Episode 106 Transcript

Brent Trimble: Hi everyone, I'm Brent Trimble. Welcome back to another session of The Pursuit Power Half Hour. Today, we're going to talk about the demise of the billable hour. For decades, billable utilization and chargeability have been gold standards in professional services—the one metric that seemed to matter most. Many of us are learning that hitting 90% utilization doesn't always equal success. This can often hide deeper issues like burnout, misaligned expectations, and low client satisfaction. The real question is: What are we actually measuring?

Today's session, we're exploring how PMOs and delivery leaders are redefining what healthy delivery looks like. We'll unpack the shift from time and materials to value-based models, what it takes to build maturity within your organization and in partnership with your clients.

I'm joined by Kyle Sandine, Associate Director of PMO and Delivery Center of Excellence at Adage Technologies. Kyle's leading this transformation at Adage, shifting the focus beyond margins to uncover the indicators that truly forecast success, making him the ideal guest for today's conversation.

Kyle, welcome. On behalf of many folks who have struggled for years learning to embrace timesheets and chargeability, I think this will be a great session. Tell us a little bit about you and Adage Technologies.

Kyle Sandine: Yeah, thanks so much for having me, Brent. My name is Kyle Sandine. I am the Associate Director of PMO and Delivery Center of Excellence here at Adage. We are a software, e-commerce, and AI web consulting firm that uses advanced solutions to solve complex challenges. I've been here a little over six years now, in a PMO capacity for slightly over three years. I’m really excited about some of the changes we've been able to make. Kantata has enabled us to drive some of the change and transformation we're going to talk about today.

Brent Trimble: That's great. We're going to dive right in. This idea of transitioning out of the billable hour model has been talked about in the industry for quite some time. When we discuss this with a potential partner or a client, there's always an interesting inflection or salient point. When did you first realize that utilization margins weren't enough to define delivery success? Was there a specific aha moment, a project, a trend, a pain point, or some recurring theme that triggered how you thought about and defined healthy delivery, healthy PMO?

Kyle Sandine: It started, I think, in 2023 when we were starting to review some of the ways that we were setting up our documentation and really making sure that as we started to embark in what it meant to be more formal with our delivery and standardize with some of the access to data that we had available since coming under Kantata.

We had a project lifecycle document that was intended to be one that called out project themes, company needs, and all of that through the lifecycle of the project. At the time, it was meant to provide a way for us to compare basic project metrics to reference back to for upcoming projects as a means of continual improvement, which was only happening at the end.

Pretty quickly, it became apparent that we were missing key elements within our projects and understanding that every project is nuanced. We didn't have a format to start documenting the subjective elements for every project. Each project is different. Each client is different. The risk tolerance of everyone is different. Simply saying that two projects side by side came in on time, on budget, and within the timeline doesn't capture everything that happens underneath the surface. We were not diving into that at the time.

The document started to evolve from being a project closeout form to more of a project story form. We began tracking this at the beginning of the sales process to understand everything needed up front. Throughout key milestones and delivery phases, we checked in with the project team and realized we could get more meaningful data from the client team as well. This ensured their satisfaction, team support, and the overall needs of both project and client teams were understood. We could compare objective data with subjective data, folding in much of the nuance and subjectivity that comes with projects, which we weren't capturing before through just timelines and billable hours and the general way that we've looked at projects historically.

Brent Trimble: When you started embarking on this in 2023 in building this complete, comprehensive, cohesive story rather than just the hard and fast metrics, did you codename this or keep an internal initiative or call this a new way of working? What was the internal catalyst or some internal momentum around that?

Kyle Sandine: I think the initial part of that document was really just a data dump at the end. Once we realized why a certain phase of a project went well versus a different one, it became more tactical very quickly. As the projects we were starting to do this on came into light, we had a few that were immediately apparent—the timeline was difficult for a particular project, and everybody was feeling a lot of pressure to get it done. Being able to hit the timeline and forcing everybody to fall into what the client expectation was for that particular delivery date, the hours were all good, the scope was all good, but there were some things coming in that we really didn't see, that we couldn't insulate people from without starting to ask some of these questions.

