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Preventing Cost Overruns
Cost overruns are a common occurrence in project management. I have covered in an earlier article about the reasons why cost overruns occur. In this post, I will cover the ways to prevent your projects from having cost overruns.
1. Pay a lot of attention to project planning
Planning is the most essential component of project management and the biggest weapon against cost overruns & delays. Think of all the major scenarios and flesh out the complete scope of the project before a single line is coded. Once the scope is defined, get a sign-off from all the stakeholders.
2. Check a vendor’s capabilities before hiring
- In many complex projects, you might need to use outside vendors to do part of the project tasks. Before you hire a vendor, pay an attention to the following:
- Find out their team’s capabilities and check if that matches your project requirements. Improper skill-sets match can cause a significant drag in your projects.
- Find out if their cost estimates are realistic.
- Check how good are they at sticking to deadlines in their previous projects.
3. Attempt to stay within the scope that was originally planned
Fighting scope creep is the biggest challenge for a project manager. The developers want to add their favorite features, the clients start asking for things that were not originally planned and the testing team wants a change in some of the features. Sounds familiar? While some of the changes might be called for, drastic scope creep that put the project in danger. It is essential to exert control and convince all the stakeholders why the increased scope can harm the project.
4. Use good scheduling tools & charts
Proper scheduling is a must in complex projects. Improper scheduling can cause wrong cost estimations and increase the idle times of some of the team members. You could use a simple Gantt chart or look for more advanced project scheduling tools to help you with sceduling. Read our earlier article on charting tools you could use for project management.
5. Make sure the stakeholders in the project are on the same page
Effective communication can help reduce the delays by avoiding working on wrong things and making the scheduling work better. As a project manager, it is your responsibility to keep the communication among the team members work seamlessly. Read our earlier article on best practices in stakeholder communication.
6. Constantly track and measure the progress
You can’t improve what you don’t measure. A project manager has to constantly track the progress of the various tasks and have various metrics to measure in the projects. This will provide early signals of project delays, while also giving you opportunities to fix the issues before they boil over.
Recommended Project Management Software
If you’re interested in learning more about top rated project management software, the editors at Project-Management.com actively recommend the following:
monday.com Work OS is the project management software that helps you and your team plan, execute, and track projects and workflows in one collaborative space. Manage everything from simple to complex projects more efficiently with the help of visual boards, 200+ ready-made templates, clever no-code automations, and easy integrations. In addition, custom dashboards simplify reporting, so you can evaluate your progress and make data-driven decisions.
Tackle complex projects with Wrike’s award-winning project management software. Break projects into simple steps, assign tasks to team members, and visualize progress with Gantt charts, Kanban boards, and calendars. Manage resource allocation and forecasting with software that’s easy to launch. Automation and AI features strip away time-consuming admin tasks so you can do the best work of your life. Streamline your practices, align your team, and ensure you hit deadlines and stay on budget.