Kim Koster, vice president of GovCon Strategy at Unanet, co-author of the 2020 GAUGE Report and GovCon Expert, has published her latest article as a member of Executive Mosaic’s GovCon Expert program on Thursday.
In her most recent article, GovCon Expert Kim Koster shared her insight into the critical analytics capabilities that government contractors need to have in today’s efficiency-driven business environment.
You can read Kim Koster’s latest GovCon Expert article below:
The Analytics Answer
By Kim Koster
The shift to remote working during the COVID-19 pandemic has put even more pressure on government contractors to develop new operational efficiencies. To do so, they need to see the entire picture and what’s happening across their business and within individual projects.
For some organizations, the big picture is elusive. In the 2020 GAUGE Report from Unanet and CohnReznick, 16% of survey respondents listed “lack of visibility into project status” as the top project management challenge standing in the way of improved efficiency. That’s up 60% from the previous two editions of the annual government contractor benchmarking report. Asked to identify the issues that cause them to lose the most sleep, executives at government contracting firms put operational efficiency at the top of their list. (see below)
If seeing the whole picture is key to making informed decisions and gaining tighter control of the business, how do you get there? How can organizations put their people, processes, and tools to work to make their business more efficient and profitable? It starts with robust analytics. Today, many government contractors lack the information to know where they stand, and how to improve. Analytics capabilities can fill that void, providing important insights that can lead directly to improvements in areas they may otherwise have overlooked.
From more accurate time and expense tracking to more intelligent forecasting, strong analytics capabilities can reveal important opportunities for efficiency gains across the organization. Process-enabling applications empower a company to report on all aspects of status and performance in great detail. Those insights can not only show where improvements can be made, but also powers continuous improvement. They can also contribute to agility, which is a particularly important trait in today’s uncertain business landscape. More than ever, government contractors need the ability to quickly adapt to the needs of the moment.
Achieving a strategic level of analytics maturity should be on the mind of every project-based business, especially professional services firms. It is important to understand where your organization stands in terms of analytics maturity, on a spectrum that ranges from, “We have no idea what measures we should be tracking” at one extreme to “We use analytics and the associated KPIs to drive business decisions and overall strategy” at the other (as depicted in the graphic below).
In a perfect world, people, processes, tools, and culture would sync within an integrated system to provide an elevated level of visibility and control across the organization. But, we live in a far-from-perfect world. How, then, to move toward the analytics ideal — and the efficiencies you need in today’s environment? Here’s a playbook for moving up the analytics maturity ladder:
To move from Level 1 to Level 2:
- Agree as an organization that you are ready to climb the ladder!
- Create business goals and use them as the basis for formulating key metrics.
- Define a communication plan for flow-down of goals throughout the organization.
- Define KPIs and establish communication to all relevant teams.
- Assure the chosen KPIs will help the teams be successful.
- Ensure there is a repository for easy access (likely Excel).
To move from Level 2 to Level 3:
- Ensure that relevant teams know their part in achieving goals.
- Ensure everyone knows where to get information.
- Ensure that information is role-based and appropriate.
- Align all role-based KPIs to enterprise goals.
- Drive all goals down to the lowest level of the organization.
- Invest in tools to capture data and integrate with analytics tools.
- Communicate so everyone understands what is being measured and the desired results.
To move from Level 3 to Level 4:
- Ensure that employees are trained and know how to find information to make decisions and improve performance.
- Drive decisions across the enterprise by data.
- Use metrics to drive business decisions around financial performance, project execution, and resource management.
- Use KPIs to directly influence achievement of business goals.
- Consider past performance and apply learning to current forecasts.
- Make a business intelligence tool the central hub of information across the enterprise.
- Use analytics tools to reduce manual data touchpoints as much as practical.
- Bring users into the analytics discipline to help drive business decisions and strategy.
And finally, to get from Level 4 to Level 5:
- Use data (historical and current) to drive business decisions.
- Inform the recruiting process with analytics to attract the right people for the right roles.
- Ensure KPIs are tightly coupled with organizational goals.
- Use analytics to align corporate KPIs and goals with employee performance reviews.
- Ensure everyone knows where to find the KPIs relevant to them and how to read them.
- Use Analytics tools to provide all necessary information to everyone in the organization.
- Build Analytics tools and the information they yield into the very fabric of the business.
- Align forecasts and plans with corporate goals and objectives.
- Use KPIs to drive achievement of business goals.
No matter where your organization falls on the analytics maturity spectrum, its ability to advance on that spectrum depends greatly on the business tools it has at its disposal. It’s vital that government contractors choose and use those tools wisely, starting with the foundation — some kind of integrated business intelligence tool. Use the quick checklist below for guidance in evaluating and choosing a tool that’s best suited to your organizational needs, or to assess the tool your organization is currently using:
If too many boxes are left unchecked, the time could be ripe for your organization to consider a tool that comes with an analytics upgrade.
About GovCon Expert Kim Koster
Kim Koster is vice president of GovCon Strategy for Unanet, a leader in ERP software purpose-built for government contractors. She supports government contractors in their effort to streamline project management, accounting, and other businesses processes.