Reduce Project Costs in 4 Steps

A project’s success is directly influenced by how well its scope, time, and cost are managed. However, learning how to manage and reduce project costs can be the toughest of the three areas to master.

Project cost can be difficult to manage because of the number of variables that cause it to fluctuate. A single missed deadline or lack of process standardization can be all it takes for a project’s cost to start ballooning out of control.

Despite these variables, you need to be able to accurately estimate what a project will cost so that you can be sure that you have the proper resources required to see a project through to completion.

Luckily, there are four key steps you can follow to help reduce project costs and keep everything moving along according to plan.

Step 1: Make Sure You Save Money in the Correct Areas

One of the main steps to reducing project costs involves making sure you’re trying to save money in the right areas. For example, you never want to reduce project costs by cutting employees because you’re only setting yourself up for disaster. Identify areas with true flexibility and cut costs from those areas.

Step 2: Identify Areas That Can Clearly Continue with Less Money

Another step to reduce project costs involves looking towards areas that can obviously continue with less money. For example, most projects will carry a certain level of contingency funds in case of an emergency. At a certain point in the project, these types of contingency funds will become less and less necessary and can be cut as a result.

Step 3: Scale Down Redundancy

Scaling down redundancy is another tactic that will help keep project costs low. Look for hidden areas where you may be able to remove features or functionality that aren’t necessary but will help pull-back the budget. For example, depending on a project’s scale and inherent limitations you can try hiring a cheaper project coordinator.

Step 4: Create a Plan for Your Next Steps

Once you’ve worked through the other steps, the budget is the final area where you should turn your attention. An accurate budget can help significantly reduce costs across your entire project.

After you see how much money you’ve already saved, you’ll have a good idea of the steps that you need to take moving forward. As mentioned in this blog article, reviewing the causes of budget problems will prevent issues from reoccurring.

You now have a final dollar amount that must be saved, which provides you with actionable information about what you need to do next. You can use software such as Primavera to assist you in this area.

Managing project costs can be a headache for both project managers and project team members everywhere. By understanding the exact steps that you have to take to reduce project costs and implementing the use of a project management software you can help make sure that your projects come in on time and under budget – every time.

Key Takeaways:

  • Utilize project management software like Primavera to help identify areas that can sustain immediate cost cuts.
  • Properly identify the costs that you are trying to reduce to help develop an actionable plan of attack.
  • Cut money from obvious areas that can sustain these types of immediate cost cuts.
  • Look towards your overall budget for guidance.

What tactics do you use to help reduce your project costs? Join the conversation below.

Take a moment to think about your project portfolio.  In our most recent eBook, we’ve highlighted some key ways you can improve the success of your project portfolio.