Rate Matrix in Cora PPM

Rate Matrix in Cora PPM

A Rate Matrix in a PPM system like Cora PPM is a dynamic tool designed to facilitate comprehensive financial planning, tracking, and control for multiple projects. It's a structured grid that houses various rates associated with different resources, skills, materials, and facilities involved in project execution. The matrix assists organizations in precisely calculating, forecasting, and analyzing costs, revenues, and ultimately, the profitability of projects. 

Core Features of Rate Matrix

1. Variable Rates Assignment
   • The matrix accommodates different rates for skills, materials, and facilities involved in projects.
   • It supports various versions, allowing organizations to adapt to changing cost structures over time.
2. Project-Specific Rate Metrics
   • Organizations can establish and manipulate rates at both global and project-specific levels.
   • Project managers have the autonomy to adjust rates at a project level, supporting precise financial planning and control.
3. Flexible & Dynamic
   • Supports dynamic changes and adjustments, providing flexibility in handling different projects with varying customer and contractual requirements.
4. Customizable Structure
   • Highly customizable to align with unique organizational structures, legal entities, and contractual terms.

Using Rate Matrix to Enhance Profitability

1. Strategic Financial Planning
   • It assists in developing accurate financial plans and budgets by providing reliable rate information for each resource, skill, and material involved.
2. Cost Tracking & Control
   • Organizations can closely monitor and control project costs, ensuring that they align with predefined budgets and contractual agreements.
3. Revenue Forecasting
   • By providing insights into the cost and revenue generation of each project component, it supports accurate revenue forecasting and profitability analysis.
4. Profitability Analysis
   • It plays a crucial role in analyzing the profitability of each project by offering detailed insights into both costs and revenues.
5. Efficient Resource Allocation
   • Organizations can optimally allocate resources by understanding the cost implications, thereby maximizing profitability.
6. Enhanced Decision-Making
   • It supports informed decision-making by providing a clear picture of the financial performance of each project, resource, and skill involved.
7. Contractual Compliance
   • Ensures that project execution aligns with the different contractual terms agreed upon with customers, safeguarding against financial discrepancies and disputes.

How Organizations Leverage Cora PPM’s Rate Matrix

• Multi-Project Management
  • Organizations handling multiple projects for various customers can use the Rate Matrix to efficiently manage each project's unique financial aspects.
• Contractual Alignment
  • With the ability to set and adjust rates at project levels, organizations can ensure that each project’s financial management aligns with its respective contract.
• Customer-Centric Approach
  • It supports a customer-centric approach by allowing the customization of rates and costs per project, reflecting the terms agreed upon with each customer.
• Profit Maximization
  • By providing detailed financial insights, the Rate Matrix supports organizations in identifying and maximizing profitability across all projects.

Summary

The Rate Matrix in Cora PPM is an invaluable tool for organizations dealing with multiple projects that have different customers and contract terms. Its dynamic, flexible, and customizable nature allows for precise financial planning and control, enabling organizations not only to comply with various contracts but also to enhance the profitability of their business in delivering projects for customers.

Example

Honeywell have 5,000,000 separate costs in their Rate Matrix, enabling them to grow revenues by >$250m with Cora through better and more accurate automated billing management with their clients. 

Functionality of the Rate Matrix in Cora PPM

The RATE MATRIX in Cora PPM is a customizable configuration tool designed to cater to specific client needs, providing a structured and detailed view of different costs associated with various elements in a project.

Key Features

1. Customizable Configuration
   • Can be tailored per client's needs, allowing flexibility in building and customizing the matrix as required.
   • The configuration can include skills, facilities, legal entities, divisions, and regions, among other elements.
2. Predefined Fields
   • The matrix offers a set of predefined fields which can be customized further.
   • Users can create and implement dropdown menus to facilitate the selection of various elements like country, department, and division.
3. Versions
   • Users can add different versions to the matrix; typically, each version might represent a different year.
   • Each version provides a detailed breakdown of costs associated with skills, materials, and facilities.
4. Detailed Costs
   • For each skill, material, or facility, users can input associated costs and valid date ranges.
   • Costs are further detailed, including planned costs and charge-out costs.
   • The charge-out cost is mandatory, providing a critical insight into what a particular skill or facility costs and what it is charged at.
5. Attributes Selection
   • The matrix allows for the selection and input of various attributes, including skill types and legal entities, among others.
6. Task Level Integration
   • The RATE MATRIX integrates at both project and task levels, allowing for specific cost attribution to individual tasks based on their unique attributes.

Example Usage

• For instance, different costs can be associated with specific skills and legal entities, which can be defined and adjusted within the matrix.
• If a task within a project utilizes a particular skill within a specific legal entity, the matrix can be referenced to determine the exact cost associated with that skill within that legal entity.

Conclusion

The RATE MATRIX in Cora PPM provides a detailed and customizable framework for managing and understanding the various costs associated with different project elements, offering valuable insights and control over the financial aspects of project management.

