Manik SanadiHead-Global PMO| Quest Global Engineering ServicesPune, Maharastra, India
Hi friends, I am working at redefining project profitability for projects where nature of project work varies a lot. The project contracts also vary from Time & Material to Fix price and sometimes in between these two. Projects are of engineering design or change notices or support to any task in product lifecycle. It is a service industry and majority of cost comes from talent. Would appreciate your guidance on how we can define project profitability, which kind of costs should be included as service industry, and which should be considered as overheads. Your guidance and views are highly appreciated. Many thanks! Saving Changes...
I would review this with your Finance department as they likely already have policies in place about which costs get borne by projects and which don't. In project-oriented organizations, for example, all costs are pro-rated across projects including operational "keep the lights running" ones. In most other organizations, costs which are directly attributable to the project including labor, materials & equipment are charged, but not overhead non-labor costs which would be incurred regardless of whether the project was run or not.
Project Manager| AWR Development (BD) Ltd. Cox's Bazer , Bangladesh
Hi Manik
Redefining project profitability in a service industry requires a clear understanding of both direct and indirect costs, as well as a robust method for tracking and allocating these costs.
By establishing a comprehensive framework for measuring profitability, you can gain valuable insights into project performance and make informed decisions to enhance overall profitability.
Engaging with stakeholders and continuously refining your approach will also contribute to more accurate profitability assessments.
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