At some agency, somewhere, right now, someone is crunching numbers. “I’ll need John, Amy, Jason…20 hours here, 10 hours there, buffer 20 percent…” Looking back at similar projects, they may add a few hours here, pare back scope there, carry the one…And then, voila, a tidy little estimate that’s sure to strike gold.
Until it doesn’t.
Project estimating and budgeting is both an art and a science. One Andrei Bernovski knows all too well. Working in project management and operations at agencies such as Tribal DDB, Razorfish, Sapient and boutique firms, he’s seen his fair share of what-if scenarios and projects gone good and bad.
Inspired to solve his own personal pain points, Andrei co-founded Price&Cost, a project financial estimation and financial management tool. Hear how he set out to right estimating wrongs and how it’s better to adapt the budgeting wheel than try to reinvent it.
Want to get better at projects and profitability? Join us at the Digital PM Summit. Register now and save.
Carl Smith: Hey everybody, and welcome back to The Bureau Briefing. You know it's Carl. It's always Carl, but what you might not know is that I hate spreadsheets. I offered at one point to create a t-shirt that said, "I hate spreadsheets," but then I found out some people actually like spreadsheets, and that in itself was a revelation. Well, today, we have on the show Andrei Bernovski. Now, Andrei looked at spreadsheets and said, "There's got to be something better." He is the CEO and co-founder of Price&Cost, which is a B2B tool which helps you stay on top of project costs and remain profitable, which probably explains some of the struggles we've had, and the fact that I don't like spreadsheets. Maybe Price&Cost is something for me. Welcome to the show, Andrei. How are you?
Andrei Bernovski: Thanks so much, Carl, for the nice intro. All great. How are you doing today?
Carl Smith: I'm doing great as well. I just want to understand a little bit more about who you are. What did you do in your career that made you eventually say, "You know what? I'm going to start a company, and I'm going to fix this spreadsheet thing"? Share with everybody listening, like what's your background?
Andrei Bernovski: Sure, absolutely. My background is in project management and operations in agency world. I've done that for over a decade. Spent the majority of my time in London working in different agencies, consultancies, likes of Tribal DDB, Razorfish, Sapient. Very different companies in terms of size, and maturity, so I've worked in boutiques, smaller agencies as well. I guess the idea for Price&Cost sort of came naturally. It was really me scratching my own itch.
Whatever company I went to, I got faced with the same problem, right? We all know that project financial management is key, really, for company overall profitability. We're in the professional service business. I saw different solutions to that problem. Some agencies would use professional services automation or PSA tools. Some would go with really sophisticated and crazy expensive ERP solutions. Some would be based purely on spreadsheets.
Funny thing is that no matter how good, or expensive, or sophisticated the solution was, everybody still resorted to spreadsheets in the end. That's a really sort of funny fact, because you know, for example, take Sapient, where you know, it's a huge company. Three, 5,000 people, right? They had a proprietary Oracle-based solution there that could do wonders, but everybody in the delivery team, everybody in the operations ran on essentially overbaked spreadsheets, right?
That approach has a lot of inherent issues, starting from, you know, it not really being very user-friendly, to the lack of flexibility, because once you set up your templates in a certain way, it's really hard to change it. Consistency across the teams, across the accounts, because you know, everybody would go and create their own version, right? If somebody needs to be fixed, they'd go and they'd just try to fix the formula, which essentially breaks everything.
You know, having seen that, I thought there, as you rightly said, there’s got to be a way to do better. We created Price&Cost, which I think you described it really well, is a project financial estimation and financial management tool for professional services agencies.
Carl Smith: I'll tell you that having spent a lot of time with operations folks as well as project management folks, somebody's always got a spreadsheet, right?
Andrei Bernovski: That's true.
Carl Smith: It's like everybody just huddles around the laptop, and they start looking at the spreadsheet, and they start oohing and ahhing a little bit, and then eventually, they start going, "Oh, well we do it this way." It's not like they walk away disillusioned, but they still haven't quite found that pot of gold that they thought they were going to find. Explain with Price&Cost, when somebody sits down and takes a look at it, what is it that they initially see that kind of lights up their eyes?