As we were putting it into practice, there were a lot more questions that came out instead of just going into a report and pulling out, "Here's how this project phase ended, and wow, that's great; we hit the margin.We hit the hours that we wanted." I had unhappy people on the project side who were like, "Why am I feeling this right now?" Without being able to ask those questions in a forum, we put things into place quickly so that every few months we were checking in with the project in a specific and intentional way, in addition to all the subjective ways we were doing it throughout the timeframes in between to make sure that people were starting to feel heard and that this was a new way that we were gauging the success of a project. It wasn't just the dollars and cents at the end of the day.

Brent Trimble: Someone participating, watching, hears this and thinks, "Gosh, that's great, a holistic, every dimensional view of the project.” Time and materials, retainer, whatever the conventional rubric is, is safer. Doing things like introducing value-based work brings more ambiguity and risk. What tangible steps did you take to build in the machinery and the metrics to support this new way of working?

Kyle Sandine: I don't think those hurdles have really gone away for us. To make the analogy, it's how spread out the hurdles are along the race that makes it challenging or not. In any kind of race, when things are all coming at you very quickly, it is very hard to stay in rhythm and form without a foundation to work from. The change management element is something that we were very intentional and methodical about in making sure that everybody understood the granular details of why we were making some of these changes. To your point, our internal teams demonstrating what it means to be billable versus profitable is a topic that persists. The hours to goal is a tangible, objective way to say, "I'm doing my part, and look how good I'm doing from what I'm able to bring in from a revenue perspective or anything like that." It forces us to change and mature into a different way of thinking. The value or fixed bid type of models, when the game you're playing now, the race you're running, is a little bit different, trying to focus on profitability by not billing where you were billing before, but still bringing expertise and valuable skill sets that we still need on the projects. We're just leveraging people's talents in a different way.

Making sure that as the change is starting to happen, there's a foundation to work from, and building a change management form out of that, allows us to say we're still doing the same things, but the way that we're going to run this race to address these hurdles is going to be different. From the client side, the risk is lessened in this format. On time and materials, there is a little bit of shared risk; you may not know when something's going to go over budget or the assumed risk is different. Where our teams and our client teams get to work more collaboratively is in a value-based format. We are able to really focus on scope and scope creep, the timelines, and setting those expectations. If the dollar amount is set and we've won the work and the client feels like we're the best fit for them, that is already a great pairing.

When it comes to some of the advantages for us to be in a fixed bid format, there are different questions that need to be asked and different ways to approach the work. It becomes more collaborative, and the understanding of the project becomes deeper than perhaps approaching it in a time and materials way, where the fluidity is greater. There are more bounds in this more fixed or value-based format.

Brent Trimble: You mentioned the benefit to the client. What is the engagement? What is the governing statement of work or pricing dimension? Without giving away anything proprietary, if we're a client of Adage Technologies and they've selected you for this work because of the fit, the expertise felt right, you're the right partner. What does that contract look like to them in high-level abstractions?

Kyle Sandine: For us, we've had the opportunity to do a lot of repeatable work. Some of the things that we're able to turn around, being somewhat in the web space, we have the benefit of learning and leaning on past experience very quickly. We get into the things that are in our wheelhouse.

Being able to leverage that collective knowledge and really lay out, "Here's the very granular details of what you're going to get out of this project, " and being able to explain it through the proposal phase, through the SOW and negotiation phase, and really have a throughline throughout the project—these are the things our clients are going to come to expect and have come to expect. There is some understanding that it's not just a document put together by one person. It is something that everybody has bought into and understands, here's where we are, really understanding of the scope.

Here are some things that we need to work with you on collaboratively to understand: this is what you need in order to serve your people better. Is that an improved search solution? Is that an improved way of personalizing data for people when you come to the various sites? Those might be things that we understand upfront how to do. Then it's getting into that custom, nuanced field that we can go back to and say, "Here's where our bound end in the scope of work of explaining, here's what we're doing; now we get to really have fun and say, we understand what personalization means through the form of an SOW in a legal document. Now let's go bring it to life for you later."