Skills Materials and Facilities

Understanding 'Facility' in the Cora Rate Matrix

• Definition: In Cora PPM, “Facility” doesn’t exclusively refer to buildings or physical infrastructure. It encompasses hireable equipment crucial for various project stages, including scissor lifts, diggers, dump trucks, excavators, etc.
• Usage Insight: These are often high-cost pieces of equipment, essential for project execution, typically hired or leased for temporary usage during specific project phases.
• Flexible Cost Configuration: The cost structure related to each “Facility” or hireable equipment is customizable, allowing tailored setup per client's distinct needs and requirements, reflecting the hard costs associated with each item.
• Material Costing Nuance: Material costs are managed differently. In Cora PPM, materials are assigned a cost multiplier to provide true cost values. For specific clients, materials are integrated differently through procurement processes, subsequently reflected in the project planning and gantt chart structure.
• Client-Specific Customization: The system offers the flexibility of creating and adjusting cost structures, facilities, and materials in a way that aligns with the client's unique project management and financial workflow, ensuring accurate and efficient project cost tracking and forecasting.

Understanding Skill Rate Variations in the Cora Rate Matrix

• Dynamic Skill Rate Configuration: In Cora PPM, skill rates can be adjusted dynamically, allowing different rates for the same skill depending on various factors, like the legal entity, division, or region from which a resource originates.
• Skill Rate Example: In the scenario described, the same skill, “Lead Buyer,” planned for 10 hours, could have different costs based on the set rate. For instance, if a higher rate is set for the skill, the cost reflected in the Rate Matrix will be increased accordingly.
• Overtime Consideration: The system doesn't inherently account for overtime rates within the Rate Matrix. If a “Lead Buyer” works extra hours in a day (like 10 hours instead of the regular 8), overtime calculation and time sheeting might be done outside of Cora, as some clients don’t track granular details within the system.
• Customizable Time Frame: Users can set specific time frames for skill rates within the Rate Matrix, aligning with the project timeline. The Matrix provides warnings if a task extends beyond the set time frame for a particular skill rate, ensuring users are aware of potential discrepancies in rate application.
• Distribution Control: Users can choose different distribution types for skill application. In the “linear distribution” example provided, a task extending from September to January will have the skill hours distributed evenly, impacting the skill cost calculation. Custom distribution allows users to front-load or adjust skill hour distribution based on project needs, which is reflected in the skill cost.
• Versioning Limitations: Users can only apply one version of the Rate Matrix to a task at any given time, which means tasks won't dynamically shift between different rate versions during their lifecycle. Understanding this limitation is crucial for accurate planning and cost forecasting.

Facility Selection Impact on Account Codes in Cora PPM

• Account Code Selection: Facility choices impact the account codes booked against, with different facilities being associated with distinct account codes and subgroups.
• Account Code Allocation: Account codes are initially defaulted at a skill level, with each skill having an assigned account code and subgroup. The subgroup selected influences the account codes available for users to choose, offering a streamlined and organized approach to account management.
• Facility Planning: Users can plan for facilities in their projects, with each facility having an associated cost per hour. The planning module allows for cost defaults based on selected facilities. An example given is a facility planned for one day at a cost of 1000 per hour, resulting in an 8-hour day costing 8000.
• Facility Variation: The platform accommodates variations in facility requirements across different projects. While there is a core list of facilities available for all projects, users can also plan for one-off facilities specific to individual projects by utilizing the materials module. This approach ensures the core facility list remains unaffected by unique project demands.
• Materials & Facilities Management: Materials in Cora PPM function similarly to facilities. Users input a cost for materials, and the system multiplies this cost by a predetermined factor (often one) to calculate the total cost. The system also supports procurement materials, with different procurement screens available for user convenience.
• Cost & Charge Editing: Users have the flexibility to edit both costs and charge rates for any entry in the system, be it material, skill, or facility. This functionality provides flexibility in financial planning and billing.
• Rate Adjustments: Users can adjust rates within set minimum and maximum limits. The adjustments are value-based (not percentage-based), providing straightforward modification options to users. For instance, a $10 adjustment on a rate of $150 per hour results in a new rate of $160 per hour.

Business Outcome Value of Rate Adjustments Feature in Cora PPM's Rate Matrix

1. Enhanced Financial Flexibility

• Outcome: This feature provides organizations with the flexibility to adjust rates dynamically as per their strategic financial planning or in response to market changes.
• Value: With enhanced financial flexibility, companies can better navigate economic fluctuations and contractual variations, maintaining healthy margins and profitability.

2. Precision in Cost Management

• Outcome: The value-based adjustments allow for precise modifications to rates, ensuring accuracy in cost planning, tracking, and control.
• Value: Precision in cost management results in reliable financial forecasting and budgeting, reducing the risks of financial misalignments and facilitating smoother project executions.

3. Streamlined Financial Communication

• Outcome: With straightforward value-based adjustments, financial communication with stakeholders, clients, and team members becomes clearer and more transparent.
• Value: Clear financial communication fosters trust among stakeholders and facilitates smoother negotiations, approvals, and consensus-building processes related to project finances.

4. Quick Response to Market Changes

• Outcome: Users can swiftly adjust rates in reaction to market changes, such as inflation, exchange rate fluctuations, or shifts in labor costs.
• Value: The ability to respond promptly to market dynamics safeguards the organization against unforeseen financial challenges, ensuring project viability and sustainability.

