Whether your firm bills hourly, uses fixed fees, calculates a percentage of construction costs, or employs other methods standard in the AE (Architecture and Engineering) industry, having real-time feedback on progress is crucial.
One of the key performance indicators (KPIs) that proficient project managers track is the percent complete. However, this critical metric isn’t just about keeping a project on track. When applied effectively, firms equipped with the right technology and disciplined in monitoring progress can transform their operations. This technique enables firms not only to forecast revenue and staff workloads but also to determine whether the firm will thrive financially. It’s crucial to recognize the value of percent complete at the project level, but the same principles can be extended to drive better business outcomes across all levels of the firm.
Let’s explore six benefits your firm can expect when you diligently track project completion percentages.
Understanding project performance is fundamental to achieving excellence. Tracking percent complete values is essential for maintaining project integrity. By consistently monitoring progress, project managers can quickly identify deviations from the plan and course-correct as needed. Vigilance ensures that projects are not just completed but completed to the highest standards, which should be a cornerstone of your firm’s commitment to excellence.
In my work with clients, I often ask them to share the earned value for each project. Frequently, I’m met with blank stares and confused looks. When I follow up with, "What is the current completion percentage for each phase of each project?" my clients often pull out a project list and start rattling off numbers: "For this project, we’re about 75% done with schematic design and about 25% done with design development," they say.
When I ask how they arrived at these values, they typically respond that their estimates are based on decades of experience and a gut feeling that the numbers are pretty close to accurate.
I wish I could tell you they are close to accurate, but I can’t. Once we start gathering real data and using smart business and project management software, their eyes nearly pop out of their heads when they see the actual numbers appear in real-time with an astounding level of accuracy. This is often a moment of epiphany for these architects, and they regret not having implemented the right tools sooner.
Percent complete offers a window into the future, not just for project timelines but for overall business performance. When applied at a macro level, these forecasting techniques can predict future revenue, resource needs and even provide insights into your firm's financial health. This predictive capability allows firm owners and managers to make proactive decisions, ensuring long-term stability and growth.
If I ask how much work you have in your pipeline, the value of work-in-progress, or whether you have enough staff (or too many) to manage the workload for the next 9-12 months, could you answer with certainty? And how long would it take to get that information? If your answer isn’t, “Yes, and I have that information right here,” you might as well be living in the dark ages. There is no excuse for not having this data at your fingertips. More importantly, if you are responsible for the health of your firm, it is your job to know this information.
Monitoring percent complete isn’t just about keeping projects on budget; it’s about instilling a culture of financial discipline that permeates the entire firm. Consistent management of this metric ensures that every aspect of your operations, from marketing to research and development, adheres to a standard of financial prudence. By cultivating these habits, your firm builds a solid and robust financial foundation. This disciplined approach leads to accurate financial forecasting, better cash flow management, and ultimately, higher profitability.
Tracking percent complete can significantly streamline invoicing, reduce delays, and improve cash flow. In the four decades I’ve worked in the AE industry, engaging with approximately 1,400 firms, I’ve witnessed firsthand how tedious invoicing can be. Many firms waste an enormous amount of time chasing down information from staff and project managers to determine appropriate invoice values. Most employees find these requests tedious and disruptive to their project work. These problems compound, leading to inaccurate and late invoices.
When your firm employs smart technologies and firm management software, your staff can efficiently track their time and automatically compare it against project budgets and schedules. Progress (or lack thereof) can be observed in real-time, eliminating the need to chase down staff for details about their activities days or weeks after they occurred—information that is often inaccurate.
Your firm's discipline in monitoring project completion can be easily applied to other operational areas, from time management to client communications. This leads to a more agile, responsive firm that is always in tune with its projects, clients, and employees.
Effective communication is the backbone of any successful firm. Percent complete provides a precise, objective measure that can be shared with stakeholders, enhancing transparency and trust. Knowing this KPI at the project level helps establish KPIs at multiple levels within the firm, bringing clarity to all business communications.
When everyone in the firm—from junior staff to the CFO—speaks the same language rooted in clear metrics, the firm operates more smoothly and efficiently. This is why it is also important to be transparent across your team with firm data. All members of your staff should be able to see project fees, schedule, burn rate, and percent complete data.
While percent complete is a critical project management tool, it should also be considered a broader business strategy. By applying the same principles of tracking, forecasting, and communication to the business itself, firms can design operations that are as elegant and well-crafted as the architecture they create. This strategic approach not only improves project outcomes but also enhances the overall value of the firm, making it a more attractive investment for clients, partners, and potential successors.
For example, you can set a business development goal of signing $1m in new contracts this year. You can then track that on a weekly basis to see the % complete towards achieving that goal. This sort of metric can help you set your business development strategy, tasks, and track progress.
Tracking percent complete is about more than just delivering projects on time and within budget. It’s about building a firm that is resilient, efficient and future-ready. By applying the same level of design thinking to business operations that architects and engineers use for their projects, firms can create a well-designed business that stands the test of time.