Completing your project on time and on budget
As a business owner, when you decide to take on a new business project, your instincts may tell you that managing it will be fairly straightforward. However, the ability to successfully manage projects is a valuable skill that takes a great deal of knowledge and experience.
Large or small, any project that you take on will require a highly skilled project manager. If you do not have someone on your team who can effectively manage your project, you may choose to hire a professional project manager to oversee things for you. Keep in mind that your chances of success are increased by keeping focus on the project's scope, timeline, budget and resources, as well as your ability to identify and manage risk.
The scope of your project is not just about the final result you expect to attain; it also accounts for the steps you take along the way. While your ultimate goal may be the finished product — the house you're building, for example — you still need to get building permits, pour the foundation, rough in the electrical and plumbing, erect the frame, build the roof and so forth. Each step is of equal importance, and many steps depend on the ones before them. Managing your project's scope is about maximizing your budgeted time, money and resources to carry out the necessary steps on the way to reaching your goal.
When considering the scope of your project, keep the following in mind:
- Do all involved parties/stakeholders agree on the scope of the project?
- Have you hired or appointed a project manager?
- Have you determined, in detail, the roles of suppliers and contractors?
- Have you reviewed previous projects to determine areas of success and failure?
- What resources, time and money have you allocated for the project?
- Is your role part of a larger project? If so, is there any training or a hand-off required when you complete your part?
The creation and implementation of a realistic, detailed and accurate schedule will go a long way toward achieving your ultimate goal. The bigger the project, the greater the number of steps involved, for the most part. It is important for you to accurately calculate the length of time each step will take, and to determine which steps depend on the completion of other steps. Not all steps begin at the same time. For example, if you can't break ground on the house-building project before you've obtained the necessary building permit, you need to account for that time. Your schedule should account for every step and for their dependence on one another. All the steps should be arranged in their proper order.
Consider these points:
- Have you planned and allotted the proper resources for each step?
- Have you communicated responsibilities to everyone involved in the project?
- Has every person that will be involved in the project, such as your contractors and suppliers, been consulted to ensure they will comply with your schedule?
- Have you established various checkpoints throughout the project to verify that your schedule and budget are on track?
- How will you document each step as it occurs, for future review?
- Have you accurately estimated how long each step will take, taking risk factors into consideration? Remember, one setback can cause a ripple effect that will disrupt your entire schedule.
Budgeting finances for your project begins with the creation of a detailed and accurate forecast of your total anticipated costs. You will want to take every aspect of your project into consideration, consult with others who will be involved, and calculate your figures down to the last penny. This forecast will act as your budget.
Along with your budget, it is good practice to create a contingency fund, to be used in emergency situations such as work delays due to bad weather, underestimated resource costs and issues with suppliers. Your budgetary goal is to complete the project at or below your estimate, without accessing contingency funds. Many project management software applications can help you capture and monitor your budget, as well as track milestones, schedules, risks, etc.
Resources are the people, materials and equipment that you require to complete your project. Planning properly so that you have your resources where and when needed is an essential component of managing projects. Creating and implementing detailed project schedules, as well as making all involved parties aware of their roles, will also help you keep your resources on time and on task.
A key to managing resources is effective communication. Suppliers, contractors, labourers, managers — every person who plays a role in your project should be completely aware of their respective roles: the what, where, when and how of their tasks. The more you keep your project's players in the loop, the more likely they can bring the project to a successful conclusion.
Any occurrence that is not part of your scope, which has an effect on your project's budget, schedule or result, constitutes risk. Here's an example in the house-building context: a miscalculation causes your roofing supplier to provide you with the wrong price for the cedar shingles you ordered for the roof. Recalculation results in your cost being increased by a few thousand dollars.
Incidents like this might seem like a one-time thing. However, if a few unfortunate incidents like this occur, you might suddenly find your project is significantly over budget.
The experienced project manager prepares in advance for project risk. By brainstorming with your project team to identify potential risks, you can develop a plan to deal with many circumstances, should they arise. If you effectively identify and prepare for risk, you can minimize the negative effects when they occur. At the onset of planning your project, it is very important to assess whether or not your stakeholders are prepared to increase your budgeted time, money and/or resources in the event of risk.
At the completion of your project, it is a good idea to do a final, step-by-step review. If you've documented each step throughout the project, you've made your task of final review much easier. Examine what went well, and in what areas you fell short of your expectations. The information you gather can be very helpful when you begin to plan your next project.
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