How To Deliver Fixed-Bid Projects More Profitably Through Knowledge Management
There’s a growing trend for fixed-bid projects in the professional services industry. According to the Technology Services Industry Association (TSIA) Professional Services Benchmark, fixed-price contracts now comprise 51% of all professional services automation projects.
The appeal is clear, for the client at least: They know what they’re getting and they can budget for it with assurance. For professional service providers like you, automation software allows you to standardize and template your projects and, with fixed pricing, they become repeatable. All of a sudden, you’ve got the Model T Ford of projects, and you’re on your way to being a profit center.
But just like for Henry Ford, the key to your success with fixed-bid projects is efficiency. And that means everyone knowing what to do, when to do it and how to do it.
Experience makes all the difference
In a paper on “The special challenges of project management under fixed-price contracts”, presented at PMI® Global Congress 2015, G. Lowden and J. Thornton pointed out that this requires experience: “The more experience that you and your project team have with the client and/or work involved, the less likely the risk” of the project going off the rails. Additionally, “in new programs, […] the direction of the project evolves based on what has been learned to date.” In other words, the knowledge your teams have gained on previous projects can inform how you approach new ones, enabling continuous improvement.
Getting people up to speed remains a challenge, however. Whether they’re resources new to the firm or existing resources from a different team, to keep costs down, you need to get them up and running as quickly as possible. To help them understand how things work, right now, you probably rely on certain subject matter experts: the client connoisseur, the industry guru, the software whiz, the process master. Maybe you direct them to your company wiki or a procedures manual. At best, there’s a lot of coordination involved and a fair amount of downtime (and costs) before they’re operational. At worst, your new colleague is referred to a procedure they can’t access (broken link, delay in permission authorization), or the procedure wasn’t recorded correctly, or nobody seems to have an answer to the question they have.
And what happens if one of your authorities moves on, leaving you with a knowledge gap? Or you change software tool and your procedures no longer reflect reality?
The chances are the totality of experience in your company is not recorded anyway. You may have heard of a “cool hack” going round the office to more efficiently use your project management tool. Or you may learn by chance that Dave used to work in the same industry as your new client and might be able to give you insight. Imagine if all that knowledge was centralized and regularly updated, and if everyone within your organization could have that wealth of experience at their fingertips, able to access it at exactly the moment they need it.
From standardization to a living solution
That’s what the customer service industry has taught us. When you phone in to a call center which serves multiple products and services, representatives need to be able to instantaneously access the latest information in order to support you. If you present them with a new problem, they’ll record how they solved it so the next person can use the information. This has given rise to knowledge-centered service or KCS, which integrates a knowledge base into the workflow of service delivery, and is now being adopted by many departments in many sectors of industry.
More than just a means to organize and search a repository of information, true knowledge management means collaboration, governance and improved project outcomes.
Teams work together better because they have the same understanding. When everyone is on the same page, work is carried out more efficiently. Standardized structures and pre-defined templates for projects mean everyone knows what to expect and newcomers can easily follow. Forms and templates also help employees comply with corporate standards. While employees are expected to read guidelines and follow policy, it’s more realistic to make certain they do so by making it impossible to diverge from the rules.
However, templating doesn’t always cover everything. You can list in notes on your template the types of skills and resources that are best for the type of project, availing of existing expertise at a point in time but, as the expertise evolves, that information may not be kept up to date. Likewise, standardized administration forms can sometimes become complex by trying to cover every eventuality, as you’ve no doubt seen with your tax return guide.
To ensure knowledge is captured and implemented, you need a system. First to enable existing knowledge to be easily accessed, then to allow new understanding to be easily added to the pool of organizational know-how, such that your knowledge base evolves with experience, becoming a living solution. With in-application, context-sensitive help, that searches all available information from multiple sources, your team members will have just-in-time answers to their questions, whether they’re old hands dealing with new project types or new corporate policies, or whether they’re new recruits adapting to your environment. Just as importantly, when your team members become aware that information doesn’t reflect current reality, or they have new insight to add, direct, contextual access to configuration and maintenance documentation, will ensure your knowledge base always reflects reality.
How a knowledge-management system works
You’re surely familiar with in-application help when you’re filling a form and aren’t sure what to put in a particular field, for example. You can click on the little question mark and get a definition. This type of information is hard-coded, meaning any change in process will have to be changed in every single mention of it in every application, and maybe on every page of the application. Knowledge-centered help federates multiple sources of information into a central knowledge base, which can include this kind of help function, but also other items from other systems.
If you have a company wiki, you can include it as a source, along with your policies and procedures. With a built-in content management system, you can even have your SMEs write articles. Any change in policy or understanding is made once, and accessed from wherever you search. Third-party applications can also be configured as sources, as can documentation relating to them. You can include your email, your internal instant messaging system or company social forums, even FAQs, Favorites, and corporate website pages that are regularly updated.
Imagine then, instead of clicking the question mark and getting a definition, you could ask a question, for example with a process. Let’s say you complete the final step and ask “what’s next?”, and you learn what happens and when, even if it’s technically considered a separate process, going to a different team. Without you having to open a new window or application to find answers on a separate site, a web self-service portal will give you access to the knowledge-management (KM) system. The KM system will take your question, determine what is relevant to your context, and actually give you answers in multiple formats (depending on what is available: Word, PDF, Excel, video etc.), ranking them according to relevancy. It’s a bit like a search engine, but with the added benefit of context. And it’s completely personalizable to your industry and users.
Knowledge-centered organizations are more efficient
When your team members are project and resource planning, they’ll find their productivity improves with quick access to information. When they’re fulfilling customer contracts, project quality will be enhanced because work will be based on deeper, shared expertise and communally developed best practices. When they’re filling in their timesheet and aren’t sure how to deal with an unusual situation, they’ll be able to follow the process without having to refer to a separate document (and timing out), or picking up the phone (and finding their go-to resource went home). And they can always be sure the answers are consistent and accurate, because they come from a centralized knowledge base.
Such a system saves time, frustration, and ultimately money. The right answers at the right time ensure projects run more smoothly, and are less likely to be delayed and more likely to be on budget, improving your margins on fixed-bid contracts. Not dependent on a single person, a knowledge-management solution is living, with every member of your company becoming a subject matter expert in the making, as well as someone who needs information or help from time to time. And during times of transition, you can be sure knowledge is accurately transferred and preserved.
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