Case studies / Professional services
Case studyProject margin and billing for a global services firm
A professional services firm with several hundred consultants moved project plans, time, expenses, billing and revenue recognition onto Dynamics 365, seeing margin during delivery.
Overview
An engineering and management consultancy with offices in Europe, North America and Asia, delivering advisory and technical projects to infrastructure, energy and public sector clients. Partners run their own client relationships and have traditionally managed projects in their own way.
Scale. About 400 consultants across nine offices, with a mix of time-and-materials and fixed-price projects and a growing share of multi-office engagements.
The challenge
The firm's partners could tell you a great deal about each client. What they could not easily tell you was whether a given project was making money until it had finished and the final invoices had been reconciled.
Project plans, time, expenses and invoices were tracked in different tools. Plans sat in spreadsheets and scheduling tools, time in a timesheet system, expenses in a card platform and invoices in the finance package, and none of them shared a project code reliably.
Margin was known only after projects ended. Fixed-price projects that overran were discovered too late to discuss scope with the client, and time-and-materials projects were sometimes under-billed because time had been booked to the wrong code.
Billing depended on the partner. Some invoiced monthly, some at milestones and some when they remembered, and contract terms such as caps, discounts and expense rules were applied inconsistently.
Revenue recognition for fixed-price work was calculated in spreadsheets at quarter-end. The finance team spent days on it, and auditors asked increasingly pointed questions about the method.
Multi-office projects made all of this harder. Consultants from three offices on one project meant three cost rates, three currencies and three views of progress.
The solution
Every engagement in Dynamics 365 Project Operations has a contract, a plan, a budget and billing rules. Resource managers assign consultants from any office, and the system applies the right cost and bill rates automatically.
Consultants capture time and expenses against project tasks on desktop or mobile, and expense card transactions flow in automatically. Approvals sit with project managers, who can see the effect of each entry on their budget.
Billing follows the contract's rules, whether time-and-materials with caps, fixed fee at milestones or a mixture. Draft invoices are generated for review, so partners check rather than compile them.
Finance handles revenue recognition for fixed-price work using an agreed percentage-of-completion method, applied the same way on every project. Multi-office projects share revenue and cost between entities according to the firm's rules.
Analytics show utilisation by office, grade and person, and margin by project, client and partner. The CRM integration links the sales pipeline to resource planning, so likely wins appear in capacity forecasts before contracts are signed.
The engagement
- Nine months
- Six specialists
- Billing and revenue rules, Dynamics 365 Project Operations, time and expense, billing, finance and revenue recognition, utilisation and margin analytics, five integrations and an office-by-office launch.
Integrations
- Collaboration tools
- HR and payroll
- Expense cards
- Banks
- CRM
How we delivered it
- 01
Agree the rules
Six weeks
We defined project, billing and revenue rules with delivery and finance leaders before any configuration. The workshops were sometimes uncomfortable, but they produced one set of rules that both sides had signed.
- 02
Configure and build reports
Twelve weeks
We configured Dynamics 365 Project Operations, time and expense, billing and finance, and built utilisation and margin reports that partners helped design.
- 03
Migrate and rehearse close
Six weeks
Active projects were migrated with budgets, contracts and work in progress. We then rehearsed month-end close twice, including revenue recognition, before the first office went live.
- 04
Office launch
Fifteen weeks
Offices launched one at a time. After each launch we tuned reports with partners, so the analytics answered the questions they actually asked in their monthly reviews.
Results
- Project margin visible during delivery
- Consistent billing against contract terms
- Weekly utilisation by office and grade
- Revenue recognition run as a routine month-end step
Project margin is now visible during delivery. Partners review margin monthly against plan and act on overruns while there is still time to agree changes with the client.
Billing follows contract terms consistently. Invoices go out on schedule, caps and discounts are applied correctly and expense recharges follow each client's rules.
Utilisation is tracked weekly. Office leaders use it to move consultants between projects and offices, and the firm has a clearer basis for hiring and promotion decisions.
Revenue recognition has moved from a quarter-end spreadsheet exercise to a routine month-end step, with a method that auditors can follow from the system.
Consultants noticed the difference too. Expenses are reimbursed faster, timesheets take less time to complete, and project managers spend less of their week chasing codes and corrections.
The hardest month of the project was agreeing the billing rules. Every month since has been easier because of it.
What made the difference
Finance and delivery leaders had to agree billing rules before any configuration.
