Glossary

The glossary provides an organized repository of definitions of concepts, key performance indicators and roles that are used across Conduite applications and documentation. It is the place where you can dig deeper into how Conduite works. It is also a great training resource for your team. We advise you to read the glossary in order.

Key Concepts

Key Concepts

Business Pipeline

A Business Pipeline, or pipeline,  is a visual representation of the stages involved in a sales process. It is a structured approach to managing a business's sales process and helps organizations to track their progress in acquiring new customers and generating revenue.

The pipeline typically consists of several stages, including lead generation, lead qualification, proposal, negotiation, and closing. Each stage represents a milestone in the sales process and helps sales teams to identify where a lead is in the sales cycle.

The pipeline is valued by the sum of the Expected Value (EV) of the opportunities in contains.  Once won, the EV associated to a opportunity disappears from the pipeline so more must be added in order to keep a EV level high enough.

Key Concepts

Margin

Margin is a term used in both business and finance to refer to the difference between the price of a good or service and the amount of money required to produce it. It is the amount of money that remains in your pocket once you have delivered a service.

Margin is usually expressed in percentage. Ex: if you sell a product or service for $1,000 with a 40% margin, you earn $400.

In Conduite, margins apply to many things:

Margin Types

Margin Type Description
Margin at Signature ($/%) The margin computed at the time a contract is signed (provided by the associated Budget Builder). For a project this is a static value.
Margin Objective ($/%)

The margin objective that is set for a project. At the beginning of a project that value equals the Margin at Signature. But it can evolve overtime (up or down).

In Conduite, setting a margin objective is the primary way to steer the performance of a project.

Expected Margin ($/%) The margin that we expect to make on a project at any given time based on what was spent and what we think we need to spend to finish the work.

Key Concepts

Daily Rates

The Daily Rate is the cost of a staff member for one day of work. Each person in your company has a different daily rate. For the sake of simplicity Conduite assigns a daily rate for each role of your company (developer, project manager, designer, domain expert, ...). Daily rates are needed for all the roles that you want to include in your budgets.

The Daily Rate can be expressed in two ways:

In other words, the difference between the loaded and unloaded rates is your margin. The amount of margin you add to the Unloaded Rates is specific to your organization and to the contracting mechanisms between your clients (ex: government contracts often have specific rules for rates calculation).

The daily rates are combined in a summary table a Rates Card that specifies:

Key Concepts

Labor

In a budget, labor refers to the cost of all the employees needed to execute a contract. In Conduite that cost is computed based on the Daily Rates and the number of days needed.

Key Concepts

Expenses / Direct Costs

In a budget or contract, the expenses (or direct costs) refer to all the non labor costs that are needed to execute the contract. For example:

These items are usually charged at cost to the client. Therefore you cannot specify a margin for direct costs.

Key Concepts

Budgets

A budget refers to a financial plan that outlines the expected labor costs and expenses associated with the project or service being provided under a contract. The budget is usually an integral part of the contract and serves as a basis for determining the financial obligations of each party involved.

Conduite works with budgets that have the following (simple) structure:

The Budget Builder computes the margin for labor (value and %) automatically. The margin on labor is the margin of your contract.

Key Concepts

Capacity

Capacity refers to the amount of work your team can execute at any given time. It is measured in days. Capacity is planned for each team member individually.

Availability

The total amount of days a team member can work in a given month. Someone working full time will have a capacity of ~20 days per month, considering that s/he will not take vacation days and that there are no holidays in that month.

Allocations

The fact of allocating a certain number of working days to a staff member to work on something.

Remaining

The number days that a staff member can still work based on his/her availability and allocations.


Key Concepts

Resourcing Request

Sending a Resourcing Request is a way of booking a set of human resources for future work. It is a compilation of allocations for a period of time: someone working on something for a certain number of days over a period of time.

In Conduite, Resourcing Requests are sent in 2 instances:

Key Concepts

Contract

In Conduite, a contract represents opportunities that has been won and signed. It is defined by:

Attribute Description

Timelines

 The start and end date planned at the time of signature

Scope of Work

A description of the purpose of the contract and of the main activities.

Labor - Amount

The monetary amount representing the labor involved in the execution of the contract.

