Ways to reduce your project costs

Looking to reduce your project costs? We have outlined several approaches for you to review and consider within the context of your organisation and specific project environments. Once you've selected the opportunities that will fit best, apply them to find areas where costs can be cut.

Managing resources to reduce waste

Increasing capability and skills to deliver successful projects in-house reducing external reliance

Check your project is delivering what the organisation needs - not what it wants

Reduce governance and overheads

Learn from what you do well and understand where to target improvements

Managing resources to reduce wastage

Let's start with project resources. Usually one of the largest costs in a project is the cost of the people doing the work. However, project plans do not always contain resource information beyond allocation of tasks and activities to individuals or roles. The assumption here is that a person allocated to the project is working at full capacity for the duration of their role. It does not take into account bottlenecks, critical path dependencies or the management team's capacity to allocate a full-time workload of activities.

Tools ,such as resource levelling applied to a project plan, provide clues to areas where time wastage could be occurring or there is a risk of it occurring within the life of the project.

Resource levelling is used when limits on the availability of resources are paramount. It simply answers the question ‘With the resources available, when will the work be finished?’.

APM - Difference between resource smoothing and resource levelling

Applying resource levelling to a plan will help to establish appropriate levels, and validate estimates, for the resources needed to deliver the project outcomes. If you are time constrained and have a hard deadline for delivery, resource smoothing would be more appropriate.

You are aiming for efficient utilisation of project resources, with a realistic schedule that identifies the bottlenecks and a clear critical path as early as possible. With these in place, the opportunities to reduce cost through minimising wastage can be found.

Increasing capability and skills to deliver successful projects in-house reducing reliance on external providers

From the sponsor to administrators, increasing the skills of your project teams builds an environment where better decisions are made and alternative solutions can be considered. Less resource is wasted and projects success rates improve. Competency assessments work alongside existing HR practices and processes to identify skill and competency levels while mentoring and coaching builds the skills and capabilities your organisation needs to deliver successful projects.

Make sure your project delivers what the organisation needs

Identify 'pet' projects and projects with limited strategic benefit and then shut them down. This can be difficult to do as projects in flight have been invested in, both financially and personally, by those involved. Use good Programme and Portfolio Management to ensure strategic objectives and direction is sound. You can reduce overall spend through ensuring only essential projects are commissioned.

Reduce governance and overheads

Establishing the right level of project and programme governance provides consistency, efficient processes including change control, greater co-ordination across teams, managed interdependencies, reduces duplication of effort, streamlines reporting and supports efficient decision making. Too much governance will create wastage. Getting the balance right to key to reducing costs.

Learn from what you do well and understand where to target improvements

Review past projects to learn from what you do well and where improvements are needed. Project Reviews and Healthchecks provide an opportunity to understand what works in your organisation and what areas not so well. Learn from costly mistakes and prevent them from occurring again.

More from our Project Management series

For support in implementing change in your organisation, please get in touch or give us a call.