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This non-trivial setup features two reporting lines from a person: the line manager takes care of an employee long-term ("solid line"), while current project manager - within the scope of task he is assigned to ("dotted line" of reporting).
IT/Software companies, whose strategy is to deliver higher value services, usually tend to implement Matrix organization principles - by introducing the role of Line manager.
Also known as Functional manager, this highly qualified specialist oversees a group of software engineers with similar functions and skills, in terms of their professional development, regular assessment and salary review, and resourcing activities.
Usually, companies can't identify financial KPIs per Line manager's zone of responsibility, so the role does not own PnL, while Project managers do.
The matrix structure groups employees by both function and product / project ... (Wikipedia)
If your Software company lives in Matrix, but within a traditional "1-story" management accounting approach - we have bad, and good news for you:
Mathematically, it isn't possible to accurately allocate costs in such a landscape. Either they average previous periods data to get resource hourly cost estimate, or distribute factual bench / sick days costs between projects - making their profitability blurred and interdependent.
The "2-story PnL" method offers a way to look at Software development business so, that management can analyse projects profitability isolated from "Resources layer" events, and Line managers can own PnL - read further:
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