Every project being handled by engineers has costs consideration. And more often than not, it is the most critical factor before the project is completed, an area of focus that project managers simply cannot ignore.
This is why many engineers, regardless if project managers or not, should be able to have ample knowledge when it comes to budget management. Anything that has to do with engineering also have something to do with money.
But for engineers who are in management positions, the expectations are high. They have to minimize the costs and monitor the cash flow so that the company will not suffer. After all, putting up engineering projects are still businesses.
So what are the strategies? Check the list below:
Understand stakeholder’s true needs and wants
Most companies are tied with stakeholders so their needs and wants are important. Their expectations should be aligned with what the engineering manager is doing with the project, especially when it comes to the project cost.
Of course these stakeholders want to save as much money as possible. For them to say that the project is on the right track in terms of the cost, the project requirements have to be identified, documented, and confirmed with all stakeholders. This is then translated into project cost to estimate how much money will be required to complete the project.
Place budget for surprises
In the field of engineering, all projects come with unexpected twists and turns along the way. There are factors and unforeseen circumstances which were not earlier identified.
This gives costs fluctuations in the total project cost – so it is wise that project managers have budget for such cases. The key is to be realistic in estimating early on in the cost deliberation about these kind of costs.
Develop relevant KPIs
For a more detailed project cost management, engineers should establish KPIs or key performance indicators. These indicate how much has been spent on the project as well the difference in the planned and actual project cost.
Revisit, review, re-forecast
In the middle of the project, engineers have to check on the status of the project cost. You might not notice it that you have already had a budget overrun – before it gets worse, do the necessary budget adjustments.
This step includes reviewing the people working on the project. If the project manager sees that there is a need to add more engineers to save costs, then so be it. It’s a matter of handling the resources, both human and money, and converting them into accomplishments.
Let the employees know about the budget status
It pays for the project manager to share about the status of the project cost so that engineers under his watch will be mindful of their own costs.