Roadmap for Digitalization of Opportunity To Cash Cycle in IT Companies

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Roadmap for Digitalization of Opportunity To Cash Cycle in IT Companies

Kytes

@ProductDossier

September 12, 2022

Project Management Digital Transformation IT Services

200

At a glance

The Trinity of challenges
Change process and digital journey
Implement in phases of tangible gains
Gain customer trust
Ease of work for employees

IT companies are facing a trinity of challenges. They have to meet customer expectations. They need to improve the employee experience to manage attrition and they must improve employee productivity to improve the business performance. Customer and employee surveys point out these challenges.

If you ask CEOs, CFOs, business heads, delivery heads, and program managers, almost all mention that improving project margins, ensuring governance, and achieving business excellence are their major goals.

To achieve all the above, real-time visibility of opportunity to cash cycles of multiple projects, cross-functional collaboration, and proactive decision-making are essential. Piecemeal solutions, islands of automation, or generic enterprise software can not provide these in project environments.

The solution

Digitalization of project opportunities to cash cycles offers a solution. Those who have digitalized opportunity to cash cycle have achieved improvement in resource utilization and project profitability of 2% to 5% and cut down DSO by 15 to 30 days, netting gains of millions of US Dollars depending on the size of the operations. They have gained trust of their customers and their employees report ease of working.

The Change Process

But digitalization is much more than merely implementing a technology. It involves building a project management culture. Any cultural change doesn't happen overnight, it takes time.

So, what are the steps an organization needs to take to achieve digitalization and reap its benefits?

Deal with the denial of the problems

The first step is dealing with the denial of the problem. Your organization is probably used to relying on spreadsheets or standalone or homegrown solutions which prevent collaboration while preparing project estimates leading to errors. There is poor visibility in the resource requirements leading to reactive and delayed talent acquisition. You may also be getting less than estimated project margins. Delayed billing or rejected billing may be causing higher DSOs. You need to recognize that these problems exist. All your people need to confront this reality.

Change requires a sponsor

The next step is appointing a capable sponsor who will guide and drive the required actions. If your organization is small, let us say you have 300 people there may be a tendency to say that we are too small, it is too early for us to digitalize. If you have 3,000 people, there may be a mindset that nothing can change, we are too large. The sponsor’s role is to overcome such types of resistance.

A strong sponsor is necessary to overcome the inertia to resistance to change.

Put the best team in place

Next, the best possible team has to be handpicked to pilot this project. If you use benched people just because they are available, you can easily imagine the results!

Listen to the experience of change management

Selection of the technology a vendor and professional service automation software (PSA) comes next. It is much easier and it saves time to talk to people who have experience with digitalization before going for a proof of concept (POC).

Phases of tangible gains

The change management for digitalization, cannot happen overnight. Therefore the next step is to plan for a phase-by-phase approach in which one monitors and consolidates the benefits of a phase and uses the success as a launchpad for the next phase. This will ensure a wider buy-in for the change process.

You could start with the digitalization of estimation, markups on costs, and proposal generation and then integrate it all with the CRM. You can check whether these changes are showing some results in terms of better collaboration while preparing a proposal.

Implementing the resource management module of the PSA can be implemented quickly with visible benefits.

Timesheet solution alone does not add much value. But when timesheets are integrated with resource management, it generates value because it improves visibility of utilization and availability of resources. This could be an incremental step in your digital journey.

Identify opportunities in which your salespeople have more than 70% confidence level. Get the concerned project managers to prepare their work breakdown structure and resource needs. When this is integrated into your resource management module, your talent acquisition team will get a head start.

Integration with the ERP for the calculation of project financials could be another phase.

Data from completed projects can be used in the PSA modules and it can be used by your leaders to improve project estimation, the master list of tasks, resource allocation, etc.

When you have data of good quality, then you can go for AI and ML technologies.

Improve customer experience

A good PSA solution can let you open customer portals. Your customers can then track projects, check and approve timesheets, and interact with you more productively. This gives them confidence in your project management and improves their overall experience.

Hand-holding, empathy, and trust

Through all the above you need to guide your people, support them through hand-holding, and be with them. When your people start seeing the benefits of digitalization, they embrace the changes readily. You need to trust them.

Employee experience

When your people can collaborate easily, when they have relevant information to manage resources optimally, and when they can compare ‘as sold’ costs with ‘as billed’ costs, then they will ask the right questions and come to optimal project decisions. Your people will experience ‘ease of working’ like those from organizations who have gone ahead in their digital journey.

The above signs will tell you that your efforts of building a project management culture are bearing fruit. Everyone will then be speaking the ‘project language’ - the language of work breakdown structures, project plans, tasks and resources, and project margins.

You need a capable partner who brings PSA software that supports the above approach. Your PSA partner will help you plan the above phases. Digitalizing your opportunity to cash cycles will put you in a strong position to meet the above challenges and achieve your business goals.

Shivani Kumar

Co-Founder & Head of Marketing
ProductDossier Solutions

About the author: Shivani Kumar, Co-Founder & Head of Marketing at ProductDossier, a company having a flagship product ProductDossier PSA, helping customers achieving Business Automation & Excellence. You can reach her at shivanik@productdossier.com

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Kytes

Kytes is a leading PSA software platform built to create value for service businesses to unlock their growth potential. With Kytes, you can simplify your business processes and gain the clarity and insights to make data driven decisions that matter. Kytes digitize and automates your end-to-end project operations including project financials, project delivery and resource management leading to revenue growth and better margins. Are you ready to elevate your business to newer heights with Kytes? Schedule a demo today!