Budgeting & Cost Control Strategies for Project Management

Cost control strategies have been around as long as there have been businesses, but today’s solutions are completely different from the draconian methods implemented made popular in the nineties and earlier on. Most businesses tend to focus on project management overhauls to get the most out of their operations for less. However, making sensible improvements isn’t possible if you don’t know where to start. This is especially true if your operations are largely dependent on legacy hardware and software in addition to out-of-date compliances.

While the phrase, “if it’s not broken, don’t fix it” often applies, your goal should be to understand what’s broken in the first place. And with confidence.

Today, let’s try to paint a clearer picture by highlighting budgeting and cost control principles. By identifying and implementing critical budgeting and cost control strategies for project management, it’s possible to get more out of your day-to-day operations for less!

STUDY MODERN COST ESTIMATION AND BUDGETING IN PROJECT MANAGEMENT

We always say that the first step towards implementing smarter changes is brushing up on the fundamentals. This is the perfect time to read up on modern approaches, especially if you’ve not been keeping up with any tweaks or new technologies that have become widely adopted since opening shop. Understanding how cost estimation and budgeting in project management work in 2020, not 2002, is critical to future-proofing your operations. It also makes your company more appealing to talent that can help drive critical projects forward – a little hint for those of you actively recruiting!

Today’s cost control strategies are vastly superior to traditional bookkeeping and physical spend control methods, enabling you to keep all project managers on the same digital page while they provide data and input useful for making operational tweaks. By acquainting yourself with cloud-based management software and other state-of-the-art technologies, you’ll better understand what kind of impact they may have on your business.

ACCURATE, REAL-TIME DATA FOR INFORMED BUDGET COST CONTROL

What good are your project cost estimation techniques if you don’t have the data to back them up? Implementing an adaptive accounting software solution, especially one with a clear end-to-end viewpoint, is critical to improved budgeting and cost control. Today’s successful businesses wouldn’t be anywhere without real-time, accurate data and plenty of it at their fingertips, especially when almost all budgeting and accounting is performed digitally. This means that it’s never been easier to stay up-to-date on the latest developments, log departmental changes and compare the financial impact, and keep project managers updated with best practices reflecting current operations; all you need is a cloud-based spend report system that incorporates tools for cost allocation and flexible approval rules, among other features.

WHICH PROJECT COST ESTIMATION EXAMPLES DO YOU IDENTIFY WITH?

It’s a good idea to narrow your focus to within your application – there’s no guarantee that a small fast food one-off’s strategy will work for heavy industries, for instance. Before diving in and making tweaks to cost estimation and budgeting in project management, take a closer look at the project cost estimation examples already out there. In fact, there are plenty of them right here on the Tradogram website including case studies of Technical America Inc., Leafline Labs, and plenty more!

Whether you’re comparing resource cost rates, performing bottom-up estimates or attempting to carry out analogous estimating based on multi-project similarities, chances are a competitor out there has gone through a similar situation and documented it. Perhaps they’ve found a solution that could help steer you in the right direction, justified further if your internal data points to the same solutions. These success stories can take the form of case studies, blogs, press releases and even documentaries, so don’t be afraid to dig around and see what you can find online.

Invest the time in finding project cost estimation examples that align with your business as closely as possible, and you just might have an easier time figuring out what changes to make yourself. The only trick to this is understanding what’s unique about your operations, applying a spin to the proposed solution that better aligns it with your project management capabilities and goals.

SOME BUDGET COST CONTROL PROCEDURES ARE BEST AVOIDED

Some tricks in the book are pretty dirty, meaning that a series of unfortunate events are often tied to them. Employees are willing to invest their time, skills and energy in your cause, so the best strategies are those that meet them halfway and aren’t so one-sided. For example, intense maneuvers such as implementing mass layoffs, pay cuts or otherwise that hurt employees are only asking for trouble. Expect morale and performance to drop, followed by a decline in retention. This also creates more work internally through the need to rehire, which itself can present cost upticks and time allocation with training – and that’s if the new hires turn out to even be as good as the workers you had.

With this example, we can see the domino effect unfolding, and these are “cost control” procedures to avoid and leave in the past where they belong – there’s no control to be seen when everything unravels! We mentioned draconian methods earlier on and weren’t kidding; operators need to consider not only the importance of cost control in all aspects of the business but also the repercussions.

NEED HELP IMPLEMENTING AN IDEAL BUDGETING AND COST CONTROL SOLUTION? CONTACT TRADOGRAM TODAY!

In closing, let’s revisit the critical elements of cost control:

• Accurate spend allocation, transparent viewpoints, and data tracking
• Knowing your strengths and areas that need more attention
• Seamless communications to let nothing slip through the cracks
• A clear roadmap to keep all project managers on the same page
• Informed decisions for effective change

It’s clear that optimal cost estimation and budgeting in project management is driven by data. A deeper understanding of your own operations is therefore critical.

Interested in learning additional procurement tips? Check out these procurement best practices to prepare for the future. And be sure to learn why it’s so important to undertake a digital procurement transformation.