Andrei Bernovski: Sure, absolutely. Price&Cost looks like a spreadsheet in its core, and we actually done it on purpose, for the reasons that, you know, as you said, people have this, they have their spreadsheets. We've given them an interface, and we've given them an application that sort of feels familiar straight away. However, under the hood, Price&Cost is a really sophisticated piece of software. What it allows you to do is to, straight when you open the application, it shows you dashboards with all of your projects, and it's laser focused on that financial performance management.
It shows you your expected revenue or budget, your expected internal cost, and your expected profitability at completion of the project. It tells you where are you today against that, right? The whole idea of Price&Cost is you use that software not only to monitor and track, but you use that to create those initial estimates, which allow you to set your projects up for success right from the beginning.
Rather than estimating blind, right, and saying, "We may need X amount of hours of design, X amount of hours of creative director, and this is what the fixed price that we're going to go with," what it will allow you to do is see straight away. Okay, and so what profitability will that resolve in, right? With Price&Cost, we're all about experimentation. We're all about giving you the flexible tool for you to come up with the best estimates that works for you, as well as for your clients.
That's why what you can do is you can actually go for multiple what-if scenarios. Even if it's a point of estimation, right? We see a lot of clients using that for [inaudible 00:06:40] estimation, right? We see Price&Cost being used all the way from sales, right? Your client services team would use that tool, you know, to take a sort of existing template you might have in Price&Cost, and adjust it to the needs of a specific project.
Straight away, they would see that, "Okay, so let me test the client budget, their expectations against what it's actually going to cost me, right, and see the profitability straight away." They may see that, "Okay, it's actually not going to work," right? If the clients are saying they only have $10,000 to deliver a specific piece of work, actually for us to be, at least say 50% profitable, we need to sell it at 20 straight away, right?
That sort of entity, that project carries from your client services all the way through to delivery in one tool. In Price&Cost, right? You'll then have your delivery team, your project managers, go in there, take that initial ballpark that your sales may have created, and you know, work through that, and sort of enhance it, and go a bit more granular, a bit more detailed.
You know, it is just something that I've seen from my own experience, that as a project manager, or program manager, all those work alongside, client services directors, or heads of client services, and account managers. Quite often, you would have a situation where you get a project on your lap that's already been sold and agreed with the client. It's a scope with a certain budget. You go to a client service person and you say, "So, can you explain to me exactly why we are selling it at that price?" There has never been a good answer that I heard. There's always, you know, why they want that additional revenue, but with Price&Cost, what it allows you to do is it allows essentially the whole team to be sort of motivated to make that decision off the back of project financials.
Carl Smith: Obviously, with spreadsheets, it can be scary to have a lot of people in there. Even using Google Sheets or whatever, you might be able to give different levels of control, things like that. How does it work with Price&Cost? Is there a view-only, a read-only type scenario? Are there reports that can be generated to be shared in different ways? What are the different ways that you can integrate the team?
Andrei Bernovski: Absolutely. Good question there, Carl. At its core, we're all about transparency. We believe that being transparent with that financial information on the projects, no matter who's looking at it, whether it's an account manager, or project manager, or associate project manager, is really helpful. Then, we do have different access levels. You know, we, for example, have the ability to hide internal costs, right, or cost rates for resources. A lot of companies are sensitive sharing that across the whole team, and for more junior people seeing that as well.
You mentioned reports there, which is a good point. We do have sort of per-user access to specific reports. If you don't want to be showing profitability figures or internal cost figures for a specific time period on a specific collection of projects or accounts, we have the ability to control that as well.
Carl Smith: The whole team gets to use it. Is it intuitive? Is there a learning curve? Especially, and I'm not picking on [Biztev 00:10:36] people, but maybe a little bit, is it intuitive enough that people just pick it up and run with it?
Andrei Bernovski: That's what we've seen, right? Well, we've put a lot of effort into making it as intuitive as we can, and I mentioned there at the beginning that it sort of looks like a spreadsheet. Obviously nicer, but at its core, that's what it ... It's a grid, right? It's a grid where you've got your resources as rows, and you've got your time periods, be that weeks, months, or days, however granular you want to estimate, as columns. That's the most natural way people will [inaudible 00:11:19], right?
