Converting a non-billable resource into a billable one when a project cost is overrun can be a tricky situation. However, there are some steps you can consider taking to address this issue:
- Review the Project Scope and Budget: Before making any changes, review the project scope and budget thoroughly. Understand why the project cost has overrun and assess the potential impact on the overall project timeline and deliverables.
- Identify Non-Billable Resources: Identify the non-billable resources currently involved in the project. These could be employees or team members whose time and efforts are not being billed to the client.
- Reevaluate Resource Allocation: Assess the current workload and roles of the non-billable resources. Determine if there are any tasks or responsibilities that can be directly attributed to the project that's experiencing the cost overrun.
- Consult with Project Stakeholders: Discuss the situation with relevant project stakeholders, including project managers, clients, and team members. Make sure to involve all parties affected by the decision to convert non-billable resources into billable ones.
- Negotiate with the Client: If the project overrun is due to scope changes or unforeseen circumstances, it may be necessary to negotiate with the client. Explain the situation transparently and discuss the possibility of billing for the additional resources involved.
- Amend the Contract: If both parties agree, update the contract or statement of work to include the billing for previously non-billable resources. Outline the scope of work, roles, hourly rates, and any other relevant billing details.
- Document the Changes: Ensure that all changes are documented properly, including any agreements made with the client and the updated contract. This documentation will be essential for clarity and accountability.
- Communicate with the Team: Inform the team members about the changes and the reasons behind the decision to convert non-billable resources into billable ones. Address any concerns or questions they may have and ensure everyone is on the same page.
- Track and Monitor the Project: Keep a close eye on the project's progress after the changes have been implemented. Regularly monitor the budget, timeline, and resource utilization to avoid any further cost overruns.
- Learn from the Experience: After the project is completed, conduct a post-mortem analysis to identify the root causes of the cost overrun and the effectiveness of converting non-billable resources. Use these insights to improve future project planning and resource allocation.