Is It Possible to Save Time and Money and Still Turn Out a Quality Product?

by: Curt Finch

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The holy grail of project management: Saving both time and money while still turning out a great, high-quality project. It’s a goal every company wants to achieve, but many fail to do so for many reasons. Whether it’s lack of resources, lack of budget or lack of knowledge, all too often, companies allow projects to completely spiral out of control in scope, budget or one of many other ways projects often go off the rails.

So just how common is the problem of out-of-control projects, and more importantly, what is the key to preventing it?

How a Project Becomes an Albatross

A few years ago, the European Services Strategy Unit did a study to determine how many projects went over budget and what it cost companies in the long run. Their findings were more extreme than predicted:

  • Total value of contracts – $47.65 billion dollars.
  • Cost overruns totaled $14.54 billion dollars.
  • 57% of total contracts (105) experienced cost overruns.
  • 33% of total contracts (105) suffered major delays.
  • 30% of total contracts (105) were terminated.

A similar study published by the Harvard Business Review–analyzing a total of 1,471 IT projects–found that the average overrun was 27%. While that alone is substantial, the study found that one in six projects overran their budget by an average of 200% and overran their schedules by nearly 70%.

What was the cause of these problems? The HBR study found a number of factors were to blame. But many of them came down to poor planning and a lack of information. Some companies grossly underestimated the cost and time involved in a given project. Others bought into their own marketing hype, oversimplifying what was involved and overestimating their own abilities.

Finding the Happy Medium

It should go without saying that proper project planning is a must. But what exactly does that mean?

While lofty goals may sound good in the proposal phase, they can be devastating over the life of the project. The larger and longer the project, the more room there is for overly lofty goals to be missed and the project overrun its budgetary and time constraints.

But even with the best planning, unforeseen things occur. This could be anything from a client-requested change of scope to unforeseen changes in the marketplace that require adjustment.

One of the best ways to cut down on overrun project costs and poor budgetary planning can be by simply tracking the time and expenses on a per-project basis for the employees involved. By doing so, project managers get a more accurate estimate of project scope and what is being spent in regards to time on the project and actual expenditures for the project. Tracking time can also reveal which employees may require a little nudge or more guidance to accurately finish the project with skill.

More often than not, a project overruns its objectives earlier on than later. Unfortunately, many project managers blindly follow the course outlined and do very little analysis to make sure that intermediate goals are lining up with budgetary and scheduling goals. If you’ve accomplished 10% of the project’s goals, but have consumed 15% of the budget, there’s no reason to believe that trend is going to change without interceding and making adjustments. Without making adjustments, you could expect that at 20% of the work, the project will have consumed 30% of the budget and so on. At this rate, by the time the project is done, it will have cost 150% of the allocated budget.

Some Guidelines to Consider

With every project, it’s critical to have established milestones in place to evaluate the progress made and see how that progress lines up with the project’s parameters and goals. The earlier this is done, the sooner potential problems will be discovered and adjustments can be made to keep the project on target.

Don’t forget to stay in regular communication with employees on the project in case they need a little clarification throughout the milestones, as well. Not only does this keep the project on track, but adds cohesion to the group efforts, as well.

With good planning and diligent follow through, your company can avoid being an unfortunate statistic, and can achieve the goal of saving time and money while delivering a quality product or service.

About the Author

Curt FinchCurt Finch is the CEO of Journyx. Founded in 1996, Journyx automates payroll, billing and cost accounting while easing management of employee time and expenses, and provides confidence that all resources are utilized correctly and completely.

Meeting Photo via Shutterstock

Article source: http://smallbiztrends.com/2014/10/wise-project-management.html

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