If I ask you today, and say, "Carl, can you tell me how much it's going to cost to deliver certain scope," right? Given you've got the experience in knowing how long certain things will take, this is how you would approach it in Excel, right? You would go and you'd say, "All right, I need John, I need Amy, I need Jason, and they will work for 20 hours here, 10 hours here, five hours here." Rather than trying to recreate, essentially reinvent that wheel, we've adapted it.
Price&Cost looks very clean, right? If you look at the UI, it's sort of no strings attached, and that's the whole idea, because I, personally, have seen a lot of solutions which try to be super clever and try to, essentially, to be jack of all trades, and offer you this and that about the projects, and talk about the timelines, and talk about work breakdown structure, and financials, and everything in the world, but in the end, they don't really do any of those things well.
What we're trying to do is be a bit different, where we're tackling only the financials, right? We're not really looking to move into other aspects of project management there for now. We're trying to do that as best as we can. Obviously, bringing that clarity and demystifying that scary world of financials is what we're all about.
Carl Smith: It's terrifying. It's a terrifying world. You brought up two interesting points. First of all, I firmly believe that being familiar is the key to trust, right?
Andrei Bernovski: Absolutely.
Carl Smith: If something looks like something I've done before, or something I can understand, what's interesting about that, is when you start to think about the other tools people are using. What about integrations? Are there ways now, if I'm using another product, that that data can come over easily? That's always what I see being the tough thing for somebody, is when they start worrying about the redundancy, or having to leave something that's been a trusted tool.
Andrei Bernovski: Absolutely. It's a great question there, Carl. We do integrate with other solutions. Now, today, we have the sort of box standard CSV integrations, so you can import the data into Price&Cost from your existing ERP system, or you can use the CSV import, for example, to periodically be importing time sheet data into Price&Cost on your projects. That really covers a wide array of software. I think any system today can output a CSV file.
What we've started doing some time ago already is working on native integrations. We have an integration with Harvest. I'm sure you know, a very well-known time tracking tool. My personal favorite.
Carl Smith: I may have heard of them.
Andrei Bernovski: Of course you do. This is, you know, I am biased, but it is really magical. I say that being very proud, but it's not just me saying that. We hear that a lot from our clients as well, who are [inaudible 00:14:36]. Actually, what this allows you to, is it allows you to provide so much more insights on your project financials based on that time tracking data, right? If you look at our Harvest integration today, what it allows you to do, it allows you to estimate your project in Price&Cost and when you integrate, we will pull all the settings from Harvest that you have, all your resources, their roles, bill rates, cost rates.
Essentially, there is, you know, nothing unique to populate the system with. You just click connect, and all the data is there straight away. You can go in, estimate with that data, and when estimating, we will show you all the financial aspects. Not just the budget, like Harvest will do, right? We'll show you the cost, we'll show you the profitability, allow you to generate quotes that are sort of Excel or PDF exports. We'll allow you to go through those multiple what-if scenarios.
Then, this is where the magic comes in. You just click a button and that project is sent to Harvest. Straight away. It's created there on Harvest for you with all the settings, with all the baseline budgets, assigns you a team there, and from that point on, what we do, on a nightly basis, we synchronize the time sheets. What it allows us to do, is it allows us to offset your actuals against your original plan that you created in Price&Cost.
What this does, is then it allows us to show you not only where you are today, right, on project, but also, where are you looking to end up at completion? That sort of proactive nature of tracking project financials is what allows you to essentially be sort of steering the project in the right direction periodically, and adjusting small things here and there, which in the end, will ensure that you're not only delivering budget and time, of course, but you deliver a project that's actually profitable, and you have control of that.
Carl Smith: I really thought you were going to say the magic is, when you push that button, that the money comes out.
Andrei Bernovski: I would love that to be the case.
Carl Smith: If you can figure that out, I will sign up immediately. It will be so fast. No, but that's amazing that you have that level of integration with Harvest, and people have that amount of insight. Here's a question. I see more and more ... Now, this is more on the midsize shops, but people starting to go more to retainers, more to membership models, things of that nature. Is Price&Cost strictly project-based, or is there a way to use it if you're looking more of a retainer, ongoing relationship?