Labor - Margin at signature

The margin that we expect to make on labor based on the planning assumptions at the time of signature. This is the reference value for the execution of the contract.

Expenses / direct costs - Amount

The monetary amount representing the expenses / direct costs involved in the execution of the contract.

All of these attributes are computed in the Budget Builder.

Key Concepts

Project

A project is a temporary organizational artifact that corresponds to the execution of the scope of work defined in a contract by a group of people. Project are always associated to a contract and by extension to a Budget Builder.

Projects are defined similarly to contracts (labor and expenses), but account for all types of margins:

In a nutshell, the performance of a project is the difference between the margin objective and the expected margin.

Key Performance Indicators

These KPIs are used throughout Conduite applications. The ones tagged with a ⭐ are considered to be the main KPIs: the ones that are actionable on their own. The other KPIs are intermediate KPIs that are used to compute the main ones. They still provide useful information to understand the the financial situation in more depth.

Key Performance Indicators

Pipeline - Expected Value ⭐

Expected Value

The Expected Value (EV) of an opportunity is the value of the opportunity weighted by the probability of winning the opportunity. It is the key metric allowing you to measure the health of you Business Pipeline. 

The EV of an opportunity is expected to evolve over time. If won the EV of an opportunity will be equal to the Total Value of the opportunity (probability equal to 100%).

Where

Component of EV

The EV of an opportunity is composed:

EV Monthly Average

The spread of the EV over the duration (in months) of the contract.

Key Performance Indicators

Capacity - Utilization ⭐

The Utilization is the percentage of time worked (or allocated) over the availability. It tells you how busy your team is overall, regardless of the time of work it is doing. 

You want to bring Utilization as close to 100% possible.

Interpretation

Key Performance Indicators

Capacity - Billability ⭐

The Billability is proportion of available time your team spends on billable work. It is a key metric influencing the overall profitability of your organization.

Billable work is defined as an allocation with the Contract Type tag set to Client or Opportunity in the Capacity Planner.

You want to bring Billability as close to 100% possible, although it is expected for your team to spend some amount of time on non-billable tasks (admin, internal projects, etc...).

Interpretation

Key Performance Indicators

Expenses - Invoicing Rate

The Invoicing Rate (IR) corresponds to how much of the expenses a team has invoiced to date in relation to what is expected to be invoiced during the entire duration of the project. By keeping track of this metric teams avoid over or under spending on expenses.

Key Performance Indicators

Labor - Execution Budget

The Execution Budget (EB) is the amount of money for Labor that the project team has to execute the project. It is equal to the total Labor (LB) amount of the contract to which we subtract the Margin Objective (MO) of the labor component.

Because the Margin Objective might change during the course of execution, the Execution Budget can also change. In any case, the project team's objective should always be to spend less or equal than that amount.

Key Performance Indicators

Labor - Expected Execution Budget

The Expected Execution Budget (EB_E) is the amount of labor that the project team plans to spend to execute a project. It is based on what has been spent to date and the amount it has forecasted to execute the remaining scope.

At the beginning of a project the Expected Execution Budget is equal to the Execution Budget. But as the project is executed the Expected Execution Budget can, at any given time, be lower or higher than the Execution Budget:

Key Performance Indicators

Labor - Execution Rate ⭐

The Execution Rate (%EX) is a financial indicator that tells you how much (%) budget you've spent to date related to the amount you think you need to execute the project, i.e. Expected Execution Budget.

It is not (exactly) an indicator of progress  of execution of project activities, i.e. it does not tell us if the project is close to completion. Ex: the last activity of the project is a one week training. This activity represents 30% of the budget but only one week of work.

Key Performance Indicators

Labor - Execution Efficiency ⭐

The Execution Efficiency (EE) is a KPI that tells you whether your team is on track to be in budget or not. In other words, whether the team will meet its Margin Objective on labor. 

It compares how much labor you would have spent of the Execution Budget (EB) based on your current Execution Rate (%EX) to what you a have spent to date.

Project teams should manage their project to achieve and Execution Efficiency 100% or above.

Because it is a percentage, you can instantly assess the financial health of a project, regardless of the Margin Objective.

