WHITE-PAPER

7 PROJECT
COST CONTROL
TECHNIQUES
Includes a step-by-step guide for project
managers
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CONTOL TECHNIQUES
TO IMPLEMENT RIGHT
AWAY?

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THE FIVE TECHNIQUES

#1 Better Project Budgeting

#2 Automation Tools
#3 Track Project Analytics
#4 Cheaper Contracts
#5 Spend Management System

2 BONUS TECHNIQUES FOR

IMPLEMENTATION

#6 Step-by-Step Guide to
Developing a Proven Strategy
#7 Podcast: Deep Dive into Cost
Reduction
 #1 BETTER PROJECT
BUDGETING

Project managers are no strangers to budgeting the costs of a product.

Throughout the life-cycle of a project, managers should reevaluate their cash
flow and check whether the project is “on budget”.

Here are some tips for project cost management processes when it comes to
budgeting:

Budgeting apps let managers break down costs such as material

procurement, labor, wages, and other operating costs.

Project budget templates estimate income, outgoings, and all the costs
associated with projects.

Project management software does both of the above and automatically

updates costs over the course of a project.
 #2 AUTOMATION
TOOLS

There’s a misconception that project management can’t be automated, but

this isn’t strictly true.

Although project management relies on many creative-orientated tasks that

can only be performed by talented people, there are aspects of the job that
can certainly benefit from automation, including many routine back-office
responsibilities. These include:

Submitting cost estimates

Quality control
Time management

Automation tools certainly require an initial outlay, but they should provide
managers with a sizeable return on their investment. Research shows that, on
average, across the board, automation provides cost savings of 40-75
percent, and these savings can continue for several years.
 #3 TRACK ANALYTICS

Analytics will also help managers cut costs. The best analytics tools provide
managers with unparalleled insights into their projects, so they can make
savings that benefit the entire organization. With this valuable intelligence,
managers will identify areas of their projects that they can scale back. This
could cut overall operating costs significantly and free up resources.

There is a wide range of metrics that will benefit project managers. These
include the following:

Task analysis, where managers can compare current

tasks with those from previous projects. This metric
is useful for spotting operational inefficiencies and
reducing wasted time and costs.

Timesheet analysis, where managers can track their

teams in one place for deeper insights. With
timesheet analysis, managers can identify high-value
members of staff who work the hardest on projects.

Progress analysis, where managers monitor their

current progress and make sure projects are on time.
This means managers can meet deadlines quicker
and complete projects sooner.
 #4 FIND CHEAPER
CONTRACTS

As contracts come to an end (or become suspended), managers should talk

to multiple contractors and vendors and choose companies that provide the
best value for money.

There’s no need to rush, though. Managers should always review a company’s

past performance and completion rates before they sign any contract.

Managers should never presume a quote is a final price, either. Good

negotiators will ask companies about hidden costs such as penalties,
contract termination fees, and other charges.
 #5 SPEND MANAGEMENT
SYSTEM

Managers purchase various items during the project life cycle, but few have
access to data about these purchases. As a result, they might overspend (or
even under spend). This is where a spend management system proves useful.

A spend management system lets managers monitor their purchasing

workflow from one centralized system, which provides valuable real-time
insights into their projects. With good cost controls in place, managers get a
360-degree overview of their business expenditure, and they can quickly
identify areas for cost-cutting.

Implement a simple, flexible, and

affordable spend management
software that provides 100%
spend visibility is essential for
project success.

Project managers need data at

their fingertips to track and
approve orders on the go,
maintain accurate budgets, and
enhance collaboration between
all employees involved.
 #6 STEP-BY-STEP GUIDE TO
DEVELOPING A STRATEGY s
note
Take
STEP ONE
Identify your costs: Look for places where the costs don’t align with your
strategy. Collect cost data, and then analyze the costs for the most important
operations in your business to the least important.

STEP TWO
Complete short, medium, and long-term analyses: Don’t fall into the trap of
identifying outstanding short-term cost reduction opportunities only to find
that the benefits don’t last over the long-term. If you find opportunities that
will reduce costs over the long-term, those are more beneficial.

STEP THREE
Improve your business processes: Take a business-wide perspective to
understand how your business processes operate. Break down barriers
between departments to understand where opportunities for improvement
exist. Optimizing a process in one department that will complicate the
process as it flows through the rest of the organization is never a good idea.

STEP FOUR
Review existing contracts: It’s not difficult to stay with a vendor over the long-
term and there are advantages to doing that. However, be sure to take time
during this process to review contracts to determine if you can negotiate
more favourable terms.

STEP FIVE
Consider automating cost management: Look for automated tools that will
let you manage budgets and review spending habits. This will help you make
sure that your departments are sticking to their budgets.
 #7 PODCAST: DEEP DIVE
INTO COST REDUCTION

If your team is looking for ways to reduce operating expenses on projects,

your procurement cost reduction strategy is the area you’ll want to focus on.
To convince administration that this is worthwhile, there are two points to
gain from this podcast:

A clear value proposition as to why a procurement strategy will benefit

your team.

Providing your team with a plan that clearly indicates how to initiate the
strategy.

With over 30 years of procurement experience, Hani Abdou provides a

definitive view of procurement’s value in any organization as part of UK
Business Reporter’s “Future CFO” report.

Listen to the full question-and-answer style interview hosted by Anna Delaney:

LISTEN TO PODCAST
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