Accurate project cost capturing provides an organization with an invaluable amount of data for decision making. Without the knowledge of actual costs on projects, companies may sell products that do not make any money or attempt to provide services where the cost is not equal to the value. The long term viability of an organization depends upon offering products and services for a price that allows for organizational growth.
Your role as project manager is to ensure that projects you manage deliver value to the organization that is in line with expectations. This includes re-evaluating and potentially ‘killing’ a project that does not provide the business with its intended outcome.
In the United States today, service-based businesses are becoming a larger part of the gross national product. A large segment of service-based companies do not have a culture of capturing costs on projects on an individual worker basis. Culture is the biggest issue today in capturing time effectively. An organization must be committed to reviewing projects and their costs in order to gain the most out of scarce resources.
Many organizations do not capture time and often find it difficult to get ‘white collar’ team members to enter time. When this is the case, the management and leadership of the organization need to decide upon a method to change these behaviors. Successful leaders have incorporated various incentive programs in order to modify the culture and behavior of teams. One method is to incorporate the modification of behavior into goals and performance evaluations. Other organizations have asked that their teams enter time and in return for compliance, they commit to a defined work week of no more than 50 hours.
Teams that do not capture time or expenses may experience significant delays when reporting project cost performance. If the team starts entering time, then the project manager can start learning from historical experience by finding out what was planned versus what actually happened.