It is the main KPI that allows you to trigger adjustments of strategy and/or objectives (client approach, margin, scope, ...).

Interpretation

Examples

Let's consider a project that has a Labor budget (LB) of $1,000 and a Margin Objective (MO) of 40%. The resulting Execution Budget (EB) is:

Let's consider the following scenarios:


Scenario 1 Scenario 2 Scenario 3
spent $200 $150 $400
remaining $300 $550 $190
Execution Rate (%EX)
Execution Efficiency (EE)

Let's analyze these numbers and discuss possible actions:


EE Status Possible Actions
Scenario 1 120% 🎉
  • Increase the Margin Objective
    The team wants to bank the extra margin

  • Invest the additional margin
    The team decides to do more for the client
Scenario 2 86% 🚨
  • Decrease the Margin Objective
    The team considers it will not be able to make for the lost margin

  • Decrease the scope
    Convince the client to do less work in order to decrease the remaining costs

  • Ask for extra budget
    In order to completely or partially make for the lost margin

  • New working approach
    In order to increase the efficiency of the team and make up all or part of the lost margin
Scenario 3 102% 👌
  • Nothing
    The team is executing as planned

Key Performance Indicators

Labor - Expected Margin ($/%)

The Expected Margin (%EM) is the computed from the Expected Execution Budget (EB_E) and labor (LB) amount of a contract.

It can differ from the Margin Objective (%MO) depending on how the project is going.

Interpretation

Key Performance Indicators

Labor - Spent

The amount spent on labor to date. This data comes from your time tracking system where your team logs hours against projects.

Key Performance Indicators

Labor - Remaining

This is the amount of labor that your team estimates it needs, at a certain date, to execute the remaining scope of the project. The ability to accurately estimate the remaining labor is a fundamental determinant of the accuracy of your entire project financial tracking system, i.e Conduite 😅.

Key Roles

Key Roles

Sales Team

The Sales Team is a group of people in charge identifying potential clients (prospects) and to sell them the services that your company offers.

Key Roles

Capacity Manager

The Capacity Manager (or Resourcing Manager) is the person who's job is to make sure that there is a consolidated view of who's working on what and when (present and future). As the main resource of your company is people's time, this is an essential function. It will allow you to know whether you have too much work coming up and need to hire, or if you need to make adjustments to manage a slowdown in activity.

Key Roles

Delivery Manager

The Delivery Manager is a person in charge of overseeing execution (delivery) of projects. This is a senior role with strong Project Management skills and experience. S/He feeds off the regular project updates to trigger corrective actions in support to Project Managers. S/He is often accountable for the improving the way projects are executed. This role is often combined with the one of Capacity Manager.

Key Roles

Project Manager

The Project Manager is the person accountable for the proper execution of the project. S/He has to ensure that the client is happy with the work that is being delivered, that the financials of the project are under control and that her/his own team is happy. It's a role that requires  a versatile mix of skills (technical, organizational, relational). Project Managers are key to the success of projects.

Project Report Out (PRO)

The Project Report Out is a project update that Project Managers send on a regular basis. In Conduite, they are expected to send it twice a month on every 2nd and 4th Thursday.

The PRO is sent from the Project Dashboard of a project and contains the main project KPIs as well as narrative components that detail was was done in the previous and upcoming project periods.

Field Description
Project ID

This is a unique identifier for the project. This is the ID of the Google Spreadsheet file.

💡This field is preloaded.

Project Name

The name of the project

💡This field is preloaded.

Project Status

A traffic light indicator that reflects the current overall status of the project.

Tip: Make sure to set a clear definition for each color in order to have consistence across PROs and projects.

Labor - Execution Rate

The current Execution Rate of the project.

💡This field is preloaded.

Labor - Execution Efficiency

The current Execution Efficiency of the project.

💡This field is preloaded.

Expenses - Margin Accrued

The current Accrued Margin on expenses of the project.

💡This field is preloaded.

What happened in the last 2 weeks?

A summary of what has been done in the last 2 weeks or since the last PRO was submitted.

Tip: Make sure to include any context that helps understand the values of the project KPIs.

What is planned for the next 2 weeks?

A summary that details what the project team expects to do in the next 2 weeks.

Tip: Make sure to include any strategy adjustment details.