Here are 3 reasons why your services projects aren’t profitable and how to go about it

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A services project requires a prudent allocation of resources, business management suites, and top management handholding.

Project managers in the service industry have two important goals to achieve:

a. Produce the best quality products for the end-user.

b. Deliver it on-time.

But seldomly does the company asks them about the challenges they face while implementing the milestones. 

Here is a list of critical parameters that decide the success of project managers:

a. Access to business management suites like ERP, CRM, and HRMS software that introduce automation.

b. Judicious allocation of resources.

c. Handholding to deliver projects under stringent budgets and within the stipulated time.

This blog will discuss why a services project may not be profitable and what you can do about it.

1. Less project visibility.

Often, the project managers don’t have a project management tool to track the project’s progress or use different tools to handle various project aspects. It leads to diminished visibility regarding:

a. Current status of the project.

b. Who is doing what.

c. Updating dashboards

d. Monitoring KPIs.

e. How are resources being allocated.

Because of the reasons as mentioned above:

a. Different teams fail to coordinate effectively.

b. Resources are wasted.

c. Project status and financials aren’t aligned.

d. Managers waste time reconciling data across different project management tools.

e. Managers get an unrealistic picture of the project’s health.

2. Wasted resources.

A critical parameter to judge a services project’s success is the number of billable hours per employee. It helps maintain healthy cash flow and boost profits. But that is not always the case. A business often wastes a lot of resources. The following points explain how:

a. Assigning tasks that require the use of skills A, B, and C to an employee who possesses skills X, Y, and Z.

b. Not automating manual tasks that waste employees’ time, which could have been used for performing strategic tasks that require creativity and intelligence.

c. Manually filling, updating, and reconciling financial data that lead to human errors.

Also Read: How do ERP systems help improve your cash flow?

3. Poor collaboration.

Project managers face difficulties communicating critical business details with their team members and employees working in various departments. The following reasons explain why:

a. Existence of information silos that don’t allow vital information to flow from one department to another.

b. Unavailability of business management software such as CRM (Customer Relationship Management) systems leads to miscommunications and delayed feedback.

c. Timesheet approvals and project statuses are given verbally instead of tracking them on software systems. 

Inaccurate communication exceeds the budget allocated for the project and decreases expected profitability.

After learning the main pain points, it’s time to see the available solutions.

A practical solution for companies to deal with a services project is to combine business automation suites like ERP, CRM, and HRMS software systems. These systems provide better control and help boost profits because of the following advantages:

a. Improved project visibility by providing access to the project’s current status, updating dashboards, monitoring KPIs, and checking how resources are distributed. Business management suites substantially increase project profitability and weeds out inefficiencies in the system.

b. Judicious allocation and distribution of resources in the enterprise. The business management suite knows all the employees’ skills and abilities and assigns tasks based on that. It also provides correct estimates concerning project profitability based on factors like employee presence/absence, market conditions, and current government policies.

c. Improved collaboration by destroying information silos and allowing a healthy flow of information between various departments. It also automates timesheet approvals and updates project statuses from time to time.

Also Read: Utilizing Your CRM Software the Right Way!


Service projects require autonomous software systems that can handle the nitty-gritty of a services projects right from initiation to conclusion. ERP, CRM, and HRMS software allow business stakeholders to get a comprehensive picture of all business activities, see what everyone is doing, and make last-minute changes whenever possible. These factors enable businesses to produce cutting-edge products and increase their profitability.

At Sage Software Solutions (P) Ltd., we are home to world-class ERP software and CRM software that will solidify your business tech support fundamentals and enable you to build a customer-centric organization. To know more about it, SMS SAGE to 56767. You can also write to us at

Disclaimer: All the information, views, and opinions expressed in this blog are those of the authors and their respective web sources and in no way reflect the principles, views, or objectives of Sage Software Solutions (P) Ltd.

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