4 Ways Preventing Project Cost Overrun Effectively!

| Published On: 20 March 2023
4 Ways Preventing Project Cost Overrun Effectively!

How many projects have experienced a cost overrun? So many! But, did they know way to preventing project cost overrun effectively?


Ssmallbusiness.chron said, there are at least about 85% of projects cost overrun from their initial budget planning. This cost overrun itself is the construction cost of a project over the project budget that has been set in the plan when it runs in the implementation. Internal factors that cause cost overrun in projects include project documents, labor, project finance, and work equipment. Meanwhile, external factors of cost overrun can range from geographic conditions to national and global economic stability, for example, as is currently the case during this Covid-19 pandemic era.

To avoid cost overrun, good project management is needed to control a project. Without important attention to initial planning, schedule, budget, team division, to a clear work unit as a form of project management, project work can slow down and got cost overrun. Don’t forget about fraud and repeated work that often haunts the work of a project. Not only that, the administrative system in the process of making

reports, which is still running in the traditional way, also more or less drains the project budget cash.

Proporf said, one of the causes for the failure of a project is the lack of access to Key Performance Indicators (KPI) by limited companies. They noted that only around 55% of companies cannot access KPIs in real-time. Most of the current projects still rely on reporting on an online spreadsheet-based tool, which of course has many limitations for producing project realization documents. This shows that project management should move to a digital medium, such as project management software, which is more specific on suitable features to support mobility. If not, the threat of cost overrun on a project will continue to have a great opportunity to hinder or even derail the project. One of the best answers to answer this problem is using project management software.


Then, how to properly prevent project cost overrun with project management software?


How Project Management Software Prevents Cost Overrun?


1. Transparent Monitoring of Project Budget

In projects, the suitability of budget expenditures for each work unit with the initial project budget is of course the main point that must be considered. Unfortunately, project owners often have difficulty accessing documents or graphs of project budget usage from project managers in the field. Starting from budget reports that are filed for too long, to difficulties in detecting fraud occurring in the field. In these conditions,

the project budget reporting system realized in the field must be closely monitored. Of course, the aim is to minimize the amount of cost overrun that occurs in a project.

2. Real-Time Control of Project Plans and Realization

Project management is certainly useful for controlling the initial project plan with its realization in the field. Unfortunately, not all project managers can manage projects properly to reduce the opportunity for cost overrun. This is exacerbated by the traditional monitoring system which is still widely used in the field. In fact, this system is certainly not effective in preventing cost overrun because it is not real-time. The

value of “real-time” is certainly important for seeing, responding to, and controlling the progress and effectiveness of project work done by the team so that it remains on-the-track. Without a real-time monitoring system, work units that deviate certainly cannot be responded to quickly. As a result, the risk of repetitive work that takes up a lot of project budget cash will occur. Don’t let this increase the cost overrun of your project!

3. Switch to Integrated Cloud to Collect and Display Report

Have you experienced difficulties in receiving and accessing project reports in the field?

This generally often occurs in projects that still apply a physical or printed document system to report project reports in the field. This method is certainly not efficient both in terms of time and price. Imagine how long it will take to respond to errors in the field if you wait for the filing of a large number of documents in your hands. Not to mention the time when screening the data in the document, which certainly takes a lot of time. Not only that, the risk of data being scattered, lost, and repetitive printing also complicates the project reporting flow. Already in the digital era, why not switch to online cloud systems? In addition to cutting time and prices, an integrated cloud system can also make it easier for project managers and project owners to screen project data more quickly and efficiently. Imagine how much the project budget would be efficient in this way.

4. Efficient Use of Human Resources and Project Operations

One indicator that absorbs large amounts of project budget cash is Human Resources (HR) or the workforce recruited. Unfortunately, a project is often run by too many people who are really not really needed. The more unnecessary use of human resources means that the more project budget is spent, right?

Not only that, but the operational costs incurred in implementing a project are also indicators that you must take into account. Some of the operational costs that may need to be efficient include transportation, telephone, employee salaries, to administration and filing.

How Does Tomps Project Management Software Preventing Project Cost Overrun?

Project management software is certainly the answer to the cost overrun problems that can occur in your project. How not, Tomps as a project management software, has smart features that improve the performance of your project management. Online and mobile-based, Tomps offers real-time value, transparency, and flexibility in managing a project.

Talking about the cost overrun, Tomps can help you in the efficiency of time and budget for project realization in the field. Evidently, Tomps increases time efficiency in the Installation Check, Project Reporting, Project Data Collect, and Event Response sectors by up to 75%. Meanwhile, project budgets in the HR Costs, Project Operational Costs, and Procurement of stationery can be 100% efficient

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Management
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