According to the Project Management Institute, project management challenges account for $109 million for every $1 billion invested in a project.
Especially during this pandemic where finances have taken a hit, it will be beneficial to find ways to reduce how much your organisation spends on executing projects. Since no business aims to incur such losses, below are a few ways to help reduce project costs without compromising the quality.
Open up contracts to competition
An effective way of reducing project cost is by not restricting yourself to a single contractor. Prices are bound to decrease in the absence of a monopoly. Therefore, create a list of contractors who promise quality and find out what they can each bring to the table.
In a bid to secure your contract, they will put in the effort to research and make sure they have a fair idea of their competition. Reputable contractors aren’t afraid to adjust their prices and offer better services to enable them to stay in the lead. This will help you to select the contractors offer that best suits you.
Reduce the time allocated to projects
Time is money, so look to make the most use of your time by shortening the duration for completion of activities. This reduction can be achieved through multitasking.
Performing two or more tasks during a single timeframe can directly impact your labour, facility, and administrative costs; it causes them to decrease, thereby reducing your project’s overall costs.
While multitasking can be advantageous, things can also go south if you don’t pair the activities properly, so keep this in mind.
Make a strategy for job rotation
Low human resource productivity negatively affects the project quality and causes an increase in cost. Therefore, it will help monitor and gather knowledge on your employees’ skills and interests to help you in task allocation.
Employees also tend to get bored when work opportunities are limited and repetitive, reducing their productivity. To fix this, human resource managers can create a job rotation strategy which exposes employees to different project tasks.
By doing so, they get the opportunity to develop new skills to add up to their primary skill set, which also fuels career development.
Improve processes
Making an effort to find and adopt new ways to accomplish tasks is smart and cost-efficient. For example, upgrade your payment systems to a mobile solution that will allow you to accept payments anywhere and anytime.
You can also consider outsourcing some tasks at a low price instead of trying to do it all by yourself.
Use comprehensive project management software
In these modern times, software solutions which provide valuable business insights for aspects such as project accounting and management are easily available. These software help monitor progress and can prompt you when projects are going over budget.
Project managers will also benefit from the structure these tools provide to use their teams better.
The ability to manage your project cost reflects the success of the project. Usually, before budget approval, the cost is usually not fixed, and adjustments may be welcome. However, this may not be the case after budget approval.
The responsibility, therefore, lies on the project manager to try to stay under budget since an increase in the budget may not be allowed.
