Managing Engagements Without Timesheets
By Tim Williams
Have you finally buried the billable hour? If you’ve joined the pricing revolution, your firm is enjoying the benefits of a modern revenue model that generates profits in ways that have nothing to do with hours logged on timesheets. But your operations and finance teams may still be insisting that time tracking is required to effectively manage internal resources. The argument is that without timesheets, how do you know:
· Who is busy and who isn’t?
· Which department is contributing and which isn’t?
· Who is pulling their weight and who isn’t?
Timesheets can’t tell you the answers to any of the above. More importantly, the practice of continually monitoring and reallocating hours in a software system will not help improve the timeliness or profitability of a project. Rather, profitability is determined by how well we defined the scope, how well we identified and allocated resources, and how well we priced the project before we started work on it. And the timeliness of a project will be determined solely by whether responsible individuals are meeting their deadlines, regardless of what they put on their timesheets.
If project management, with input from the entire team, does an effective job up front of identifying how long a particular deliverable should take to complete, then it’s up to the team to manage its own time to meet the deadline. It doesn’t help them to have project management look at timesheets and tell them how many hours they have left on a particular assignment; the responsible parties will have to do what it takes to deliver the output regardless of “hours remaining.”
Accountability, not utilization
In a project-optimized organization, the culture is one of accountability, not utilization. This is a critical distinction, because utilization and accountability are opposing concepts. So observes agile coach David Rice, who describes the difference as follows:
Utilization is the condition of someone or something being put to use or effective use. In utilization-focused organizations, working “long hours” is rewarded. Time is tracked for most if not all activities. Work is estimated in hours and people are grouped together based upon the amount of work estimated. When everyone starts complaining about being too busy, the organization hires more people. Reviews include a discussion of hours worked and how to improve.
Accountability is the acknowledgment and assumption of responsibility for decisions, outcomes and actions, encompassing the obligation to report, explain and be answerable for resulting consequences. In accountability focused organizations, owning a task and getting it done is rewarded. Outcomes (not hours) are tracked on a regular basis to make sure work is getting done. Work is estimated in something other than conventional hours (such as project points, or the “story points” approach used in agile). When the teams think they need more help getting something done, the organization hires more people. Reviews focus on achieving goals and addressing challenges to achieving goals.
In accountable organizations, the question asked isn’t whether or not your teams are busy (they are almost always busy) but rather what is the highest priority work? If the priority work is clearly defined and due dates are clearly set, why can’t the team be accountable for getting it done? If the team can get it done and one team member is not fully utilized on that particular phase of work, does it really matter? With the right pricing, ROI will be delivered independent of the utilization.
Keeping promises
The goal of an effective professional services organization is to get its teams centered on the idea that they’re in the business of delivering outputs and outcomes, not inputs. Inputs (hours, efforts, activities, individual tasks) are only a means, not an end. We’re not interested in micro-managing an individual’s hours or tasks; we’re only concerned with whether or not they are delivering the intended output or outcome, on time and in a quality way.
While it’s useful for timeline purposes to break down large projects into individual component tasks (called WBS or Work Breakdown Structure in project management circles), it should not be the project manager’s responsibility to manage the project at the level of individual tasks. Not only is this an ineffective use of the project manager’s time, it also undermines the culture of accountability we want to create in the organization. Once teams are clear on the needed outputs or intended outcomes and have committed to a timeframe, it’s up to them to manage their individual component tasks in a way that will allow them to deliver a quality output on the date it was promised.
Scope does not equal hours
It’s OK to look at projected hours when estimating the actual internal costs of a project. Projecting the "size" of an assignment is essential in forecasting needed resources and developing timetables. However, once the project (or an individual phase of a project) has started, it’s not useful to use hours as a project management tool.
Effective organizations do their costing accounting and resource planning upfront -– the only time it really matters -- before the project begins. Once the actual work on a project is underway, the only things that matter are:
Is the project meeting its milestones (are deadlines adhered to and are phases of work completed on time)?
Is the project staying in scope (no client-driven changes beyond what was outlined in the original scope)?
Is the project staying in budget (defined by outside supplier charges and other hard costs, not hours worked)?
Next time you find yourself vigorously defending the value of timesheets, ask yourself: should your people be judged based on time spent or work completed?
