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A/E firm takes control of project financial and resource management

SHW Group had a problem with the financial and resource management of projects.

“Most project managers are architects who prefer to design and deliver great structures to clients, rather than dive into the business side of architecture,” said SHW Group Chief Financial Officer Matt Snider. “But the real problem was that we lacked a tool to make financial and resource management quick and easy.”

SHW Group had tried many times and many ways to engage project managers in financial management. The implementation of Deltek® Vision® enterprise resource planning software in 2003 was expected to solve the problem. But despite multiple attempts to increase usage of Vision, project managers kept returning to individually maintained spreadsheets.

The breakthrough came from SHW Group’s Chief Information Officer, Bob Rayes, AIA, NCARB.

Because Rayes is an architect, a programmer and a master of business administration he understood what information was needed, how it had to be displayed, and how to program prototype software.

Rayes wrote code that pulled information from Vision and displayed it in a graphical way that appealed to the architects’ and engineers’ visual orientations. He added the ability to generate user-defined what-if scenarios to see into the future.

“Rayes’s prototype got immediate buy-in,” Snider said. “Its benefits were apparent from the start.”

This prototype was the basis of Newforma Project Analyzer, which SHW Group uses today.

Manage project budgets, allocate people to projects in other offices and much more
“Newforma turned our proprietary prototype into a robust solution,” Snider said. “It has faster performance and allows more detail to be extracted from Vision.

“Newforma Project Analyzer showed us that in a given month, looking 30 days out, we were missing projections by 15 percent,” Snider said. “Six and nine months out the delta was even greater.

“We’ve gotten a whole lot better about future fee projections,” Snider said. “That’s a huge, huge benefit for us in terms of adjusting staff, whether hiring at the right time, reducing staff or redistributing work among offices.”

Immediate, tangible results
Snider noted a number of metrics that testify to the value of Newforma Project Analyzer:

Time sheets: “After implementing Newforma Project Analyzer, people saw how their time sheets contribute to the charts in Analyzer. Timesheet accuracy and promptness surged. On average, across the firm, we were probably two weeks behind on time sheets. Now, our average may be four days.”

Accounting: “We used to go through huge hoops to calculate work in process. Now we have WIP with a click. Same with consultant accrual expense. Consultant accrual used to be calculated with lots of assumptions. Now it’s lots more accurate.”

Consultant payments: “When a PM submits a consultant invoice to be paid, there has to be corresponding budget in Newforma Project Analyzer, or we don’t pay the invoice. As a result, PMs are making sure that consultant budgets are entered.”

Billing: “Because we now have an easy way to gather monthly input from PMs, we accomplish the billing process with two fewer FTEs. Cash flow has improved by getting bills out faster.”

Reimbursable expenses: “In the first two or three days we found $10,000 in reimbursables that had been missing.”
Profitability: “Senior partners have a really simple interface to assess profitability and therefore have good conversations with PMs about projects. We’re seeing improved profitability. Having a clear view of the future is a huge advantage.”

Concentrate on craft and relationships, not on spreadsheets
As a senior project manager at SHW Group, Marty Sims, AIA, LEED® AP BD+C, is deeply involved in the business side of architecture.

“The most apparent difference that Newforma Project Analyzer has made is that it has given an immediate understanding of where a project sits, on a minute-by-minute basis, both from an hours-invested standpoint and a profitability standpoint,” Sims said.

“Before it was very difficult to ascertain that information,” Sims said. “You had to pull the information from various sources.

“Now the software allows you to have a one-stop shop. You can make adjustments very quickly if you see things headed in a direction you don’t want to go, whether from man hours, profitability or a number of other variables,” Sims said. “Not having to slave over spreadsheets has freed my time to do what I really enjoy doing, which is building buildings and maintaining client relationships.”

Ceci Hinojosa, SPHR, LEED ® AP, is SHW Group’s talent manager, helping office leaders schedule staff for projects. “I love it,” Hinojosa said. “Before Newforma Project Analyzer I used a whiteboard and colored magnets to forecast staffing needs. We spent lots of time maintaining the board. Now updates are automatic. When a project manager changes a schedule, it automatically adjusts where people are needed, because all the components are integrated.”
Ceci gains this view of staffing needs for individual offices and the firm as a whole, with the ability to project needs 24 months out instead of the six months afforded by her whiteboard.

“Before Newforma Project Analyzer we spent lots of time on spreadsheets, the whiteboard and keeping up with what was going on,” Hinojosa said. “Now we have higher-level, more strategic, more holistic conversations.”

Take partners out of the enforcement business
Newforma Project Analyzer is changing organizational behaviors in ways that top-down directives failed to accomplish. Project teams are complying with best practices regarding time sheets, consultant fees, profitability targets and more because they see how those behaviors improve the appearance of the charts and graphs in Newforma Project Analyzer.

“Partners are out of the business of putting thumbscrews to people to make them comply with best practices,” Snider said. “It just happens in the course of business.”

Execute the plan to earn the profit
“If you build the budget and staff the project properly, the PM’s job is simply to keep it on track,” Snider said. “The profit results automatically. Just carry out the plan and the profit’s there. Newforma Project Analyzer makes it simple to do just that.”


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