6 Ways to Reduce Budget Over-Runs on Project Costs

Budget overruns are a common occurrence in projects large and small.   But does it always have to be so?   Here’s six things that a project manager can do to minimise the level of cost-overruns on projects.

 

 

1. Pay a lot of attention to project planning

Planning is the most essential component of project management and the biggest weapon against cost overruns and delays. Think of all the major scenarios and flesh out the complete scope of the project before a single task is started.   Once the scope is defined, get a sign-off from all the stakeholders.

2. Check a vendor’s capabilities before hiring

In many complex projects, you might need to use outside vendors to do part of the project tasks. Before you hire a vendor, pay an attention to the following:

  • Find out their team’s capabilities and check if that matches your project requirements. Improper skill-sets match can cause a significant drag in your projects.
  • Find out if their cost estimates are realistic.
  • Check how good are they at sticking to deadlines in their previous projects.

3. Attempt to stay within the scope that was originally planned

Fighting scope creep is the biggest challenge for a project manager.  The developers want to add their favorite features, the clients start asking for things that were not originally planned and the testing team wants a change in some of the features. Sounds familiar?  While some of the changes might be called for, drastic scope creep that put the project in danger. It is essential to exert control and convince all the stakeholders why the increased scope can harm the project.

4. Use good scheduling tools & charts

Proper scheduling is a must in complex projects. Improper scheduling can cause wrong cost estimations and increase the idle times of some of the team members. You could use a simple Gantt chart or look for more advanced project scheduling tools to help you with scheduling.

5. Make sure the stakeholders in the project are on the same page

Effective communication can help reduce the delays by avoiding working on wrong things and making the scheduling work better. As a project manager, it is your responsibility to keep the communication among the team members work seamlessly.

6. Constantly track and measure the progress

You can’t improve what you don’t measure. A project manager has to constantly track the progress of the various tasks and have various metrics to measure in the projects. This will provide early signals of project delays, while also giving you opportunities to fix the issues before they boil over.

2018-01-05T14:28:43+05:30