There is no amount of planning, projecting, or preparation that can change-proof a services organization. So when disruption inevitably permeates a business — and it can permeate quickly — agility becomes pertinent. Whether there is project scope change or a shift to your services proposals, agility will be your best defense.
If disruption has knocked on your door recently, your services organization is likely preparing for or already seeing a change in Statements of Work (SOWs) and/or services proposals. According to the Technology Services Industry Association (TSIA), 55% of Professional Services Organizations are or are strongly considering applying change orders to their SOWs or Professional Services contracts right now. That number is expected to keep rising.
Changepoint Services Automation (SA) software makes it possible to gain visibility into people resources with unplanned time away. This empowers services leaders to establish a connected view into the human capital-based aspects that make or break on-time delivery.
Unexpected project scope changes can have a direct impact on revenue projections; therefore it is critical that business leaders have the potential to understand not only the impact to the projects, but also which revenue is potentially deferred.
Though many services organizations still work in spreadsheets and Word documents (or the equivalent), SOWs and services proposals are most effective when automated, because you can manage more data, faster. Either way the end goal rings true: get projects done for your customers faster. But how do you maintain efficacy when disruption is causing major shifts to the scope of your projects?
A changing project can have one or two impacts on a business. If work is ‘Time and Materials,’ project delays can result in billing issues, such as billing delays. If work is done against a ‘Fixed Fee’ project, then delays in work mean delays in revenue recognition. The worst-case scenario? A delay in project would result in both revenue recognition and billing impacts.
Issues with project delays may seem simple enough to mitigate, but many services automation solutions treat budgets as a ‘roll up’ or ‘roll down’ of a project. It is crucial to plan using your budget billing data and revised billing data with Time and Materials projects. With the right services automation software in place, you can view a budget as its own object so any changes related to that project are subject to audit. This will allow your finance group(s) to report changes on a rolling basis or as disruption causes projects to shift.
If a project is ‘Fixed Fee,’ then billing and cash collection are usually secure and in hand. However, what may be invisible to many services organizations is revenue recognition within their budget. In this scenario, services leaders need be able to see — in real-time — the budget % complete by financial period (or by other methods) and the revised budget % complete by financial period (or by other methods). Services automation software that provides this insight will allow Finance to see the impact of project delays on revenue and will be able to report those critical numbers back to the business at the close of the financial period.
In some cases, shifting SOWs means certain projects are going to have to be delivered outside of the contract end date. If you know your contract end date and your project end date then the right services automation software will flag and alert the system so managers are advised when risk is about to occur.
How do you assure that your managers are alerted when projects that are being performed for a customer are approaching a threshold? Services automation software that contains the ability to scale your services level agreements as project scope changes. This will assure managers get advanced warning before a project that is being performed for a customer is about to reach a threshold. Therefore the risk of breaching the SLA is mitigated. In fact, certain services automation tools can automatically surface these insights, and assure work is redistributed if it risks breaching an SLA.
If not managed properly project scope changes add expense, increase risk and cause delays. The longer it takes to deliver, the more revenue is at stake. Reducing time to revenue means reducing the time it takes to understand and adapt to SOW or service proposal changes. With Changepoint Services Automation you get real-time insights that enable services leaders and finance groups to develop the agility necessary to stay across various scope changes. It doesn't matter if those changes correspond to project delays, contract end dates, or other risks previously mentioned. Changepoint SA is a purpose-built solution ideal for defining, communicating and accommodating scope changes in order to keep sales cycles accelerated and time to revenue reduced.