Risk Involved in Project Profitability - PowerPoint PPT Presentation

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Risk Involved in Project Profitability

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Every business comes across risk threats that could impact their success negatively. With added focus on your firm’s weak areas, you can aid in increasing your profit margins and save losses resulting from wastage and inefficient management. – PowerPoint PPT presentation

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Title: Risk Involved in Project Profitability


1
Risks involved in Project Profitability
2
  • Every entrepreneur needs to be proactive in
    identifying underlying problems that are plaguing
    the firm and prioritize improving the operational
    bottlenecks that slow work down, and lead to
    budget overruns. One can contribute to a
    substantial increase to the bottom line and help
    the firms project managers to perform more
    efficiently.
  • Here are the list of risk involved in Project
    Profitability ,

3
Inefficient Planning
  • Planning is the vital part of any project and any
    good project starts with an estimate, yet many
    firms fail to have a sound well-researched
    estimate in place. One such example could be-
    Using standardized estimating practices, such
    as Top-down estimating without verifying the
    necessary breakdown of costs. This can lead to
    project fees to be incorrectly calculated and
    hence business may suffer a huge loss.

4
Unsupportive Culture
  • A firms culture is hugely responsible for the
    smooth functioning and success of the firm. The
    daily operations are impacted by the culture
    which is driven in a firm.
  • The culture, in any firm, takes years to form and
    implement. It also depends a lot on the owners
    and their willingness to improve their systems
    and processes in order to increase employee
    engagement and productivity.

5
Lack of Financial Management Skills
  • Most Project Managers belong to technical
    backgrounds and prefer to focus on delivering
    high-quality projects, client satisfaction, and
    meeting deadlines. While they might be
    responsible for many financial management aspects
    of a project the least focus is paid to get them
    trained in these skills. 
  • Skill training and development can go a long way
    towards building a team of skilled and profitable
    project managers.
  •  

6
Employee Turnover
  • Employee turnover is a very costly human
    resources expense. The cost of turnover goes way
    beyond just the expense of recruiting and
    training a new staff person in a position. 
  • Failing to retain good employees can also cause
    client dissatisfaction and potentially losing
    them to competitors as most of the clients dont
    prefer a frequent change of staff members.

7
Mismanagement of Resources
  • Optimum utilization of peoples skills, talent
    and time are one of the keys to your firms
    success. It all starts by regular tracking and
    management of resources and ensuring that the
    right people are doing the right jobs. While most
    financial management reports focus on performance
    in the past, the key to effective resource
    management is to be able to forecast the future. 

8
  • Taking all of this data into account and
    determining efficient Resource Planning systems
    can help you provide much-needed idea and
    visibility about your three to six months (at
    least) future resourcing requirements, and save
    your firm money by ensuring that hiring decisions
    are made at the right time.
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