5 Things to Consider When Purchasing a Time & Cost Management Solution
Your business is growing very rapidly and your auditor is asking to capitalize labor costs for R&D and IT strategic projects. To secure an R&D tax credit, your tax consultant may need you to track R&D costs. Your executives want a better understanding of what projects are eating up the budget, and where resources are allocated. In fact, you may be performing project time and cost management for more than one of these situations, and the process has become cumbersome and complex.
A time and cost management solution can help you tackle these project management challenges. Here are five things to consider before you decide which solution to purchase:
1. Does the solution make it easy to capture time for cost management?
Most engineers and designers hate filling out timesheets. Look for a solution that automates and simplifies time entry as much as possible, to make it a fast, hassle-free process. For example, can timesheets be pre-populated based upon resource plans for that week, so that all the user needs to do is review the timesheet and submit it for approval. Be sure users can enter time from mobile or tablets when they’re out of the office, and that the user experience is simple and straightforward.
2. Can you access your time and cost data quickly?
Before you decide on a solution, it’s important to have a good understanding of the data you need, and how granular it has to be. Does your solution provide the data exactly the way you want in one or two clicks? Is it easy to configure reports to deliver that information, based on your specific needs? Also, if you need to export the data to another accounting or financial system, does the new solution provide an easy way to do the export, either manually or through integration? These important considerations will make a big difference in how quickly you can access and use your project data.
3. Is the solution easy to set up?
Before you choose a solution, think through the workflows involved with cost management. To maximize adoption, the solution you deploy must be easy for all players to set up and use. For example, you may capitalize cost only for certain tasks on the project; does the solution allow you distinguish between capital and operating expenses? If most of your projects have same structure, can you copy projects so that you don’t have set them up over and over? How easily can the resource manager allocate resources for various projects and tasks? Makes sure the solution you choose also allows you to easily configure cost calculations based on your specific needs.
4. Does the new solution benefit your internal business partners?
Remember your last monthly or quarterly meeting with Head of IT/R&D, Resource and Project Managers? Perhaps they were sulking over your requests to provide resource effort estimation across different projects. IT/R&D Resource Managers, Project Managers and Executives play a very important role in your ability to manage costs successfully.
If the solution you choose provides a winning situation for both you and your business partners, you’ll have a much easier time justifying the purchase. Once purchased, your business partners will be more likely to take it upon themselves to set up projects and resources, because they’ll see the value in it. As a result, you’ll automatically have access to cost data for better management and you’ll no longer need those unpleasant monthly or quarterly meetings with them to hash out the details.
Look for a solution that not only solves your problem but adds value for your business partners in IT and R&D Departments. For example, superior visibility into resource utilization and the priority of projects puts these key stakeholders in a better position to forecast resource needs. And if the organization is launching new initiatives, they’ll be better able to access whether or not they have the capacity to take them on.
5. Does the solution capture cost data accurately?
Consider this scenario: You may have a few full-time employees and a few contractors. Your full-time employees may receive overtime pay but contractors may be paid for actual hours worked. If a full-time employee works 60 hours during a regular week, his or her hourly cost must be normalized for a 40-hour work week, and the hours allocated accordingly to projects. For contractors, all hours should be taken into account for cost calculation. Does your new time and cost management solution support cost normalization so you can easily configure pay rules based on employee types? Another important feature is the ability to enter time in percentages as well as hours.
