IT Solutions Blog

5 Ways to Reduce Project Costs with Project Management

Posted by Crystal Nichols on Wed, Mar 24, 2010 @ 07:56 AM

At the core of any good technology implementation is a strong project manager or a strong project management team. The fact of the matter is that it’s the people working a project, for the most part, which will determine whether the project succeeds and whether it does so in a cost-effective way.

And that’s where it really matters, too: the cost of a project. With effective project management techniques, you can make sure that your project come in under budget and ahead of their deadline.

Here are five ways to use project management to reduce the costs of your project:

1.    Correctly identify costs in the planning phase. The planning process is, in many ways, based on guesswork. You’re making a bet that your project implementation team will be able to get your project done the way you want it done and at a certain cost. Accurately identifying costs is key to avoiding unexpected items down the road as the project gets underway. You need to include the scope of work baseline, the project schedule, your human resource plan, a risk assessment and environmental factors all in your budget process, too.

2.    Utilize in-house expertise appropriately and effectively. Now, some project managers wind up trying to turn in-house personnel into experts in fields they really aren’t that knowledgeable in. Furthermore, it’s often an inefficient use of your company’s resources to use in-house personnel when you can hire the work out. For example, if you’re using your network engineering team to crimp cable, you’re going to save money on the project but cost the company in other ways.

3.    Effectively manage your human resources. Find ways to make sure that your project team and anyone working on your project are working efficiently. Audit hours, and be ready for things like planned vacations and other contingencies. Few things will cost you more than having to hire in an expert at the last minute because one of your key personnel has had her honeymoon on the calendar or six months.

4.    Constantly audit. Know where you’re at, in terms of your budget, at all times. Make sure you’re not over on costs, and if you are make sure that those who need to know about it do. If you need to have the project budget revised, do it sooner rather than later.

5.    Know how to handle your vendors. If a vendor isn’t cutting it, keep on them. If a vendor finds a cost overrun for a situation that should really have been (or even was) suggested during the budget process, put the necessary pressure on the vendor to meet your needs as promised for the price as promised. When that’s not possible, make sure that you’re still getting the best value, and that the vendor isn’t passing along the costs of last-minute necessities to you.

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Topics: project management