How to Decrease Project Time and Cost With a Few Easy Tricks
Firms undertake projects on a daily basis, from the implementation of a new client website to building construction. Yet over 85% of projects1 go over budget while the others manage with what they are given. No matter the state of the accounts, not all of this money is spent on adding value for the customer, so it is possible to reduce the amount necessary by implementing easy tricks and strategies.
Administration takes a significant chunk of management time, and most company accountants can testify how much is spent on administration expenses. For example, consider all stationery, office fixtures, and recurring office-funded recreational activities. Additionally, bad administration leads to a higher overall cost as worker productivity (amount of work for every hour) falls. Consider every time you loitered around wondering what to do as the work plan was unbalanced or poorly done.
All these problems can be solved by efficiently organizing work and documentation. Henry Ford was faced with the same problem at the start of the 1920s and his strategy became famous as the stop-watch studies2. As the name implies, management utilizes stop-watches to determine an optimal work speed and calculate total completion time. This can be applied to most contemporary industries and can quite accurately estimate the total budget. However, beware that a good plan is as specific as possible so breaking down milestones into smaller times makes it easier for employees to monitor their performance and for management to quickly detect delays.
Furthermore, making a detailed plan allows managers to predict the workload requirements at any single point so that everything is evenly spaced out. It is extremely unproductive and can be demoralizing if the work is concentrated in one period. This type of plan will highlight the optimum number of workers as well as the distribution of tasks so that unnecessary wages are not paid. It will also show the skills requirements so that the firm can hire to the specific skills set required.
Documentation and bureaucracy are the contemporary ills of organizations so simplifying and optimizing the systems is a worthwhile investment. Employees spend a lot of time fetching and looking for documents so making all items available in digital format, and more importantly searchable format, is vital. Having continuous access to the company databases will make the working experience much easier but also reduce paper, print and storage expenses for businesses. As an added benefit, workers would be able to continue their projects outside normal business hours. Infamous for its bad customer service it may be, but Ryanair runs a paperless office which makes its administration a few times cheaper3.
Labor costs are a significant part of expenses, and for services they constitute the bigger part of the project costs. Whenever you think of hiring new workers or outsourcing part of the work consider the alternatives available in-house. If the staff are capable and do not have other assignments, they could reduce the overall project budget as their salaries are a sunk cost, i.e. the salaries will be paid regardless of the project. Under-skilled labor could be trained to do the work, which will be a firm investment in worker development. Do be aware that you should not snatch designated employees from their assignments as this will put the company in a worse position.
Web developers need not be present in the office in order to be productive – they could work from home and save time and money commuting. As a result, they will be able to finish the project sooner, focus on producing quality, and reduce the budget for the work. In some circumstances, asking somebody to commute may even be interpreted as a negative sign.
References:
- http://www.projecttimes.com/articles/got-projects-going-over-budget.html
- http://www.citeman.com/3357-steps-involved-in-stop-watch-time-study.html
- http://www.ryanair.com/index.php/da/faqs/i-am-interested-in-your-financial-reports-company-information-and-anything-relating-to-your-marketing-strategy
