7 Critical Success Factors for Project Based Firms to Consider in 2024
Here we define success factors for 2024 and explain why Project Based Firms should care about them.
Here we define success factors for 2024 and explain why Project Based Firms should care about them.
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In today’s data-centric digital landscape, intelligence is central to any business strategy, especially as we look towards 2024. According to PWC, talent, technology and data will set winning professional services firms apart from the competition.
Technology combined with data is a matter of life and death for professional services firms where the “product” is a combination of insights and expertise. Professional services firms have always known this, given that profits depend on their ability to provide specialized insights and solutions you can’t get anywhere else.
Human experts (talent) – and the knowledge and skills they bring to the table – are responsible for generating business value and differentiating their firm from the competition.
What’s different now, though, is that firms need to prove that their expertise gets results. Critical success factors (CSFs) represent the key areas or conditions you need to master for your business strategy to be successful.
Here, we’ll quickly define critical success factors and explain why professional services firms should care about them. Then, we’ll look at 7 critical success factors that belong in any professional services strategy. Read on to learn more.
CSFs can literally be anything — whether it’s improving customer satisfaction, increasing revenue, reducing operating costs, or something specific to a particular project or deliverable – making them somewhat difficult to identify – let alone define in concrete terms.
Critical success factors are often confused with another performance-based acronym, the key performance indicator, or KPI. Like KPIs, critical success factors play a key role in setting goals and driving improvements – but they’re far from interchangeable.
CSFs focus on general, high-level goals, whereas KPIs measure the impact of the actions you take to achieve a specific outcome.
For example, if your CSF is improving service quality, you might use KPIs like average resolution time, first-time fix rate, or customer satisfaction scores to understand how you’re performing in this area. Basically, critical success factors are broad categories – KPIs allow you to measure those factors against different dimensions.
With that in mind, here are seven key areas you’ll need to focus on for your firm to not only achieve critical goals but ensure that it survives.
Firms need real-time insights into the entire business – finance, project accounting, sales, everything – otherwise multiple versions of the truth will start showing up in budgets, estimates, and forecasts.
Many pro services firms still use fragmented systems or analog methods like spreadsheets to manage projects. This leads to poor visibility, inefficient processes, and, worst of all, inaccurate data.
Bad data, in turn, leads to inaccurate timelines, estimates, budgets. It prevents you from generating reliable cash-flow forecasts and makes it incredibly difficult to manage resources.
Determining if your system is truly “unified” starts with looking at your core processes to determine if they’re working. So here, you might ask yourself the following questions:
When it comes to data, professional services firms need to move beyond basic analytics tools and generic client reports. Everyone – from C-suite leaders and IT to SMEs, service techs, and sales reps must learn how to activate and operationalize their data.
It’s not enough to interpret insights, professional services firms can’t compete unless they’re able to effectively leverage that information to produce a specific outcome. That might mean working with Power BI and Power Apps to solve a specific problem. Or – maybe it’s using AI to find patterns within disparate data sets that might help clients secure a competitive advantage.
When pro services orgs use data to make decisions, rather than gut feelings, they’re in a better position to drive long-term growth.
Here, you’ll measure success by looking at things like:
With client expectations and technology evolving at a break-neck pace, pro services firms need to adapt their business models, processes, and strategies to the current digital reality.
IBM experts advise organizations to focus on “human-centric” experiences, rather than following a “customer-centric” approach, which frames the relationship as transactional.
Instead, all transformation efforts should focus on providing value to all end users — including your talent. Here are a handful of questions you might ask yourself to learn how you’re doing on the experience front:
Building on our last point, optimizing skills is an urgent priority as we move into 2024 — experts must learn to augment existing knowledge with AI and automation, use data to build valuable solutions, and at the same time, ensure that digital doesn’t diminish the human relationships still at the heart of the service-based org.
Firms need to ensure that experts’ skills and knowledge deepen and evolve with the times. It’s so much more than keeping up with the latest tech trends – it’s being able to effectively use technology to augment existing skills and ensure that decisions/tactics/solutions produce the right outcomes.
Agile transformation represents an ongoing effort to improve efficiency and effectiveness of the organization.
Leading organizations have the agility and flexibility needed to respond to disruptions, evolve with market conditions, and act on emerging trends without clunky processes holding them back. They also continuously rework processes to better meet client needs, reduce waste, boost productivity, and move faster to stay ahead of competitors.
For project-based firms, unlocking agility could mean embedding Microsoft Teams, project management tools, and real-time BI into daily workflows. Microsoft Teams has an embedded tool, Teams Planner, which is a great way to manage a project and keep it progressing along. It’s a built-in tool to help build task lists for ongoing projects. If you’re using Microsoft Teams, you can organize your tasks by adding one or more Planner tabs to a team channel. You can then work on your plan from within Teams or in Planner for web, remove or delete your plan, and get notified in Teams when a task is assigned to you in Planner.
You might measure success by asking yourself:
Executive sponsorship ensures that the entire firm stays aligned and works together to achieve high-level goals. It also prevents projects from fizzling out either because upper management fails to make it a priority or the team lead from a specific department was tasked with leading adoption efforts (it doesn’t work).
Ask yourself the following questions to learn more about whether your C-level champion is getting results:
According to a Harvard Business Review piece, What Professional Services Firms Must Do to Thrive, firms need to be able to systematically manage their client portfolio.
However, managing an entire portfolio’s worth of clients and making sure every complex project is delivered on time and on budget is already a lot.
On top of that, project managers must also maximize project profitability – ensuring that things like discounts, non-billable hours, and poor utilization don’t eat up your margins.
Firms need real-time insights into the entire business – finance, project accounting, sales, everything – otherwise multiple versions of the truth will start showing up in budgets, estimates, and forecasts.
Here, you might investigate solutions that can work behind the scenes to ensure projects stay on track (and stay profitable).
Along with the Microsoft Teams Planner tool which you probably already own with your Microsoft 365 licenses, Microsoft Dynamics 365 users can set custom accounting rules, set payment terms that encourage faster turnarounds on client payments, and measure financial performance against goals and historical data. They can also add new operating models to the platform and use in-app reporting tools to optimize performance.
Progressus Project Management, purpose-built for professional services organizations, sits on top of Microsoft Dynamics 365 Business Central and is designed to facilitate efficient project planning, execution, and monitoring for professional services firms and project-centric organizations.
Functionalities offered with Progressus include:
A few questions that can help you get a sense of whether projects are profitable:
The critical success factors mentioned here represent a very small fraction of CSFs professional services firms might include in their business strategy.
Professional services is such an expansive category — and even within specific niches such as accounting firms, IT services, or management consultancies, every organization will have their own set of critical success factors.
One thing that we know is that professional services firms can future-proof their businesses against the next wave of disruption by making the right investments today, starting with taking a holistic approach to digital transformation. Adopting technology platforms that unify the business allows firms to reach the bar that clients are setting today—and build the digital capabilities that can enable them to compete in an uncertain future.
Whether you need help identifying critical success factors, putting together a roadmap for meeting them, or implementing the tech that delivers the desired outcomes, Progressus experts can make it happen. Contact us today to learn more about how we help professional services firms navigate the challenges of project-based work, resource management, and complex financials.