jeudi 2 janvier 2014

Three Not So Obvious Tips to Reduce Project Costs

A lire sur: Tenstep

When a project is trending over budget, it is not always obvious how to respond - especially if the remainder of your budget is also allocated. Sometimes it seems if you are trending over budget it is impossible to get back.
Here are three techniques to help. These are not so obvious and might be missed when you are looking for solutions.
Implement "Zero Tolerance" Scope Change Management
This technique can be applied to help remedy a project that is either over deadline or over budget. Many projects begin to trend over their budget because they are doing more work than they originally committed to as a result of poor scope change management. If you are at risk of missing your budget, the project manager must work with the client and team members to ensure that absolutely no unplanned work is being requested or worked on – even if it is just one hour – unless formal scope change management is invoked. To repeat - this does not mean that there can be no more scope change requests. It simply means that EVERY scope change request must go through scope change management (which should be happening anyway). All other energy should go into cutting costs and completing only the core work that was agreed to.
Improve Processes
There may be cost overruns caused by inefficient internal processes. Get team member feedback and look for ways that are within your team’s internal control to streamline processes. If there are cost implications caused by external processes, try to negotiate changes to the processes on a going forward, or at least a temporary basis.
This is a good technique for longer projects since you have a chance to optimize your project processes, see the results and optimize some more. However, it may not make sense for smaller projects. It is hard to do much process improvement on a 30 day project. By the time you would want to make any process improvements the project would probably be over. 
Set up More Detailed Cost Accounts
Just as it is difficult to manage activities that have a long duration, it can also be difficult to manage the budget if the funding is all in one place. In both cases, the difficulty arises because you have a hard time understanding where you are at any given time. One technique to provide more budget control is through the use of more detailed cost accounts.
Cost accounts are ways to allocate funding for your project so that you have more precise control. Instead of having one large budget with all of your costs, you can separate your overall budget into lower level cost accounts. For example, you could set up a cost account for each phase of your project. You could also set up a cost account for each deliverable. Since these budgets are now allocated at the lower level, you are in a position to know much earlier if you have budget problems.

There are many other obvious ways to reduce costs, including cutting back on non-labor costs, cutting back on staff, looking for cheaper alternatives, etc. The three techniques above can take longer to work, but can help get back on budget. 

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