Article
Project-Based Management: definition, challenges, and best practices to drive your projects
Axelor supports companies operating on a project or job-based model with an integrated, agile, and profitability-oriented approach. In an economic context where controlling costs, deadlines, and margins is critical, project-based management (also called job costing or “management by project”) is a key performance lever to optimize operations and ensure sustainable business growth.
• What is Project-Based Management? Definition and principles
Project-based management involves managing each project, contract, or client order as an independent economic unit. Each “job” encompasses all operational and financial flows that directly affect its profitability: sales, purchasing, labor hours, internal costs, invoicing, collections, and budget tracking.
Unlike traditional accounting or analytical approaches, project-based management allows real-time operational and financial monitoring from pre-sales and cost estimation to final project closure and post-mortem analysis. This approach provides a 360° view of each project, enabling rapid identification of optimization opportunities and potential risks.
• Which companies need Project-Based Management?
This approach is particularly suited for companies organized around client-specific projects or customized orders:
- Service companies: consulting, engineering firms, communication agencies, IT services (ESN)
- Engineering sector: design, technical studies, R&D
- Construction & building: site monitoring, project management, real estate development
- IT & software development: web projects, solution integration, custom development
- Made-to-order manufacturers: custom production, small series, or unit production
In these industries, each project has unique characteristics, budgetary and timing constraints, requiring precise management to guarantee profitability.
• Strategic challenges of Project-Based Management
1. Monitor profitability closely
In a project-based business model, overall company profitability depends on the performance of each individual project. Without a suitable management tool and accurate indicators, cost overruns, time overages, or billing delays are often detected too late, when margins have already eroded.
Project-based management enables:
- Tracking actual vs. budgeted costs: continuous comparison between actual expenses and initial forecasts
- Anticipating variances: automatic alerts for budget or schedule deviations
- Securing margins during execution: immediate corrective actions to preserve profitability
This proactive approach turns financial monitoring from a retrospective analysis into a real operational decision-making tool.
2. Gain visibility and responsiveness for better decisions
Effective project management relies on real-time, reliable indicators: progress rate, remaining work, planned vs. actual margins, resource consumption, milestone adherence, and individual performance.
With consolidated, shared data across teams, decisions can be made quickly and confidently. Project managers identify risks immediately, executives get a clear portfolio dashboard, and operational teams adjust priorities based on profitability objectives.
This transparency also improves interdepartmental communication and strengthens accountability for performance goals.
3. Align teams around a single reliable source of data
Project-based management involves multiple actors with complementary responsibilities: sales teams for estimates and client relations, project managers for planning and monitoring, purchasing for procurement, production teams for execution, and finance for invoicing and controlling.
Without a centralized integrated solution, information is scattered across multiple tools, leading to input errors, time-consuming re-entry, inconsistent data, and wasted time. Document versions multiply, KPIs diverge, and coordination becomes a daily challenge.
An effective project-based management system relies on a cross-functional, collaborative tool, connecting all stakeholders around a single, reliable, and automatically updated source of information, accessible according to user rights.
• Project-Based Management with Axelor: a complete and integrated ERP solution
Axelor offers native, fully integrated project-based management within its ERP, connected to all business processes for maximum coherence.
Complete project lifecycle tracking
With Axelor, each project is monitored end-to-end:
- Quotes and client orders: creation, management, and conversion into orders
- Planning and project execution: resource allocation, scheduling, progress tracking
- Time and purchasing monitoring: logging hours worked, tracking expenses and procurement
- Invoicing and collections: automated invoice generation, client payment follow-up
- Profitability analysis: dashboards, financial reporting per project
All operational and financial data is centralized in a single project view, accessible in real time to authorized users, eliminating silos and facilitating collaboration.
Real-time cost and margin control
Axelor enables rigorous and comprehensive financial control:
- Automatic allocation of direct and indirect costs to each project (labor, materials, subcontracting, overhead)
- Detailed time tracking per employee, activity, or task with full validation and traceability
- Automatic calculation of planned and actual margins for instant comparison between objectives and results
- Continuous variance analysis to identify drift sources and assess profitability impact
- Internal resource valuation including full cost accounting
Managers gain proactive, anticipatory control rather than simple post-mortem analysis, with real-time reporting to act before variances become irreversible.
Agile, scalable, and customizable solution
Thanks to its modern architecture and innovative Low Code platform, Axelor adapts to the specifics of each organization:
- Short or long project cycles: flexible for all project lifecycles
- Multi-project management: consolidated portfolio view and optimal resource allocation
- Contract-based billing: fixed price, time & materials, or milestone-based flexibility
- Custom workflows and KPIs: create tailor-made processes without heavy development
- Integration with existing tools: connect to third-party systems via ready-to-use connectors and REST API
Project-based management becomes a custom operational tool, perfectly aligned with field realities and business constraints.
• Best practices for successful Project-Based Management
• Project-Based Management : an essential performance lever
Project-based management is more than a tracking tool: it’s a strategic lever for performance management, essential for project-oriented companies aiming to sustain business growth in a competitive environment.
With Axelor, organizations benefit from a modern, integrated, and scalable ERP, enabling end-to-end project control, margin security, optimal resource allocation, and operational agility. The platform grows with the company, ensuring long-term ROI.
Ready to transform your project management? Discover how Axelor can drive higher performance and profitability.