As project managers, we need to make sure that a project budget is spent responsibly while delivering a high quality outcome. We′ve got many tools, techniques, and strategies at our disposal, and yet there are just as many projects that end up over-budget as under (some would say more).
A lot of this is due to rushed planning or overly optimistic timelines. But there are other nasty surprises that may wind up sucking the money out of your project budget:
Contractors
There′s no shame in hiring contractors to help your team get things done. But they require a bit more management than regular team members, if only because you′re paying extra for every minute of their time. If you′re not careful, you may wind up getting charged way more money than you can afford to spend.
Rework
Nothing drains a project budget faster than doing the same task twice. Whether the reason for the rework is internal or external, the amount of money you throw away is the same (although you can always get the client to pay for their changes””especially if they′re off-scope). A thorough internal review process can help reduce the amount of internal rework done, and hard-won experience takes care of the rest.
Equipment per-use
Sometimes you need equipment that is vital to a project, but will only be used at certain points. If this equipment is rented or charged on a per-use basis, then you need to maximize every single minute you pay for. Set up a process that will maximize the equipment while you have it””whether it′s setting up an assembly-line process, doing things in bulk, or otherwise.
Task Scheduling
Sometimes it′s best to do a set of tasks in a particular order, even if they′re not linked via dependencies. Let′s take housework for example. Would it be better to do the dishes first, and then start the laundry after? Or start the laundry first, and then do the dishes while the laundry is running? The second is more efficient, because you′re not twiddling your thumbs waiting for the laundry to finish. You′re effectively doing two tasks at once. You can also lump together tasks that need the same equipment, or require the same set of skills.
Project Stagnation
One might think putting a project on hold saves money, but it′s actually the opposite. In a weird way, keeping a project on hold is one of the worst ways to lose money. Interrupting a project kills momentum, momentum that you have to waste precious billable hours building up again. And that doesn′t count material costs, such as equipment rentals, storage space (material and virtual), and gradual degradation over time (like weather corrosion).