In this fourth installment of our mini-series focused on crucial project management topics, we look at project cost and how to manage it. Aside from time, cost is one of the most important project aspects to have under control. Without a budget, project work cannot be sustained; it doesn’t matter how well the project is going if you don’t have the money to continue that progress. You might need to know when to ask stakeholders for more money, or you may need to figure out how much to scale back costs by. Both of these tactics, as well as everything in between, are actions that could determine the fate of your project. The key takeaway is that you need to be able to assess the status of your project’s budget and manage it closely.
What is a project cost
As with time or scope, it helps to classify what the cost and budget for a project are. At the low end of the scale, there are the ultra cheap projects that require next to no budgeting. These are generally small in scope or short in length, and tend to be easier to manage. From there, the next level up is the mid-range. This is the category that most projects fall into—not inconsequentially cheap, and not sweat-inducingly expensive. At the top of the scale are the projects that endlessly drain budgets and incur excess costs. One key relationship to note relating to cost is efficiency—how quickly and proficiently is the project progressing? The time it takes to complete a project is inherently tied to how much the project costs. From the outset, it might seem that all of the expenses are accounted for, and time is already factored into the equation, but in the frequent case where projects extend past their deadlines, there can be hidden operational costs. Your team needs to be paid, and your equipment and infrastructure aren’t, in most cases, free. Managing the timeline and scope of your project can help you alleviate some of the stress of managing the cost.
At the end of the day, we all want the same thing when it comes to project cost management: the lowest cost possible. The biggest step towards that is to put the time and effort into planning ahead. Do as much research and make as many inquiries before you set out on tackling this project. Identify the risks and obstacles that might come your way, and plan out mitigation strategies. Define how you will allocate your budget—where will you be doing your spending, and for what? All of these relatively small acts can help you keep you on top of budget issues as they arise, instead of forcing you to default to throwing money at the issues.
What can you further do to help Project Cost stay down
As with time and scope, it helps to track your project’s cost and your plans for how to keep it in check. Since the budget for any given project can change, it’s important that the tool you use can handle that flexibility. By tracking your project’s costs in OneDesk, you get that flexibility, which gives you insight into every change and redirection that needs to happen and ones that already have passed. OneDesk allows you to have all of your budget plans and in one unified spot, so you aren’t scrambling to find your numbers and notes when problems arise. Using software like OneDesk to track your project costs allows you to catch potential disasters before they happen and plan around them without having to manually manage spreadsheets and documents.
Photo Credit: The Shrinking Dollar/ frankieleon / CC BY