5 easy ways to reduce project management costs

What are the main costs involved with project management?

There is a wide range of costs associated with project management, and these will vary depending on the type of project being undertaken, along with its scope and duration. These include:

Labor

You need to take into account how much you will be paying project managers, team members, and other staff involved for the duration of a project. Obviously, the longer it lasts, the more expensive it will become.

Materials and equipment 

Large projects often require certain materials and equipment which can be costly, especially if they cannot easily be used again afterwards.

Communication and technology

Hardware, software, and other communication and technological tools like collaborative platforms are needed to run a project efficiently and effectively. They need to be affordable, accessible, and reliable.

Travel and logistics 

Team members travelling to different locations can involve significant costs. Remote collaboration from different workspaces may be a less expensive, more efficient use of time and resources.

Risks and contingencies 

Projects may require insurance and/or legal fees, and other risk management strategies. Contingency plans and budgets will need to be available for any unforeseen circumstances.

How can efficient methods help reduce project management costs?

Managing large projects can be a complex and costly business. Effective project management using the right tools and methodologies can help to keep costs under control. Increasing efficiency and teamwork can help cut down on the amount of time spent on a project. Using the right tools to track, manage, and oversee projects can help ensure that people know what their responsibilities are and that their projects stay on schedule. Using more efficient, better methods and tools will help save time and money and improve team cohesion and teamwork.

Teams that work well together are an asset to a company for more than just project management purposes. By giving your teams a centralized hub for everything relating to the project that also has all the functionalities they will need to run, manage, and track it, you can help them work better together.

Using an online whiteboard for project management

An online whiteboard can be used as an access point for all the documents relating to a project and allow all team members to contribute equally. Task and time management tools will ensure that everyone is on the same page and aware of deadlines and who is responsible for what. A virtual whiteboard is useful for synchronous and asynchronous work, and meetings and workshops, as well as the day-to-day work required to drive a project forward. Because it is online it can be accessed by hybrid and remote workers. This allows teams to function effectively and efficiently, regardless of whether they are operating in the same workspace together or not.

5 project management methodologies that help reduce project management costs

1. Kaizen

The term kaizen comes from Japanese management philosophy and is part of the ‘Toyota Way’. It refers to the practice of continuous improvement: making small, continuous improvements will have an incremental impact over time. The goal is to identify areas for improvement, implement changes, and then continuously evaluate and refine a project to make sure it is constantly becoming more effective and efficient.

There are various principles at the core of Kaizen. Some people will say there are three main principles to the methodology, others will say there are 15. However, these are some of the core tenets of this approach:

• Let go of assumptions.
• Be proactive and find solutions for problems.
• Do not accept the status quo.
• Do not look for perfect: work towards iterative, adaptive change.
• Find solutions for any mistakes you make.
• Create an environment of equality so everyone feels they can contribute.
• Seek information and opinions from different perspectives.
• Be creative in looking for low-cost, small improvements.
• Never stop improving.

These principles can help reduce costs in several ways. For example, Kaizen emphasizes the identification and elimination of waste, which can include any unnecessary steps or processes. Improved and optimized processes should result in increased efficiency. Workers are encouraged to take ownership of their work and to look for continuous ways of improving. These can all help resources to be used more efficiently and costs to be reduced.

2. The Eisenhower Matrix

The Eisenhower Matrix helps prioritize tasks depending on their perceived urgency and importance. The methodology is named after former US President Dwight D. Eisenhower, who is quoted as saying, ‘What is important is seldom urgent and what is urgent is seldom important’.

The are four categories in the Eisenhower Matrix and it is made up of a 2x2 grid. Tasks are categorized based on the criteria of urgency and importance. The 4 categories in the matrix are:

Urgent and important

Tasks in this category need immediate attention and should be completed as soon as possible. This could be something that is due for a specific deadline or a critical issue that has to be resolved immediately.

