What Are Some Of The Drivers For Project And Agency Profitability? Why Do Projects Go Over Budget? What Can We Do About It? Ben Aston Can Show You How To Save Money.
In today’s episode I am talking with Ben Aston with the Digital Project Manager (DPM). He's actually the founder of the largest and fastest growing communities for digital project managers on the Planet. He is a prince to practitioner, a certified Scrum Master and with more than 15 years of delivering visual project management and leadership. His wealth of knowledge when it comes to project management is second to none. We get into some pretty good wonderful in depth questions.
The Digital Project Manager (DPM) has how-to guides, articles on project management and software, best practices, hacks for productivity, podcasts, and other resources to get you started leading projects in a digital world. They also offer membership, which includes access to a community of project managers, as well as ongoing workshops and mentorship. Their DPM School is a flexible, part time, digital project management course offering practical guidance on managing the entire digital project lifecycle.
Takeaways From This Episode:
- The difference between Project Management and Account Manager
- What are some of the drivers for project and agency profitability?
- Why do projects go over budget?
- What can we do about it - what are the levers?
- Learn about memberships and why they are helpful.
First, we explain the difference between the project manager and the account manager. I think project management is all about delivery, it's about delivering value, fundamentally, and taking ownership of delivering value. So for the right amount of money, within the right amount of time, the right work has to be delivered. And as project managers, I see this as a strategic role in which the project manager is the guardian of delivering value, whereas the account manager is more about understanding the brands developing the relationship with the clients. They're more about developing that connection between the agency and the client, whereas the project manager is about delivering value. Project managers are the ones who are screwing in the bolts, I mean, they are overseeing, like the general contractor, right? So they're the ones bringing all the people together and hammering in the nails and they're physically delivering that project. Account managers have a tendency to sit over the top of a project manager watching what is going on. So they're paying attention to having a job, but it's their job to communicate that in great detail to the clients. So the difference is account managers have a tendency to be all about relationships, and managing and optimizing the deliverable process for the project managers are actually in charge of the deliverable process. They work very much in tandem, they work side by side with each other, but there is a fundamental difference.
agency profitability that you have seen out there.
The profitability really starts with the new business process. It's really important that the new business team is getting the right clients and selling the right projects. Often what's happening is the wrong projects are being sold and the wrong clients are being acquired. Firstly, the right clients and projects are important. Secondly, the right engagement model must be right on. The more we can get the right projects in the door with the right clients, with the right engagement model and the right pricing structure the much better chance of actually delivering a profitable project.
I think the first thing in terms of project management, is they should have a seat at the table with new business estimating. Having the right data, using analogous estimating, looking at projects we've done in the past and using that data to identify the projects we are able to deliver on budget. It is very important to know as much as we can about past and present projects. Learn how to pick the right clients and engagement model to make sure you are profitable.
Give us two or three reasons why people lose money on projects?
Expectation level has to be one of the main reasons people lose money on projects. The expectation management is so important. You have managed to productize 80% but with that 20% that's still custom and bespoke, we need to be super clear about the parameters of that. We're not just defining the estimate and how much effort we think it will take, we are really clearly defining what the deliverables and what assumptions we're making around those deliverables.
One of the things when doing more bespoke engagements is that there are some unknowns. How can we kind of block in the canvas on those unknowns, to make it more defined, so things that we can do are things like, defining the process, and getting agreement for the process that we're going to follow, even if we don't know exactly what the deliverables are going to be? So really tightly defining that scope, I think it's super important.
Lack of awareness, managing scope, defining statements of work are a few things Troy talks about for why Agencies lose profitability. Sometimes we just rush things to get it out the door, and we shoot ourselves in the foot because that is a recipe for disaster.
what are a few pointers on how we can hopefully mitigate or eliminate this?
It starts at the project brief level, when we understand things from their perspective , understanding the why behind it, we have a much better chance of being able to deliver on that value. So understanding the rationale for why they're trying to do something, can be a super powerful in creating a more sticky relationship. We need an understanding of what's going to make an impact on their business. We do the wrong project, because that's what the client asked for, when actually, that might not be what they really need, or the most impactful thing at all. We do not fully understand and that's when we start losing profitability.
Scope Management is another way to eliminate the profit loss. Being prepared for a bit of pain in the project kickoff meeting. Basically having that painful conversation upfront will save you a whole lot of pain later. Clearly explaining there is an impact on the cost. There's an impact on the schedule, do you want to make that change or not? So be accommodating in changing the scope, but not in accepting their demands. Ben and I break down ways to mitigate and eliminate profit loss.
Ben talks about one of the services they offer to people in business and that is a membership. The membership is really about connecting people who deliver projects in a digital world and helping them become more confident, helping them become more skilled, and have them get connected and really have those conversations around project delivery. So come and check out their membership on the digitalprojectmanager.com/membership. If you know that you're in need, or maybe someone in your team is in need of some project lifecycle training to understand how to get from A to B on the project, check out their DPM School. It is all about taking people through that project management journey of delivering a project. They teach people about initiating projects planning their managing and controlling projects, which he talks about in this Podcast. We talk about how they create that map, how they create the route from A to B and get people to the end of the project as profitably and with as little pain as possible.
And yeah, I really hope together we can help agency owners and leaders become more profitable in the way that they plan, sell and deliver their projects.
Learn About & Connect With Our Amazing Speakers/Guest
Follow/Connect With Me Here:
Facebook Group: https://www.facebook.com/groups/digitalmarketingagencygroup
Follow/Connect With Me Here:
Facebook Group: https://www.facebook.com/thedigitalprojectmanager