5. Simplified Financial Oversight

• Outcome: Value-based adjustments simplify the process of financial oversight, as finance teams can easily understand and validate the changes made.
• Value: Simplified financial oversight saves time and reduces the complexity of financial auditing, reporting, and compliance, allowing teams to focus on strategic financial planning and analysis.

6. Customized Client Billing

• Outcome: Adjustments can be made to tailor client billing rates in line with specific contractual agreements or negotiations.
• Value: Customized client billing enhances client satisfaction and trust, fostering long-term business relationships and ensuring compliance with contractual financial terms.

7. Enhanced Decision-Making

• Outcome: The feature supports informed decision-making by providing clear, value-based financial data and flexibility in rate adjustments.
• Value: Enhanced decision-making ensures that financial strategies and actions align with organizational objectives, market realities, and project requirements, driving business success and financial stability.

8. Accretive Revenue Optimization

• Outcome: The Rate Matrix supports the strategic pricing of services, materials, and equipment, thereby optimizing accretive revenue generation.
• Value: By facilitating precise, dynamic pricing strategies, the organization can maximize revenue from each project, enhancing overall financial performance and growth. Example: Honeywell increased Accretive Revenue by 8% after deploying Cora PPM.

9. Efficient Material Costing

• Outcome: Organizations can effectively price and bill for materials used in projects, accounting for real-time costs, markups, and value adjustments.
• Value: This ensures that all material costs are accurately covered and profitably billed to clients, protecting the organization from revenue leakage due to underpricing.

10. Equipment Usage Charging

• Outcome: The Rate Matrix allows firms to allocate and charge for equipment usage on projects accurately and transparently.
• Value: This leads to the recovery of equipment-related expenses and ensures profitable billing practices, further contributing to the organization’s revenue streams.

11. Real-time Pricing Adjustments

• Outcome: Immediate adjustments to rates, materials, and equipment charges can be implemented as market conditions, project requirements, or contractual terms change.
• Value: The capability to adjust pricing in real-time enhances revenue accuracy and responsiveness to dynamic project environments and client expectations.

12. Streamlined Billing Processes

• Outcome: The feature simplifies and automates the billing process for services, materials, and equipment, reducing administrative burden and errors.
• Value: Efficient billing processes expedite revenue collection, improve cash flow management, and enhance the customer’s billing experience.

13. Transparent Client Invoicing

• Outcome: With clear, adjustable rates for services, materials, and equipment, client invoicing becomes transparent and straightforward, reducing disputes and facilitating prompt payments.
• Value: Transparent invoicing practices build client trust, improve client relations, and secure timely revenue inflows for the organization.

14. Strategic Financial Planning

• Outcome: The Rate Matrix provides valuable data and flexibility for strategic financial planning, helping organizations to price their offerings competitively while ensuring profitability.
• Value: Strategic planning supported by real-time, adjustable rate data empowers the company to achieve its financial objectives and enhance its market positioning.

Future Enhancements and New Features in Cora PPM for the Rate Matrix

• Simplified Version: An enhanced Version 2 has been introduced for simpler and exaggerated cost allocation for ease of understanding. It includes inflated figures for costs associated with lead, materials, and facility to help users grasp the implications more effortlessly.
• Version Switch: Users now have the flexibility to switch versions at an individual task level, promoting ease in changing inheritances and applying different rates for distinct tasks. Further enhancements are planned in this area.
• Project-Specific Rate Metrics: Cora PPM has integrated a feature called project-specific rate metrics, which is essential for users who need to control rates at the project level. This new feature allows project managers to adjust the rates, enhancing their control over the project without requiring administrative privileges.
• Enhanced Control: Project managers now have enhanced control as they can adjust rates at a project-specific level. This new adjustment capability allows for more precise financial planning and control over the project’s budget without administrative intervention.
• Import/Export Enhancements: Users have expressed the need for an improved import facility, which is under consideration. While data export is available, data import needs to be via the Import Builder currently.
• Filter Functionality: Users have suggested adding filter functionality to help navigate through extensive lists of project IDs and other attributes. The introduction of filters is planned and well facilitate easier navigation and data retrieval, especially when dealing with large datasets.
• Documentation: There’s acknowledgment of the need for more robust documentation to support users. Documentation enhancements are planned to ensure users have access to the necessary resources to navigate and utilize the platform effectively. Further enhancements are planned in this area including adding guides to Cora Assistant.
• Future Developments: There are plans for more advanced features and improvements, including enhancements to the baseline change control scheduled for completion in the coming months. This development is part of an ongoing effort to meet the specific needs and use cases of various clients, ensuring the platform remains versatile and valuable for all users.

Roadmap and Enhancements Conclusion:

Cora PPM continues to evolve with new features and enhancements designed to offer users more control and flexibility in managing their projects. The platform's ongoing development aims to address users’ needs and provide solutions that are both robust and customizable to different organizational structures and demands. With new functionalities like project-specific rate metrics and planned improvements in import/export and documentation, Cora PPM is committed to delivering a platform that effectively supports project management professionals in various industries.