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AJ-04:Bring Clarity to Your KPIs with Ajera

Megan Miller and Morrigan Smith, Deltek

About MeganRecovering Marketing Coordinator

» 11 years in AEC industry

At Deltek

» Product Marketing Manager for A&E solutions

» Lead Deltek A&E Clarity Survey & Report

2

Morrigan Smith, Functional Delivery LeadFormer CFO

» 15 years in AEC industry

At Deltek

» Ajera Delivery Lead – developing Deltek’s staff to better serve our clients

» Principal Consultant - implemented 200+ successful Ajera implementations

» Ajera Workshops – development and training to improve financial and project reporting management

3CONFIDENTIAL © Deltek, Inc. All Rights Reserved.

About the Study» 40th year

» 700+ U.S. and Canadian A&E firms

participated

» Includes financial management,

business development, project

management, human capital

management, and technology trends

» Based on 2018 fiscal data

» In collaboration with SMPS, ACEC,

ACEC Canada and AIA

Firm Size and Type

CONFIDENTIAL © Deltek, Inc. All Rights Reserved. 5

42%Small

(0-50)

41%Medium

(51-250)

17%Large

(250+)

32%Architecture or A/E

57%Engineering or E/A

11%Other

High Performers


31%High Performers

» 15%+ Operating Profit

» 3.0+ Net Labor Multiplier

69%Others

Business Development


Business Development


48% 44% 5.1%

Win Rate Revenue from

Top Three Clients

Net Revenue

Growth Forecast

Firms are finding it difficult to respond to new opportunities fast enough and need to

be strategic about which potential projects to pursue.

Net Revenue Growth Forecast: Seven-Year Trend


3.2%

5.6%6.2%

5.0%5.3% 5.2% 5.1%

0%

2%

4%

6%

8%

2013 2014 2015 2016 2017 2018 2019

Win Rate


50.0% 49.7% 50.0%

42.8%45.1%

40.9%

50.0%

0%

10%

20%

30%

40%

50%

60%

HighPerformers

Others Small Medium Large A or A/E E or E/A

47.9% -2.1

Calculated by proposals

awarded divided by

proposals submitted.

Revenue from Top Three Clients


36%

41%

52%

39%

34%

46%

41%

0%

10%

20%

30%

40%

50%

60%

70%

HighPerformer


Client 3

Client 2

Client 1

44% -9

Client 1: 24%

Client 2: 12%

Client 3: 8%

Project Management


Project Management

71% 20% 46%

Projects On or

Under Budget

Firms with PMOs Measuring Client

Satisfaction


Firms need to continue to focus on developing their project management maturity,

project leaders, and leveraging feedback from clients.

Projects On or Under Budget


75%

67%70% 71% 72%

66%

72%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

HighPerformers


71% -9%

Top Quarter: 90%

Bottom Quarter: 60%

Projects On or Ahead of Schedule


67%62%

64% 63%65%

62% 64%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

HighPerformers


64% -11%

Top Quarter: 90%

Bottom Quarter: 40%

Financial Management


Financial Management

14.4% 59.8% 3.01

Operating Profit

on Net Revenue

Utilization Rate Net Labor

Multiplier


Firms’ financial statement metrics increased across the board, with most impacts

appearing to be driven by talent management and staffing challenges.

Operating Profit on Net Revenue


22.9%

8.5%

12.4%

16.2%

12.1%

13.9%14.5%

0%

5%

10%

15%

20%

25%

HighPerformers


14.4% +1.2%

Top Quarter: 22.0%

Bottom Quarter: 5.9%

Calculated by dividing

pre-tax, pre-distribution

profit by net revenue

(total revenue minus

consultants and other

direct expenses).

Net Labor Multiplier


3.48

2.802.95

3.082.85

3.04 2.95

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

HighPerformers


3.01 +0.05

Top Quarter: 3.39

Bottom Quarter: 2.61


net revenue by direct

labor, the cost of labor

charged to projects.

Utilization Rate


59.4%

60.0%

60.6%

59.1%59.3%

58.6%

60.3%

56%

57%

58%

59%

60%

61%

HighPerformers


59.8% +0.4%

Top Quarter: 66.8%

Bottom Quarter: 55.1%


the cost of labor

charged to projects by

the total labor cost of

the firm.

Average Collection Period


75 75

73

77

74

77

75

60

62

64

66

68

70

72

74

76

78

HighPerformers


75 days +4

Top Quarter: 95

Bottom Quarter: 55


accounts receivable by

annual total revenue,

times 365.

Human Capital Management


Human Capital Management

13.8% 4.2% 45%

Employee

Turnover

Staff Growth Have Succession

Plans


Firms are struggling to find qualified candidates and offer competitive compensation

packages in a tight labor market. Better career development and employee

engagement is being offered to improve employee retention.

Staff Growth/Decline


6.9%

3.0%

0.0%

5.6% 5.6%

1.4%

5.4%

0%

2%

4%

6%

8%

10%

HighPerformers


4.2% 0.0%

Calculated by

subtracting end of year

headcount from start of

year headcount, then

dividing the result by

start of year headcount.

Employee Turnover


14.3% 14.5%

13.2%13.9% 14.1% 14.4%

12.9%

0%

5%

10%

15%

20%

HighPerformers


13.8% +1.0%


the number of

employees leaving

during the year by the

average number of

employees during the

year.

Learn More with theDeltek Clarity Deep Dive Webinar Series

Technology

Trends

Financial

Management

Business

Development

Project

Management

Human Capital

Management


Deltek.com/clarity-AE

» Widgets are a great way to

have Ajera track your KPI

information throughout the

year.

