This is an excerpt from the book All Your Money Won’t Another Minute Buy: Valuing Time as a Business Resource by Curt Finch, Founder and CEO of Journyx.
“At the end of the day, our attention is all that we have.”
– Ken Burns
The phrase “time is fleeting” has never had more relevance than it does in the 21st century as business leaders and employees alike confront overwhelming demands on their time. Time has become as critical as money. Many companies, however, are not yet accustomed to allocating and investing it with the same level of care as they would with more traditional assets.
Most business and project leaders understand that time must be managed, accounted for, and invested in ways that maximize return, but this is often easier said than done. Companies seldom possess the right processes and infrastructure to make the most of time resources. They often confuse the core business process of time resource allocation with simple timesheets or time management calendars. This is as dangerous as confusing a simple check register with a company’s capital investment strategy.
To allocate and manage any resource, it must first be seen clearly and then tracked carefully. Time tracking should be a fundamental part of any business. Almost every business tracks time at some level, even if only for payroll.
At the most basic level, some companies employ a simplistic, homegrown system that is based on spreadsheets or paper and pencil. Yet even companies that have fully automated time tracking systems sometimes fail to leverage those systems to derive actionable workforce intelligence that drives profits up and/or costs down.
Leveraging such systems is neither as easy nor as obvious as it seems. Some companies understand the potential gains associated with managing time as an asset, but lack the knowledge, tools or resolve to do so. Many others succumb to a misinformed, unnecessary distrust of time tracking. Still others mistakenly believe that time tracking systems are simple, and as a result, they internally develop or buy inadequate systems that fail to deliver real value to the entire enterprise.
An expertly developed and finely tuned time management system can become a window into the real-time costs of any organization, especially if it provides:
- Access to and a thorough understanding of costs at every level of the business—at a client, team, task, project, business unit and company level.
- Complete visibility into these costs for everyone in the organization who can impact them.
- Power to redeploy and shift time resource investments to optimize processes, reduce risk, thwart competition, drive revenue and increase both profits and job satisfaction.
The benefits of such a system will make the relationship between time and money crystal clear. While identifying costs is nothing new for most companies, many experts agree that traditional cost accounting methods may not yield the right information for some of the most vital initiatives that companies undertake, such as competitive strategy formulation and execution or project portfolio management. New ways of understanding costs, such as activity-based costing, have emerged to help companies redefine and realign their strategies. These new methods for deriving workforce intelligence, however, are only as good as the data that feeds them, and time data is a critical input.
Identify Core Processes
To understand time tracking as a core business process, first consider that time data feeds four fundamental business functions: payroll, billing, project management and business strategy development.
Unfortunately, most solution providers address each of these functions independently rather than integrating them. For example, some companies focus specifically on payroll automation software for HR departments. These packages are so finely tuned for managing payroll that they are unsuitable for project management or billing automation. Likewise, many project management solution vendors are great at tracking time for project management, but can’t do payroll or billing automation.
The ideal solution offers the ability to automate time tracking for project management, billing and both professional and hourly payroll. It should also enable a qualitatively new function: strategic analysis. By tracking actual costs by project, companies can gain valuable workforce intelligence for formulating better strategy by understanding which of their projects are profitable.
An important first step to success is to know whether or not projects are on schedule and within budget. This step alone, however, is not enough. Despite project managers’ keen abilities to remain within schedule and budget constraints, all too often they find themselves out of a job when their projects, product lines or research portfolios are deemed unprofitable or excessively risky. Budgets and schedules alone won’t make a company successful; only projects that create profits will drive success. All projects, whether internal or external, must somehow lead the company to greater profitability. If they do not, they will either be canceled or fail, sometimes disastrously.
The companies that skillfully manage their portfolios of internal and external projects—ensuring that all projects help the company make money—will be the companies that survive and succeed in both good times and bad. The hard truth is that no company can afford to mismanage its project portfolio. Whether that portfolio contains two or 200 projects, the goal remains the same: profit.
To reach this goal, companies need to be smarter about how they collect and use critical time data to evaluate project cost and performance, allocate labor and other resources, and estimate future project schedules and costs. They can reduce the risk of failure by understanding the true costs of their project in a timely fashion, and by taking necessary action sooner—when the chances of success are greater.
The bottom line is that the right time data, accessible in real-time, is critical to gaining valuable workforce intelligence for solving many business problems.