9 Ways to Keep Projects Under Budget

9-ways-to-keep-projects-under-budget

Even the most successful organizations constantly confront unexpected project changes. How can you and your firm not only survive those challenges, but profit?

Christopher P. Martersteck, AIA, LEED AP, DBIA, AECPM, an A/E/C project management consultant at PSMJ, shares strategies for keeping projects under budget every time.

  1. Envision success early. From the very beginning, keep in mind both the scale and complexity of your project. Managing the expectations of both your client and your team from the get-go provides time to course correct without losing money.
  2. Document the work. “A detailed scope of work is your friend,” says Martersteck. Having milestones, reports, deliverables, and end products in print is necessary when clients try to get a better deal—they often do—and you must defend your fee. “The only way a client can reduce the fee is to reduce the scope, because [they’re] inextricably linked.”
  3. Break down the budget. Use both upward and downward budgeting, both of which are essential techniques, then bring in unit price and staff level budgeting to confirm the final estimate.
  4. Create a project management plan. No matter how big or small, one of these—with input from all team members—distills critical information, acts as an alignment tool to get everyone on board, and is your yardstick for success.
  5. Hold internal kick-off meeting. Initiate a dialogue and earn buy-in among key team members. This is the time to do things like validate and refine client goals, get commitments for meeting deadlines, and establish a change management plan.
  6. Hold external kick-off meeting. “Being transparent is a good idea, but don’t reveal everything to the client,” advises Martersteck. Examples: firm goals, budget, and internal contingency/risk management plan. Do highlight what differentiates you from competitors “and makes clients believe you are legitimately worth more.”
  7. Track progress. Have daily check-ins with team members to get updates on project changes, clarify expectations and assignments, and answer questions. Review timesheet data at least once a week. If staff don’t fill out timesheets correctly every day, “you lose 5 to 10 percent of the cost for the work,” Martersteck says. Follow up more formally weekly.
  8. Spot scope creep. This happens for a variety of reasons, so be sure to get prior authorization from the client for any added features—or you have no leverage. Keep a change log and enumerate additions in sequence.
  9. Ask questions. A formal or informal project review with the principal and project manager yields some of the most valuable information. Are you making your budget? Is the client meeting agreed-upon financial obligations? What corrective actions are required? Even if the answers aren’t ideal, the discussion “should not be an inquisition,” notes Martersteck. “It should be a brainstorming opportunity to get your project back on track.”