and highly professional team of developers. There was only one problem. The client was busy, but was not making money. It was as though the business had gone into diminishing returns.
The client was increasingly barely breaking even. Employee productivity had also since the business had never set up any process by which to manage employee performance on the various projects the business was working on at any one time. At the same time the company's owner managers were putting their greatest attention on providing the clients the best quality of service possible , without much attention on what it was costing the business to secure and service the clients they had.
The client's owner managers were concerned about their low profitability, recurrent cash flow problems and increasingly, what it was costing them to meet their client requirements. Above all, they needed to find a way by which the business would be able to function without their hands-on involvement, which they acknowledged was not good for their growth. Having started off as "techies" the company's owner managers realised the value of engaging in marketing and client engagement themselves but were also wary of the gaps their reduced involvement in the supervision of software development would likely introduce if a reliable transition of the business was not obtained.
We determined that the client needed three interventions:
1. A well articulated business development strategy;
2. An effective project management process
3. A reliable performance management process
A combination of work pressure and insufficiency of cash meant that the client was not able to undertake all the three initiatives concurrently, much as the business needed all the three initiatives at the same time. A preliminary review of the assignments return on investment (ROI) suggested that fixing the project management problem first would obtain the best results. This is what we started with. Using a third application, we developed a comprehensive project management solution, in order that the client would accurately determine the duration, schedule and human resource capacity that would go into a project, on the basis of which the client would bill for work done.
Improvement of the project management process registered immediate results; the client revised its fees upwards, based on proper pricing of what they were doing – and did not lose business. Delivery in full and on-time (DIFOT) went up from 23% to 58% within twenty-four months, which was greatly aided by the company-wide project management training we provided for the client's staff.
With the level of performance the client had obtained in just a year, the client decided to link individual performance management to project performance management. We used the third-party automated productivity solution to determine optimal project resourcing, along with the target gross margins for each project at the point the project was set up. Each client assignment was handled as such. Subsequently, employee earnings went up, without compromising profitability , costs and overruns drastically reduced, and the overall quality of customer service also went up.
In addition to these two initiatives tremendously enhancing the client's operational efficiency, the owner managers were able to free more of their time, which they put into business development.
Based on the findings of our comprehensive business review, the client reviewed their internal business process, eliminating non-value-adding relationship links in the project management process to give clients increased access to, and control of their software projects. This enhanced the speed at which project decisions were made, increased external customer satisfaction greatly, among other area areas on work.