Brent Trimble: You're going through this transformation, the shift from classic T&M pricing toward this dimensional, fixed price, cohesive value solution. How has that affected your delivery team and their satisfaction? Have things like retention improved? Are you able to match people to the right work and propensity for success and skill? How has that helped your staff, your talent, either positively or negatively?

Kyle Sandine: I think it's been mostly positive. The power of having a PSA tool in Kantata or anything that's going to give a PMO visibility into things that the high-level metrics are not going to be able to do makes things much easier at the end of the day.

The way that we've constructed our projects and our reporting really allows us to set objective measures side by side to say, here's how these projects went well, and here's some of the things we have to mitigate for next time from a risk perspective. Here's what a couple of people that were on projects the last time around, what they were impacted by. Are they going to encounter some of those things again today?

Leveraging the skill sets in the way that we've been able to look at what the project needs, understanding what some of the outcomes the clients are looking for, and being able to weave all of that nuance together is really the way that we've been able to start building out what a more project-based team looks like. We're setting our people up for success, then ultimately setting our clients up for success.

We get to react to things quicker. We have the health data that we're able to rely on in real time, so we're not looking back through spreadsheets or looking back through some of the historical things from projects of two or three years ago. Through categorization of all of our data and being very strategic and mindful about the different ways that we can categorize it, it makes for faster feedback loops. Things are more data and sentiment driven, in addition to being able to now collect data like Pulse, where our people are telling us in real time how they feel about being on a project and how that correlates to how the client is feeling. Then, how does that match up to how the project-based metrics are going?

I think those all weave into a Venn diagram of circles with project health sitting in the center. If we're not setting up our people for success, or we're not setting up our people for the type of work that is going to be requested from the client, we all fail. There's no sense in not trying to give as much insight to the data that's available to us and not make those decisions.

The faster feedback loops and being able to see things in real time has made all of those things much faster. We're not waiting for an employee survey at the end of the year to find out that something in February could have been mitigated. Nobody had the opportunity to say it or it wasn't raised to the right people within the organization.

Brent Trimble: That makes sense. Real-time, timely insights that lead to greater foresight. For those who are in transition, contemplating some type of transformation from classic staff plan modeling or time and materials modeling, what's your suggestion for the first step they can take as they start to move toward a more value-driven delivery model?

Kyle Sandine: From my perspective, the first step is a two-pronged approach. It's an approach that we were able to take and leverage. One of the prongs is really understanding the how's and the why's of your projects. If they're repeatable or have common themes that you can extract, that is the first thing. Couple that with creating a framework that will allow you to collect, analyze, and most importantly, take action from the data.

It's easy to chase trends, but if you don't know the impact or how to apply them to your business, the exposure is much greater. Most of our clients and teams here within the organization expect smooth operations at the surface. If there's something happening beneath it, allowing those two foundational things to be set in place becomes bottom up when you start to address the fires at the surface. You can step into that fire with confidence to support the employees and the clients you're delivering on.

It's important to say we're still very much in the transformative stage. We don't have it 100% figured out and will always have opportunities to live on this spectrum of time and materials and fixed bid, moving toward true value-based pricing, which I think is a privilege. It really wouldn't be possible without the leadership team and the managerial lead team we have here, which has embraced the fact that data, poll sentiment, and the conversations we're having on a daily basis are available to make the most informed decisions we can.

Brent Trimble: That's outstanding. Kudos for being transparent in the journey and description of your journey; it's not perfect, but you're well on your way. Thanks so much for sharing this experience. It's a topic we've spent a lot on our pods and written about. We've had authors on talking about this idea of moving to more of a value-based approach. It's great to hear some real-life examples of how you're doing that.

To everyone watching, we appreciate you joining us for this session. We hope you got valuable insights and some actions you could jot down and take from it.

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