6 min read

Your Guide to Project Management Cost Estimation

Get full  Visibility  and  Control over project Budgets, Costs and  Profitability

Whether it's a few cents or a few million dollars, estimates claim that nearly 85% of all projects go over budget. This can result from mismanagement of labor, materials, or any combination of factors. But these unnecessary wastes in budget require project management cost estimation that can predict bumps in the road.

When working on a tight deadline, there might be expenditures related to rush ordering or redundant staffing. When deadlines are more robust, there could be problems with prioritizing tasks related to this project compared to other projects.

Your team’s skills, knowledge, and experience are the major factors in determining whether you’ll meet your deadlines. Here are some ways that you can improve your project management cost estimation for your next project.

1. Know Your Team

While analytic figures can give you a good overview of projects past and present, they leave out a lot of details. The people on your team are what will get you past the goal line. Project management is all about your relationships with your team.

Knowing your team’s skills and expertise intimately can help you assign people to the right roles. Having them know their responsibilities will also clear up confusion when they’re in the middle of a project. Knowing where your teammates’ work ends and where yours begins can reduce redundancy and ensure that people are working together.

Sit down with your team when you’re beginning the planning and estimation process. Team members will give you estimates on how long each part of the project will take. If one person sees they’re stronger at a task, they can speak up and swap roles with someone for the sake of the project.

Project managers should pay close attention so they have a concrete understanding of what everyone should be doing.

You might find that your project management cost estimation requires you to get out from behind the desk. Dig into the trenches with your team and you’ll see morale build and people working together better.

2. Your Company’s Project Management Process

Once you know everyone’s capabilities and talents, the project manager now has to fit all the moving parts together. If you use a process like an Agile methodology, you can take a look at each sprint and see what’s working. It can help you prepare for any hurdles to the process.

No matter what process your company works with, be sure you know what’s expected with a level of intimacy. If your company doesn’t allow for flexibility in the process, make your team clear on that and be sure you’re setting everyone up for success.

If team members get together and form a plan that falls outside of the process, you need to be able to constructively push back without hurting morale.

Should you decide to move tasks around to fit your project management cost estimation, make your team aware every step of the way. If their work is going to be harder or have to be completed in a different way than they’re used to, eliminate angst by communicating clearly.

Take whatever steps you can to understand the process without applying too rigid of a methodology. Whether you’re working in construction or in the tech sector, you’re working with a team with individual personalities. They come at a job with their own style and way of working.

So long as they’re getting the job done, be gracious and rewarding. If their style doesn’t match your process, find ways to encourage them to work the way you work.

Always check in with your team and make sure they’re invested in the project.

3. Expand Your Own Skills

Companies are becoming more liberal about opening their wallets to fund continuing education programs for their employees. If this is the case at your company, take advantage of it.

If you work in the tech industry, take some courses on web design or development. It can help you communicate with your team, regardless if you actually write code. Apply this kind of model to whatever industry you’re in.

You won’t become the best person for taking over the job of someone on your team. However, your ability speaks the lingo and show them that you know what you’re talking about will have great value.

There’s nothing more frustrating than having a project manager over your shoulder asking for something they don’t know the first thing about. It can hurt morale on your team and break down all the work you’ve done to open up communication.

As a project manager, you need to know about trends as much as your team does. Likely your team will be excited to take on new ways of approaching problems that might turn out to be more efficient and easier. Be sure you communicate with your team about what’s happening in your industry.

4. Get to Know the Team’s History

While you may believe you never step into the same river twice, if you’re not careful, your team could easily step into the same cow pie twice.

If they’ve had a bad history of approaching certain projects in a certain way, they’ll be glad to share their horror stories with you. Be sure that you’re listening.

Better yet, look at the history of projects they’ve worked on and be one step ahead of them. Don’t even bother asking them to work on the kind of project that’s driven them crazy in the past.

If you’ve found that there’s a phase in every project that’s lagged or caused problems, ask your team to contribute to the overall plan. They’ll be happy to avoid those past issues and suggest solutions.

5. Ask Better Questions

Be sure you know the intimate details of the project when putting together your project management cost estimation. Surely your supervisors and executives will be more than happy to throw tough questions your way. Don’t get caught in their headlights.

Know the overall goal of your project. Get an idea of not only what you would call success for this project, but what your client needs to see to understand its success.

To help you stay on budget, get a rough and liberal estimate of how much new spending will be required. Know your client’s budget as well and try to sneak just underneath that number. Rehearse your timeline like you’re trying out for a part on Broadway.

Most important of all, put everything down in writing.

Project Management Cost Estimation Is Worth the Time

Laying out the cost of your project for superiors will please everyone and ensure there’s a guiding beacon in the darker times of your team’s effort.

If you’re still trying to figure out the best angle for approaching your cost estimation, contact us. We can help to streamline your proposal.

 

Understand your projects' financial performance in detail

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