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Every business comes across risk threats that could impact their success negatively. With added focus on your firm’s weak areas, you can aid in increasing your profit margins and save losses resulting from wastage and inefficient management.
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Every entrepreneur needs to be proactive in identifying underlying problems that are plaguing the firm and prioritize improving the operational bottlenecks that slow work down, and lead to budget overruns. One can contribute to a substantial increase to the bottom line and help the firm’s project managers to perform more efficiently. Here are the list of risk involved in Project Profitability ,
Inefficient Planning Planning is the vital part of any project and any good project starts with an estimate, yet many firms fail to have a sound well-researched estimate in place. One such example could be- Using standardized estimating practices, such as Top-down estimating without verifying the necessary breakdown of costs. This can lead to project fees to be incorrectly calculated and hence business may suffer a huge loss.
Unsupportive Culture A firm’s culture is hugely responsible for the smooth functioning and success of the firm. The daily operations are impacted by the culture which is driven in a firm. The culture, in any firm, takes years to form and implement. It also depends a lot on the owners and their willingness to improve their systems and processes in order to increase employee engagement and productivity.
Lack of Financial Management Skills Most Project Manager’s belong to technical backgrounds and prefer to focus on delivering high-quality projects, client satisfaction, and meeting deadlines. While they might be responsible for many financial management aspects of a project the least focus is paid to get them trained in these skills. Skill training and development can go a long way towards building a team of skilled and profitable project managers.
Employee Turnover Employee turnover is a very costly human resources expense. The cost of turnover goes way beyond just the expense of recruiting and training a new staff person in a position. Failing to retain good employees can also cause client dissatisfaction and potentially losing them to competitors as most of the clients don’t prefer a frequent change of staff members.
Mismanagement of Resources Optimum utilization of people’s skills, talent and time are one of the keys to your firm’s success. It all starts by regular tracking and management of resources and ensuring that the right people are doing the right jobs. While most financial management reports focus on performance in the past, the key to effective resource management is to be able to forecast the future.
Taking all of this data into account and determining efficient Resource Planning systems can help you provide much-needed idea and visibility about your three to six months (at least) future resourcing requirements, and save your firm money by ensuring that hiring decisions are made at the right time.
