Let’s face it; most of those within your company (your “departmental employees” for lack of a better term) are not using timecards. In my university days, I worked part-time for a kayak manufacturer so I can appreciate the concept of clocking in and out, which of course was tied directly to my paycheque. The simple premise of clocking in and out was to ensure that money was not left on the table and you are paid for the time that you put in.
Fifteen years later, as a business consultant, I find myself meeting with more and more companies who are leaving money on the table.
But let’s switch gears; it’s not the “punch clock” worker that I am referring to here, it’s getting better visibility into HOW certain departmental employees (i.e. sales/PMs/support) are spending their time and subsequently providing analysis into whether you should be charging your customers more or walking away from certain sales opportunities. We can break this down into three common categories:
This is the big one. If your company engages in external projects, it’s important to have a real-time, easy to use tracking system. It’s not meant to be a “micro-management” tool, but will allow you to track time against hours, which is especially important if you fix bid a project.
We leverage this internally using cloud technology, which not only keeps track of the time, the resource, and the type of work, but also allows us to run a post-project analysis and make decisions on how we can best manage & price similar projects in the future. More importantly, we keep it simple. Time entry literally takes 30 seconds, and with the right reports set up, allows us to track real-time utilization rates and project profitability with the click of the button.
Typically, the customer support department is deemed as a cost center; however, if you are selling support contracts, it’s imperative that you track how much time is spent on each support case. Common support solutions will calculate case age (that’s a topic in and of itself), but the amount of “billable” time is not generally tracked. This can help flag your support rep if a customer is over hours, and with a click of a button (using current technology solutions rather than the less effective but customary spreadsheet route), reports can be sent to the customer detailing the hours spent and a description of each support call (a standard request from any customer with a support contract).
Cost of Sale:
This is the interesting one. Do you have employees that fly across the country for a deal that, in reality, is not all that qualified? Qualification is critical; asking the right questions right off the bat is critical (as simple as the BANT philosophy – Budget, Authority, Need, and Timeline). If we don’t ask those questions, we could not determine whether it truly warrants a$1000+ travel expense? Ultimately, introducing a simple pre-sale tracking system serves two purposes:
a. It allows management to get a breakdown, by sales person and percentage (cost/opportunity amount) as to who is most efficient in their sales cycles. You’ll gain visibility to those who are spinning their wheels on deals that have a low probability of close, and apply immediate solutions such as coaching them on how to better allocate their sales time. At the end of the day, the sales team puts money in your wallet and avoids investing in prospects with small closing probabilities.
b. Your team will be more cognisant, and hopefully, think twice about an overseas trip to visit an administrative assistant who is not in the position to validate high-level requirements or budget due to her lack of decision making authority.
The bottom line is if you find that you are using spreadsheets and/or discovering “overages” well after the fact, you are likely leaving money on the table. As it relates to projects and support contracts, it’s much harder to go back and bill a customer “after the fact”. There are often idiosyncrasies as it relates to all of the above points (perhaps you have to “make good” on something you didn’t do well on a previous project, or bend the rules on customer support, allowing complimentary hours to help you win an upsell deal). While we employ process change, we also employ cloud technology that keeps it simple for end users, allowing management to get that immediate real-time visibility into these key performance indicators and as such, recommend these ideologies to all the customers we work with.