If something cannot be measured, it cannot be analysed or changed. For any project to be successful, it needs to have measurable criteria for success. Project profitability can be gauged only by measuring the performance and the quality of the deliverables. It is also important to understand and pinpoint when your projects are at risk and when employees need help to cope with the given targets.
First, it’s highly essential to understand that profitability is different from the company’s actual profits. Profitability is the ability of a project to make a certain amount and is measured as a ratio that compares the cost of earning those profits. Project profitability analysis has become an essential factor in ensuring that projects run smoothly by detecting problems before they pose a greater risk to your profit margins.
Companies today understand the need for profitability analysis and therefore ensure that they analyse the profit sources, identify the employees responsible for making profits, and identify those employees who pose a risk to the project’s success. This kind of monitoring is only possible with employee evaluation software that provides accurate details about the most and least profitable projects by collating data from across your organization. Once you can identify the potential risks to your project, you also know what needs to be changed and you can ‘fix’ the issues before they cause any further damage.
Well, here are three metrics that can be used to track the profitability of a project:
1) Employees making profits
It is important that you identify which employees perform well and contribute to the project’s success. Some employees excel at their jobs and add value to your project. They go that extra mile to ensure that your project is on track and is delivered on time. They also ensure that the quality of the work done is not hampered in any way. Identifying these employees could help you make better decisions and increase your projects’ actual profits.
Monitoring and tracking employees with lower performance levels help you with your damage control efforts. Knowing where things go wrong can help you rectify problems before they begin to impact the overall profitability of the project.
3) Profit sources
Identifying profit sources can help you focus your time and efforts on the right resources so as to maximize the benefits. Any confusion on where your profits come from can be potentially fatal to the success of your project.
AssessTEAM gives you the means to improve the profitability of your projects by providing you with actionable intelligence in the form of employee evaluation metrics and help you analyse why projects do not deliver anticipated profit margins. The key is to track the man-hours and the costs associated with it. It is also essential to assign budgets for each of the projects and ensure that each employee enters the time spent on each of the projects per week or month. You can pinpoint which employees spent excessive time on a particular project via the employee timesheet software, and this could be an important step towards attaining profit targets. It also shows you what kinds of projects are best suited for you and provides you with accurate data so that you can take appropriate measures to improve the overall profitability of your company.