A software development firm thought they were killing it. Every project came in on budget. Then we looked deeper with ERP Consulting. They were actually losing money on 40% of their projects because of scope creep.
Tracking Billable vs. Non-Billable Time
They were tracking total hours, but not categorizing them properly. A developer might spend 20 hours on a feature and 10 hours fixing a bug. The feature was billable; the bug was not.
- Implement a simple time entry system with project codes.
- Create alerts when a project hits 80% of its budgeted hours.
- Review project profitability reports weekly, not monthly.
Better Scoping for Future Projects
With real data from ERP Consulting, they started scoping projects more accurately. They stopped taking on loss-leader projects disguised as ‘strategic wins’.
Profit margins went up by 12% in one year. Data beats intuition every time.