Setting project profitability threshold can be a very handy way to ensure you stay as close to your profitability goal as you can at every point of your project's lifecycle.

However, you can change the profitability threshold setting as your project progresses.

Below is an example where this tactic may be used.

1. Start your project with a certain profitability goal in mind

Let's say you want all your project to ideally be at 50% profitability.

To do that - you can Set the default profitability threshold in Settings to be Absolute profitability at 50% . This means that every new project you start will have this settings:
https://cdn.elev.io/file/uploads/Xz4cmdIQ431-kE2TUD3d2Ib9E0Gr5NoMfPzwQnr374E/k3J4-6mtK1EgPPbjRtKlzHBFNxeOkA4aV6k1jNpHLto/profitability_1-YvY.png

This means that even at the point of first draft estimate we will compare you project's profitability to that 50% goal and show if you fall short of the goal:

https://cdn.elev.io/file/uploads/Xz4cmdIQ431-kE2TUD3d2Ib9E0Gr5NoMfPzwQnr374E/R6lVF9i_oF2-COzsqZRyZKCnlzlY6R029BwLmakYLO8/profitability_2-LP8.png

2. Adjust your profitability once project starts

Let's assume that even though you are ca. 3.5% behind your desired goal on this project - you get this project approved as is. So you start the project as you baseline version would have a profitability of 46.68%.

Quite often professional services organisation often have an acceptable variance on certain metrics that give the Delivery manager and Project manages some flexibility. It is often a % variance from your approved budget plan (in our case - your baseline version).

In this case - it won't be reasonable to still compare your project's profitability as it progresses to the 50% goal if your approved version is already 46%.

This is where you can easily change the Profitability threshold to Baseline variance and define the allowed variance:
https://cdn.elev.io/file/uploads/Xz4cmdIQ431-kE2TUD3d2Ib9E0Gr5NoMfPzwQnr374E/XbG5FpCkUMLZk1It_oeRMN_gA3BmJb673ob_3Hg_q0E/profitability_3-kCI.png

3. Monitor project performance

As your project progresses, Price&Cost will keep you informed of how you are doing against your set threshold:

  • In your dashboard
    https://cdn.elev.io/file/uploads/Xz4cmdIQ431-kE2TUD3d2Ib9E0Gr5NoMfPzwQnr374E/JebUpyrcSXjYmUUcGNtQJJqVzCXjM2f63VMQ2fEaDng/profitability_5-hx4.png
  • In your detailed project view
    https://cdn.elev.io/file/uploads/Xz4cmdIQ431-kE2TUD3d2Ib9E0Gr5NoMfPzwQnr374E/XLeEEP8hh76s23Xn59vdsBjgy8bDq9XiO_X_GzcbnwM/profitability_4-lgo.png

If in further version you go over the threshold, Price&Cost will highlight it for you and mark the project as underperforming:

  • In your dashboard
    https://cdn.elev.io/file/uploads/Xz4cmdIQ431-kE2TUD3d2Ib9E0Gr5NoMfPzwQnr374E/RZbPHYMe8K77oXiMDBj-Jx7QoMZ5pr8s9o6Bt0PGvRY/profitability_7-w5A.png
  • In your detailed project view
    https://cdn.elev.io/file/uploads/Xz4cmdIQ431-kE2TUD3d2Ib9E0Gr5NoMfPzwQnr374E/X_6zuIdC7RDeZL21EszaiVCWbw6l5lyqeM3oYhFbbRE/profitability_6-GMQ.png