Andrei Bernovski: Absolutely. Great question again. When I mentioned flexibility at the core of Price&Cost, I really meant it. We are trying to be very agnostic to that way that the agencies run. If it's a more classic model where it's retainers, something you see a lot with PR agency, or it's this sort of new fancy value based pricing, which really is just fixed price project, right?
Carl Smith: We've got a whole ’nother episode to go into it.
Andrei Bernovski: I'm sure, I'm sure. No, I've got very strong opinions about that. You know, it's time and materials. We support all of this. Essentially, in Price&Cost today, we support four different billing types. Your T&M, capped T&M, fixed price, as well as retainers. That allows us to work with different sizes, different types of agencies as well.
Carl Smith: How long have you been running? When did Price&Cost officially become available, even in a beta?
Andrei Bernovski: We started our beta about a year and a half ago now, but obviously, you know, me and other co-founders started working on the code, started working on the product alongside our day jobs, I think three and a half years ago.
Carl Smith: When did you make that decision to cut the day job and go full bore with Price&Cost?
Andrei Bernovski: It's a great question. When we were in the beta, we've, you know, done a bit of content marketing, try to promote the product on BetaPage, and on all the sort of early adopter communities. We've had really great response, right? We've had companies like Capgemini, right? Companies like Ernst & Young. Companies of such a caliber taking act of interest, right? Signing up for the beta, trying things out. You know, it'll be honest to say that the product was absolute crap back then, but that's the whole point of it, right? That's where you start.
What that showed us is that, look, it seems that we're actually, we have a problem that we're fixing. At least, you know, the way that we position it. Obviously, the product itself back then wasn't really fixing that problem very well, but the promise of it being fixed got a lot of, you know, quite serious companies interested.
With that in mind, we've had our first precedes rounds from investors from Finland. That essentially gave us the opportunity to go all in on that.
Carl Smith: What was that like, when you got the word that the investors from Finland had signed? Did you do a little happy dance?
Andrei Bernovski: We did. It's actually interesting. I was in Estonia at that time, and two of my other co-founders were in Finland. We were doing the weekly sort of Skype catch-ups, right, for what? I think two and a half years by that time, right? That was the one where we essentially, you know, pour a glass of whiskey each and cheer to each other over Skype. It was fascinating. It was scary, a bit, of course, but you know, I think that's what we worked towards, and that's why we spent the nights and weekends working on that for, well, two years at that point.
Carl Smith: So far, what I've heard from people in the community have taken a look, is there's a lot of promise. I'm curious, what are you looking forward to in 2019? Where do you see Price&Cost going?
Andrei Bernovski: Sure. What we've seen from the first steps in integration, and integrations in Harvest, is the first time tracking tool that we've done. We're now already developing integration with Toggl, another quite popular time tracking application. We actually see that this is probably a good way forward for us. There was a lot of reasons why. It's because of this tight nature of integration, but it's also the value that we can add to users of those existing systems, without really them doing much, right? They don't have to change their workflow. We are not trying to disrupt it. We're not trying to come in and say, "Right, so scrap your time tracking tool. You know, we're going to provide you with one," right?
I think that's our philosophy. We want to be doing more and more of those integrations, and time tracking tools seem to be a very good starting point. Obviously, started with Harvest. We're doing Toggl. There's others like, you know, ClickTime, and others that we already have in the pipeline.
From there on, I think the big next step for us, something we want to achieve in 2019 is to then also start offering a team scheduling functionality in Price&Cost, and obviously, it's something that is a big undertaking, something that we're already planning and researching. You know, Harvest have Forecast, right? Forecast is a great product, but there is a lot of other users of other time tracking systems who would love to have that functionality. There isn't really much on offer there.
What we can do on Price&Cost, is we can essentially tie the world of project financials with your time tracking tool that you're using already, and on top, provide the capability of scheduling your team.
Carl Smith: Wow. That sounds great.
Andrei Bernovski: Big plans there.
Carl Smith: I was going to say, yeah. To think that it was just three and a half years ago or so that you started, and you've been on a roller coaster. Congratulations for your success. I'm excited to see what comes next.
Andrei Bernovski: Thanks so much, Carl.
Carl Smith: For everybody listening, we'll be back soon. Appreciate you tuning in.