How CFOs are moving upstream to protect project margins

Early margin risk requires project-level visibility

Project-based firms report a wide gap between profit tracking and integrated project management. Deltek reports that 86% say they track operating profit adequately or very well, while only 22% report having a fully integrated end-to-end project management system. These measures describe different capabilities. The first concerns reporting an outcome; the second concerns connecting information across project management.

Deltek describes the research as a January online survey of 375 senior decision-makers at architecture, engineering and consulting firms with at least 20 employees in the UK, Germany and Australia. Respondents included Chief Executive Officers, Managing Directors, C-suite directors and department heads in finance, operations, delivery and projects. The results describe reported practices and management priorities. The evidence supports association; causation remains untested.

The CFO mandate is moving upstream of the earnings line

Retrospective financial reporting remains essential. Executives, boards and investors need accurate information on what the business earned and spent. Deltek argues that finance should connect this discipline more closely to operating decisions that affect future margins. Deltek sells technology to project-based businesses and benefits commercially when firms invest in tighter links between project and financial management.

Project businesses make operating decisions throughout delivery. Project profitability measures the economics of individual engagements; revenue factor relates revenue to the labour base generating it; net labour margin captures the margin produced by labour; backlog indicates contracted work still to be delivered; and overhead rate tracks indirect costs against the base used to absorb them. These measures can guide decisions about staffing, capacity, delivery and spending.

For a CFO, timing matters. A decline in net labour margin can trigger a review of staffing or project economics. Changes in backlog can inform hiring and capacity decisions, while weaker project profitability can prompt scrutiny of delivery or commercial terms. These indicators give management information to examine before period-end results are complete.

Deltek found that firms reporting stronger profit growth were more likely to be effective at tracking measures including revenue factor, project profitability, net labour margin, backlog and overhead rate. This is an association, with the direction of causation untested. It explains why a CFO may examine project-level indicators alongside conventional financial statements when assessing developing economic conditions.

Connected project data supports earlier decisions

The practical question is whether finance can connect operating information while a decision is still open. A staffing choice may depend on project demand, utilisation, labour margin and expected delivery economics. A billing decision depends on work performed and what can be invoiced. Bringing those records together gives management more context for evaluating the financial effect of each choice.

Backlog and project profitability provide a similar view. Current profit can coexist with changes in future work or individual project economics because the measures cover different periods and levels of the business. Executives can investigate those changes and decide whether staffing, spending or execution warrants adjustment. The survey evidence leaves the effect of integration on profitability untested.

Profit expectations make this discipline relevant to planning. Deltek found that 78% of surveyed project-based firms expect profits to increase in 2026, and nearly a quarter expect growth of at least 10%. A profit plan creates an ongoing management question: whether current project performance remains consistent with the expected result.

Purchase approvals provide a concrete decision point. Some 34% of respondents identified tighter controls over purchases and approvals as the biggest driver of profitability, compared with 26% in 2024, according to Deltek. Deltek’s reported increase means more respondents selected this factor in the later survey. An approval process lets finance examine a proposed cost against project economics, budgets and management priorities before making the commitment.

The survey supports an association, with several possible explanations for the relationship. Firms reporting better growth may differ from other firms in resources, management practices or other factors. For executives, the useful implication is narrower: connected project and financial information can provide more context for decisions about costs, resources and delivery.

AI has to cross from strategic priority to measurable economics

AI creates a similar measurement problem. Some 91% of respondents consider AI critical to success, yet more than half are not seeing moderate productivity gains or cost savings, according to Deltek. Strategic importance and measured financial return are separate questions. A CFO deciding how much to spend or whether to expand an implementation needs an economic measure tied to the work being changed.

Deltek identified project planning, resourcing, reporting, billing and finance as areas where it believes AI is most likely to reduce manual work, improve visibility and help protect margins. Deltek has a commercial stake in technology for project-based businesses, so this is the company’s characterization of where AI can create value. Evidence from the survey does not determine which AI implementations generate returns.

The financial test starts with a workflow. In planning, leaders can measure whether the process changes effort or accuracy in ways that affect project economics. In resourcing, they can examine changes in how work and people are allocated. In billing and finance, they can measure changes in the work performed and connect them to cost, timing or margin.

This gives finance a specific role in technology investment. A useful model output can support an experiment, while an investment case requires a measurable economic consequence in a real process. Finance can define those measures before deployment, then test whether the expected operating and financial changes occur. This links technology to workflow, workflow to measurable change, and that change to financial performance.

Cyber risk makes the CFO remit financially concrete

Cybersecurity puts a direct financial dimension on technology risk. Two-thirds of firms surveyed said they had been targeted by a cyber attack during the previous three years, according to Deltek. Among those affected, 45% said the incident produced direct financial losses. These figures make cyber exposure relevant to financial planning and risk assessment.

A CFO can treat cyber risk as an input to financial judgment. Operational disruption can hurt business performance, and a successful attack can create direct losses. Finance can assess exposure and evaluate proposed spending on controls against the financial risks facing the organization. That work happens before any eventual loss appears in financial reporting.

Control depends on decision quality

Heather Larkin, Chief Financial Officer at Deltek, offers a resource-focused interpretation of the company’s research. Larkin says, “it’s not a case of having the most resources or the biggest teams, but about moving fast and demonstrating control.” Deltek has a commercial stake in management technology for project-based firms, so this remains the company CFO’s interpretation. It does not demonstrate that resource-constrained finance teams outperform larger teams.

The narrower management principle is about how resources are used. Larger teams and additional systems alone cannot ensure that relevant project, operational and technology information reaches decision-makers in time to shape spending or execution. Finance can contribute while project, AI and cybersecurity decisions remain distributed across the business. Its role becomes material when financial judgment is applied while management still has choices about investment, spending and execution.

Key takeaways for leaders

• Bring margin visibility closer to project delivery: Profit reporting alone does not provide the project-level visibility needed for early intervention. CFOs should connect financial and project metrics so margin risks can be examined while management still has options.
• Move financial judgment upstream: Track project profitability, revenue factor, net labour margin, backlog and overhead alongside financial statements. These indicators can inform staffing, capacity, spending and delivery decisions before period-end results are complete.
• Connect project data to active decisions: Integrated operating and financial data can give leaders more context for purchase approvals, staffing and project execution. Use it to test whether current performance remains consistent with profit plans, without assuming integration itself causes higher profitability.
• Tie AI investment to measurable economics: Strategic importance does not establish financial return. CFOs should define workflow-level measures before deployment and test whether AI produces measurable changes in effort, cost, timing or margin.
• Treat cyber risk as a financial exposure: Cyber attacks can create direct losses and operational disruption. Finance should incorporate cyber exposure into planning and assess security investments against the financial risks they are intended to reduce.
• Apply financial control while choices remain open: More resources or systems do not by themselves improve decision quality. CFOs can have greater impact by bringing relevant financial judgment into project, technology and spending decisions before commitments are fixed.