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How to stop your project costs from over-running

Mon, 05/19/2014 - 2:14pm | by DebbieFletcher

Cost and time over-runs affect most projects to some degree, whether they be large-scale public works or relatively minor software implementations. Often these over-runs can be foreseen and taken into consideration, but if not then they can be ruinous.

There are various steps a business can take to protect itself from losing control of a project, of which the following are probably the most important:

Communication Skills

Effective communication between every member of the project is a must, so that problems are flagged and dealt with early. One example of this would be document management - each team-member requires access to different types and levels of information that they need to do their job properly, so well-organised resources will save a lot of time.

Leadership

There needs to be a clearly-defined project lead - someone who takes and delegates responsibility, makes decisions, and communicates the project requirements to the rest of the team involved. Ideally this should be someone with a proven track-record in project management.

Careful Planning

The success or failure of most projects is often decided in the earliest stages. If a business fails to devote enough time to the planing process - checking for areas of possible conflict or delay, then things can quickly go off track. Good planning finds where problems are likeliest to occur and seeks to mitigate them ahead of schedule. It’s also essential here to ensure all cost and time estimates are as accurate as they can be.

Good Partners

If you’re using any external companies, such as consultants, architects or engineers, then it’s naturally critical to check that they are capable of fulfilling their end of the contract. Do they have the skills and people you need? Do they have a history of successful projects behind them? Are their own cost and time estimates accurate? Selecting the right partners is vital. For the project lead, it’s also worth remembering the importance of having a point of contact in each partner company that you can reach easily, and trust to deal with problems at their end.

Avoiding Scope Creep

A battle that affects many major projects is when additional functionality requirements are suggested during the project implementation, causing delay and argument. To try and mitigate this, companies should agree milestones beforehand and, once they are attained, move on straightaway to the next section of the project.

Scheduling

Any well-organised project will have a detailed schedule - usually day-to-day but sometimes drilling down into hours. The schedule must be realistic, and flexible enough to cope with any problems that arise.

Monitoring

Every stage of the project should be closely monitored. Not only so that the project manager can see the materials being used and costs incurred on a real-time basis, to get early warnings of any issues, but also so that on completion an effective evaluation can be carried out. Lessons learned for the future are by far some of the best results to come out of any project, whether a success or failure.

 
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