» You can have additional

columns tracking prior years

and current industry

standards as well.


Deltek Clarity Study & Ajera*Dashboard included in Insight Attendee Portal for download

» Ajera’s default Utilization widget uses hours to calculate utilization, whereas the Deltek Clarity study bases this on salary / financial reporting.

Deltek Clarity vs. Ajera default Utilization Widget*Dashboard included in Insight Attendee Portal for download


» Using the KPI Dashboard you

can pull your Overhead

Percentage to update Company

> Preferences for additional

project profitability reporting.




» Once you have calculated your firm’s Overhead Rate you can update this information in Ajeraunder +Company > Preferences > Payroll tab.

» Select ‘Use fixed percentages only’

» Update the Overhead percentage and leave the DPE (Direct Personnel Expense) blank

» In order to capture prior transactions with the rate for reporting, ‘Distribute DPE/Overhead from the +Company menu

Setting up your Overhead Rate in Ajera

Applying Overhead % to calculate Burdened Cost


The overhead percent is calculated as the company's total operating cost minus

direct project labor and direct project expenses divided by the direct labor cost.

Calculating Overhead as a Fixed %

If the total cost for the company is $150,000, the direct labor is $50,000, the

direct expenses are $10,000 then the overhead cost is:

• $150,000 - ($50,000 + $10,000) = $90,000

• The overhead percent is: $90,000 / $50,000 = 180.00%

Example

Applying Overhead % to calculate Burdened Cost


• Overhead: 180%

• Labor Cost: $300.00

• Overhead amount = $300 x 180% = $540

• Burdened Cost = $300 + $540 = $840.00

Example


Project Reporting» Use the Customize button in Ajera to

update your Project reporting to ‘Include overhead in cost’ when calculating Project Profitability.

» Other items to be aware of in these reports:

» Profit basis: recommend Billed + WIP or Billed depending on if you are running the report before or after your billing cycle respectively.

» If running Billed + WIP or Billed do not ‘Cap profit at contract amount’.

» The option to ‘Include marketing phases’

» The options to ‘Include expenses’ and ‘Include consultants’

» Discuss options for connecting with experts

across all Deltek software

» One provider of all things Deltek

» Certified team of consultants

» Deeper level of project governance

» Get information on how to get more out of your

Deltek investment

Deltek Global Consulting Booth at Xpo


Appendix –Import Dashboard in Ajera » Ajera Menu > Setup -> Utility -> Dashboard Import/Export

» When prompted, select to Import a “Single Tab

» Browse to the location where you have saved the dashboard file and

select

» Click Import button

» None of the KPI Dashboards included in this course have security

assigned to them. This can be updated once you have tweaked the

settings on the widget.

CONFIDENTIAL © Deltek, Inc. All Rights Reserved.

Appendix –Modify KPI Dashboards in Ajera


» Enter Design Mode to Modify KPI Dashboard in Ajera

» In the Ajera menu, click on the hammer and wrench icon to enter into design mode of dashboards:

» When in Design Mode, locate the KPI Dashboard, and click on it. The KPI dashboard should be highlighted in green.

» Each of the widgets on the dashboard reports on one of the KPIs. The KPIs are calculated based on information from the Chart of Accounts. Modifying the Chart of accounts used in the calculation is required to ensure that it matches your particular Chart of Accounts. Repeat the steps below to modify each KPI widget:

» In Design Mode, click on the chevron icon on the top right hand corner of a widget and select “Edit”

» The Widget Designer screen will open up. The top of the Widget Designer screen has options to edit general information of the widget and a preview of the widget. The bottom left, includes a listing of the different information (columns) used to calculate the KPIs. This is the information we will need to edit in the widget screen.



» The columns are either

information pulled directly from

the Chart of Accounts or

Formulas using the Chart of

Account information to calculate

the KPI.

» Formula columns are identified

by the f(x) icon



» Click on one of the columns that is not designated as a formula column. For example, Income, Cost of Services, Operating Expenses, Bonuses and Distribution, etc. These are the columns that need to be modified to ensure that the proper accounts are used from your Chart of Accounts. NOTE: We do not need to modify any of the formula columns.

» After selecting the column to modify, select the correct account to use in the “GL Balance” section of the “Properties” tab. There are options to select your chart of accounts by Account Type, Account Group, or by specific accounts. Depending on how your Chart of Accounts are structured, you may use any of the three options.



» The + and – icons mean that it will add or subtract the total of all accounts listed. For our purposes, we will only use the + option.

» To the right is an example of Direct Salaries to highlight how to select the individual accounts for calculation.



» To the right is an example of Income using the Account Type to pull in all income. This is used in calculating Net Revenue and Operating Profit formulas.

» When using an Account Type or Account Group review the Chart of Accounts to ensure all proper income accounts are in this account type.

» Also note that when working Income accounts they have a natural credit balance, therefore you need to make sure the ‘Reverse sign’ checkbox is selected.



» After reviewing and modifying all non-formula columns to ensure that the correct accounts are utilized, the formulas should calculate accordingly and does not need any adjustments. EXCEPT for the INDUSTRY average column.

» The ‘Industry’ column is a static number inputted based on the Deltek Clarity report. To update the ‘Industry’ average on an annual basis

» Click on the ‘Industry’ column and

hit ‘Edit’ on the ‘Properties’ tab.

The formula Builder window will

open up. Modify the static

number to update to the current

year’s Industry Average.

» Click Save and Report for each

KPI Widget.



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