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Project Management

5 Common Problems in Professional Services Firms (and How to Fix Them)

Every business has common problems, regardless of the size or scope of the projects. Learn how teams can manage the most common problems.

Every business has problems--yours included. Professional services organizations struggle to address a range of concerns, such as project management issues, hiring, and billing. Since these businesses focus on providing knowledge-based services, some of these challenges can be particularly difficult to surmount.

According to a PwC study that examined over 10,000 projects at 200 companies, only 2.5% of those surveyed managed to successfully complete all of their projects. While every business has a unique culture and approach to the market, there are common problems that recur, regardless of the size of the company or scope of the project. However, your management team can prepare for and effectively manage the top five most common problems.

1. Hiring Top Talent

Unemployment is low, and every business is competing for high-quality professionals who can bring a strong skill set and enthusiasm to every project while fitting into the company culture. However, many companies wrestle with filling open positions. If your company is struggling to find talent, you should ask yourself several key questions.

  • Do you know exactly who you need to hire? It's crucial to understand the specific skills and traits your business needs. Having a thorough forecast of your company's next months and years--and knowing where you want your firm to go--are essential starting points.

  • Does your job posting highlight the necessary aspects of the position, and does it reflect your company values? You'll never get the right applicants if you don't advertise yourself successfully.

  • What are the perks of working at your company? You may not be able to find room in your budget for significant pay increases, but you can instate other policies that make you an attractive employer. Flexible hours, telecommuting (using cloud software), paid online training, and mentorship programs can all help garner star employees.

2. Poorly Defined Goals

Many projects have failed due to a lack of clarity at the beginning of the process. One AEC industry survey notes that communication breakdowns, like rushing through the planning phase without formal goals, are responsible for 51% of project overruns. Meanwhile, the Project Management Institute has determined that "a lack of clearly defined objectives and milestones to measure progress” is the top cause of project failure.

Your clients have an idea of what they want and you have an idea of what they want, but these two perspectives may still be quite different. The best way to approach any project is to make sure you, your client, and your team understand the outcome and put the project goals in writing. Include the details for each benchmark and work with the client to ensure that there is a clear agreement of the nature and progress of the project. Define all your key performance indicators (KPIs) and communicate these with the client.

3. Low Employee Utilization Rates

Maximizing your billable hours can be challenging. One way to address this issue is to ensure that all employees are consistently logging their activities and time throughout the day, preferably with software that can effectively manage and analyze this data. Periodically check to ensure that billable workers are not performing tasks that nonbillable employees could do. Finally, make sure that you are effectively utilizing your employees' strengths. It can be tempting to try to use your rock star employees constantly, but that may be a mistake. Not every employee can excel at every skill. Plus, overloading a star employee with too much responsibility on too many projects could lead to burnout. Your project management software can help you understand your employees' skills and help you deploy them across projects effectively.

4. Scope Creep

The plans are set. You and the client have signed a detailed agreement outlining the project and its goals. The first benchmark has been achieved when the client says, "That's great, but I thought it would include…"

Scope creep happens. Adequate planning and communication can prevent it somewhat, but there will always be conflicts between the understandings of various parties in a contract. The best way to deal with scope creep is to identify the nature of the change. If it is a small issue, mention to the client that you can proceed, but that it is not in the original specifications. If the issue could effect changes project-wide, then you should discuss this with the client before proceeding. If the client is interested in the change, you should then discuss the additional costs associated with the change.

5. Outdated or Inadequate Software

If you are still using Excel to manage data, you've already encountered its limitations. Companies typically utilize only the most rudimentary software when they first start out and then transition to more effective software solutions as the company grows - or when there is a crisis. Utilizing the wrong software can cost your business in both time and resource management. Evaluate your software needs to identify the most effective solution. Does your management software adequately interface with other solutions your company uses? Are you able to track real-time project data? Can your team members use it effectively, or is there a large learning curve?

Some of the above challenges go beyond the typical domain of project management, and so an approach that incorporates input from multiple stakeholders at your business may be in order. A few of the solutions, such as modifying your hiring process, may involve a significant review of your company's culture. Taking steps to minimize the most critical problems facing your team will allow you to more effectively hire talent, manage your resources, communicate better with clients, produce better results, and retain your best employees.

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