5 ways to boost your project budget plan
With existing professionals upping their credentials and the newly qualified workforce opting to gain work experience in project-oriented roles, it’s evident why project management is one of the most talked about disciplines today.
But as is the case with every lucrative field, project management comes with challenges that have a profound impact on costs, time, scope, data and people. Any seasoned project expert would tell you that creating a project budget plan is half the battle, and the other half is sticking to it.
For one, scope alterations can be requested at any point in time after the project commences. And even with iterative agility, working on these changes would inevitably result in time and cost overruns.
And for another, you’d have to balance competing interests from several stakeholders, which may delay approvals concerning the allocated spend.
Presenting 5 ways to give your project budget plan a boost ahead of the curve;
1. Streamline workflows and workloads
The first step to boosting the project budget plan is to unify projects and resource workflows. After all, every resource, be them technical, material or human have to suffice for the projects in your portfolio. In other words, an optimal quality and quantity of potential has to be acquired before several projects take flight.
A resource management software simplifies this task by syncing your resource pool’s workload to the project schedule. Besides knowing how many projects are running, done or stalled, you can also look at role-based assignments per activity.
In other words, you can assess if the resources assigned were, or are being optimally utilised. This way, you can rank projects by priority and rectify imbalances in skills by reshuffling them across the enterprise.
2. Automate requesting processes
When drawing up a project budget plan, the most cost-effective route is to automate the request for resources. The process involves sizing up your workforce capacity in terms of their competencies, experiential prowess, location, departmental team and even the number of available hours.
Considering the likelihood of planned and unplanned absences, relying on marketing automation helps businesses prevent project missteps arising from over, or under estimating availability. It lets you develop a competency report around skills relevance, thus acquiring the right workforce composition. This way, you can pre-plan measures to staff current and incoming demands while staying within the resourcing spend.
3. Create a WBS
A Work Breakdown Structure or WBS is one of the basic steps in project management. Besides clarifying role-based assignments, a WBS draws up a list of tasks and enables you to rank them in order of priority.
Consequently, the time, resources, effort hours and costs each task per project will consume can be accurately estimated.
Involving the project team in creating this breakdown lets you know what is realistically achievable from their perspective, preventing you from going over the spending limit.
This way, not only can your team members estimate activity costs but no time-intensive task is left for the last minute without utilising critical skills.
4. Use Financial forecasting
No project budget plan is complete without estimating expenses. Only then can you establish a cost baseline against which the project’s financial performance can be marked. Financial forecasting predicts and assigns costs to every aspect of a project, from opportunity costs to the resources needed to drive it forward.
It also leaves a margin for overruns and redistribution of unused expenses. Considering the possibility of change requests, your options as a project manager comes down to:
- Requesting more funding to accommodate the changes.
- Substituting costly resources with low-level ones.
Essentially, project financial forecasting lets you make financial changes that stick as closely as possible to the budget, without compromising work quality. You can then compare your staff’s booked hours against the actual hours worked and generate future estimates into the number of billable hours a labour-intensive task takes.
5. Analyse historical data
Unconditional visibility is an asset when it comes to analysing enterprise-wide data. It lets you know what to look for, and where to find it. It records project particulars, enabling efficiency gains from the understanding you get of how multiple projects on the boil performed.
Additionally, project histories record risks that resulted in investing more of the project spend into resolving setbacks than on ensuring desired outcomes were reached on time, within budget.
Extensive documentation on cost-related issues faced in previous projects leave a trail which can be audited before piped projects commence. This way, project reviews and lessons learned facilitate a collaborative knowledge transfer between former teams and their successors.
More importantly, history captures team feedback, such as the reasoning behind requesting for more time or additional financing. Approvals to budget allocations on previous projects can then be tracked, justifying the need to make a similar request in future.