5 Ways To Drastically Minimize a Project’s Operational Costs
Cost overruns are a habitual offender in a typical project setting. And they seem far more intimidating when they’re nowhere close to your original estimates. Frequent bouts of unexpected expenses not only lower confidence in a project’s promised benefits but also force project teams to cut corners, resulting in shoddy work. Worse, an error in judgment sees costs being invested in the wrong activities while shrinking the budget into work that is already experiencing a slump.
Businesses are under pressure to deliver value in times of disruption without making deep cuts into the project spend. Project experts would argue that trade-offs are inevitable, i.e. when clients request for express delivery and work quality, they’d have to be prepared to pay more and reimburse you for the costs your business incurs to get the project off the ground. But, what if there were ways to minimize a project’s operational costs without compromising on quality and service delivery?
Here are some tips to get through a project’s operational costs unscathed:
1. Automate agility
By cutting down the number of effort hours spent on manual processes and the associated labor costs, more businesses are active users of Artificial Intelligence applications in a bid to reduce operational costs. Even better, it minimizes the margin for human error and runs quietly in the background without disrupting existing work.
Technical project managers are leading projects with elements of both Artificial intelligence and the Internet of Things. This emergent AIOT technology aims at creating a wider network of connected interactive devices to facilitate real-time audits, quality assurance checks, reduced risks and extra savings.
Besides freeing up a project manager’s time to strategize at a high-level, automation takes care of repetitive administrative tasks, enabling agile teams to focus on core business functions, remain productive on the clock and produce intended deliverables that boost the project’s financial returns.
2. Use business software
Contrary to the popular belief that procuring project management software is an additional cost to the thinly stretched overhead, adding a resource management software actually gives you more actionable data to work with.
For instance, it unifies resource and project workflows for inflight projects, thus making it easy to check in on a particular project’s status. High-level views of resource schedules that are synced to the activity calendar lets you ascertain if the right skills are being leveraged, which tasks are on track and if the existing workforce capacity is being healthily utilized.
While most software is openly sourced, think of buying a team-wide application as a long-term investment. For one, if a key member is unavailable or absent, you can still look at reports and dashboards to make informed decisions regarding future projects.
And for another, it’s easier to track individual work, absences, training and induction times with a tool that optimizes work schedules even as demands fluctuate in the future.
3. Upskill workers
Your projects are as good as the people driving them, which is why human capital management processes should invest in the type of training your workforce receives.
Besides bring down operating costs, the right upskilling measures taken in advance repurposes skills within current roles. And with an upgraded set of competencies, your employees are adequately prepared for newer responsibilities added to the role. This saves you the trouble of outsourcing work that can just as easily be done by your in house team.
This way, a portion of the project fund can be reused towards fixing skills gaps and nurturing the potential from within. Workers who are offered the opportunity to upskill are also less likely to leave your firm citing lack of growth and professional development.
With a talent pool that’s suitably caught up, you can tie newer capabilities strategically to the value added to the project, thus guaranteeing true quality.
4. Work remotely
Opting to work from home is a win-win for both businesses and their employees. Remote work cuts down the time office goers would take to commute. Besides which, there are fewer workplace distractors to pull your worker’s focus away from the tasks they’re on. In fact, 52% of workers surveyed in a Udemy study revealed feeling more productive when they weren’t working in a noisy office.
The operational costs of a business also goes down when you save on office space. For example, you can assess occupancy and make adjustments where necessary, from seating arrangements to even the consumption of power, thus lowering your energy bills!
Given the host of easily integrable messaging portals and platforms, your staff are still connected to the office and remain on hand to collaborate with their colleagues. Whether it’s a decision regarding action items, priority logs and status updates, everyone can interact with one another, pass on information,stay atop their work and even be in a position to lend a hand to unfinished, critical tasks.
5. Welcome an alternative workforce
In a move designed to retain valuable expertise and remain cost efficient, several businesses are openly welcoming an alternative workforce comprising of freelancers, contractors and part-timers in addition to full-timers.
As specialists in a certain field, an alternative workforce can fill in for those times that regular staff go on leave, resign, retire or are laid off. Considering that more and new roles are being created, it’s all the more important to have an adequate supply of people, regardless of the type of work contract offered.
What matters more is sourcing this talent pipe from the point of relevance, know-how and familiarity with your business requirements.
The gig workforce has the upper hand here, as they would have prior experience on a diverse range of projects, enabling them to grasp the essentials a lot faster than a new full-time hire. So long as they’re on your payroll, not only are you paying them what they’re worth but are also mobilizing billable projects with true resource utility!
In the age of digital disruptions and flexible work options, cost, time and scope overruns are vexing for project managers, no matter how many projects they’ve led or been part of. After all it is they who have to justify their project estimates and provide an explanation for failure rates.
The pressure is on to close projects successfully and deliver innovation without violating any project constraints.
You know you’re successful in reducing operational costs when project cost management follows the Pareto rule. In other words, when investing 20% of the project budget into 80% of work ensures mission-critical task finish on time. That being said, labor costs overrun during a time crunch when competent resources are unavailable or stretched thinly for the timeline you need them for. With these 5 tips, you’ll ensure you have the right supply and quality of skilled labor to drive projects even as the landscape of work evolves!