Cost Containment is one of the biggest challenges that large projects face, especially when there are multiple contractors and sub-projects. Here are some tips for managing them in any circumstances:
1. Estimate Accurately Upfront
Estimating costs within a small margin of error will get the project off to a good start, setting expectations properly. Although it may require more time at the beginning of the project, having the project manager ask for multiple bids is an excellent way to establish cost baselines and to calculate average costs that you will use throughout.
2. Develop a Realistic Budget
With estimates clearly laid out, you are in a position to establish an accurate budget for the project, giving your team some room for change orders or other contingencies. Using a budget planning tool is critical to this process so that the project manager and other members of the team can see in real-time where you are on track and where you risk going over.
3. Control Costs Throughout
An experienced project manager will keep a close eye on the costs from day one, checking bills against estimates and quotes to ensure consistency. Some of the cost challenges that might arise include unexpected delays, last minute change orders, or unforeseen hindrances to progress. This is where allowing an extra buffer in the budget can make a difference. Otherwise, change orders (which are often common) can begin to pile up.
4. Report Status Frequently and Accurately
Using your chosen project management tool, the project manager should report on budgets and costs at every meeting, keeping the entire team informed about where the project might be over, under, or on track. Doing this keeps everyone accountable for their participation. If you find that one or more of the team members are not on board or are creating issues, speak up about it sooner rather than later. Differences of opinion are expected, but should not hold up the project.
5. Have a Project Postmortem
A good idea for any Project Manager, analyzing what worked and what didn’t after the fact, will give you insight not only for this project but for future ones as well. This knowledge will be especially helpful if you intend to do additional work with the same team, client, and project manager.
In the end, if a project is completed on time and within the budget, it will be considered successful from a cost perspective. Doing whatever you can to achieve both these objectives will go a long way toward impressing the team.