Handling Multiple Projects With a Single PO: Set Yourself Up For Success
You just landed a coveted umbrella contract from a large, reputed customer. You have a blanket purchase order that assures funding of say US$ 1 Mn over a one year period. The contract stipulates that you must deliver a host of services to be defined in separate projects. Not all such projects can be defined in the beginning, therefore a few of them may come up later. Subject to your satisfactory performance, the contract is renewable annually.
You know that there is much more needed for your success than delivering the deliverables and billing.? You face several operational challenges
Any of the following types of projects may be the part of the single PO.
1. An implementation project in India
2. A performance testing project for the client's application suite.
3. A mechanical engineering project for one of the client's business units.
4. A digital transformation project for another business unit.
5. A fixed-price project worth $20,000 for a specific scope of work.
6. An annuity-based project for ongoing support and maintenance services.
If you have been following this PSA Insights series, you would have read about operational challenges in different kinds of projects like the above.
Delivering all the projects within a common PO budget and ensuring that everything is done right requires that you stay on top of the situation at all times.
Let me provide a glimpse of the challenges.
1. Over all budget: You need to know how much budget allocated to individual projects has been used, how much more you are going to consume and how it all adds up at the overall contract level.
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2. Project invoicing: Your customer may need projectwise invoices. You must track billable work done projectwise and generate invoices.
3. Consolidated Invoicing: Alternatively, the customer may require you to send a single common invoice for all projects, necessitating the ability to break down the invoice into project-specific line items with accurate billing amounts
4. Project budget balances: You must know the balance budget amounts of each project. Your customer may ask for such status reports.
6. Tracking the actual and the projected: At any given point, there is a need to track actual and projected projectwise deliverables, profitability, utilization of allocated funds, and utilization of the overall PO funding.
Even for separate projects, a typical enterprise system struggles to keep up with the difficulties in managing? revenue forecasts, revenue recognition, and? cash flows detailed in the articles linked here. You can imagine the complexity of managing multi-project POs.
The solution
Only a PSA software that has enterprise-wide footprint, integration, and configurable workflows can manage all the above.
Such a capable and flexible PSA software lets you define and link individual projects to a single purchase order. It lets you set each project up with details of budgets, deliverables, billing schedules etc. It lets you soft-book or allocate resources for projects. It lets you track progress and costs. It lets you prepare the prognosis of parts yet to be completed. Such a PSA lets you automate billing and invoice dispatch as per your contract.
PSA software can provide you complete visibility and control month-wise and projectwise. It lets you roll up everything to the level of the umbrella PO.
Whether you need to execute multiple projects within the same PO like the above, whether your need is dealing with multiple POs in fixed-price projects, or whether you must start working on a project without a PO, a powerful and flexible PSA sees you through.
A capable PSA software can provide operational flexibility while retaining full visibility and accountability.
Kytes is the PSA that has all the above and more. Please contact us for more details and a demo at [email protected]