Not urgent but important

Tasks in this category are important but can be deemed to not require immediate attention. They can be planned and scheduled in because they are critical to achieving long-term goals, but do not have to be done immediately. These sorts of tasks include long-term planning and strategic thinking, for example.

Urgent but not important 

Tasks can often feel urgent but do not have enough importance to require them to be carried out immediately. They generally do not contribute to long-term goals or have significant consequences if they are (or are not) completed. These tasks can be delegated to others or simply just eliminated to free up time for more important activities. Unnecessary meetings and minor administrative tasks are examples of urgent but not important tasks.

Not urgent and not important 

These tasks are low priority, and you should be able to either eliminate or minimize them as much as possible. For example, by ignoring irrelevant emails and notifications, or not spending time on other distractions that do not contribute to the overall picture or future goals.

If you categorize your tasks according to this method, you can prioritize your time better and focus on the things that are most important and urgent. In this way you do not ignore important activities that are not urgent, you just plan them into your schedule, but you eliminate those tasks that have no value.

3. The PDCA Cycle - Plan, Do, Check, Act

The PDCA cycle is part of the kaizen approach to project management. Team members, working together, can apply small incremental changes that have a large impact over time. The methodology was first developed by Walter Shewhart in the 1930s and later popularized by W Edwards Deming, who emphasised study (S) rather than check (C): his version is known as the PDSA cycle or Deming Wheel. The PDCA/PDSA cycle can be repeated, and not simply be a one-off process to solve a specific problem.

The four steps of the PDCA cycle are:

Plan 

In the initial stage, you will need to define the problem or opportunity and develop a plan to address it. You will need to set clear objectives and set out a detailed plan of action.

Do 

In the second step, you execute the plan that you have come up with. This will involve undertaking the activities identified in the plan, and collecting data so you can look at the results objectively.

Check 

Once you have evaluated the results of the plan you can compare them against the original objectives. This involves assessing whether the plan has achieved its intended outcomes.

Act 

Once the first three steps have been carried out, you can take action based on the results. If it turned out to be successful, you might be able to standardize a new process. Alternatively, you could continue to refine it by going back through earlier parts of the process. If the outcome was not a success you can start back at the initial planning phase and try to develop a new “top of form” approach.

4. PERT - Program Evaluation and Review Technique

PERT is a methodology that was developed by the US Navy's Special Projects Office in the 1950s. It was used to support the Polaris nuclear submarine project and was designed to analyze and represent the tasks necessary to complete a project. PERT charts help managers evaluate the amount of time and resources a project is likely to take.

A PERT chart creates a visual representation of a project and the tasks that will be necessary. Circles or rectangles – known as nodes – are used to represent project events or milestones. These are then linked by vectors (lines) that represent the various tasks required to carry out the project and the dependencies between them. That way you can more easily visualize the sequence of tasks and the relationship between them.

Estimates of the likely amount of time each task will take can then be applied to the chart. These estimates can be assigned as optimistic, pessimistic, or most likely/expected. Optimistic time would be the minimum possible time required, assuming everything goes better than expected. Pessimistic time is the maximum possible time required, assuming everything goes wrong and takes longer than expected. The most likely or expected time will be somewhere in between, based on a ‘best estimate’ and is the average amount of time that would be needed.

Using these estimates, you can use the PERT method to calculate the expected time for each task and from that, the overall expected time that will be needed to complete a project. This enables project managers to more effectively and efficiently identify potential bottlenecks and problems, and schedule and allocate resources.

5. Retrospective

The Retrospective project management methodology is a meeting or process that reviews a project's performance, identifies any lessons learned, and plans for improvements in future projects. A project team looks at what went well, what did not go well, and what could be improved. They will consider goals, timelines, budget, stakeholder expectations, and things like teamwork and overall performance.

The method includes:

• Collecting feedback and data on the project's performance.
• Analyzing the data collected to identify trends and areas for improvement.
• Developing an action plan to address any identified issues and make improvements.
• Implementing the action plan in future projects.

Ready-to-use models for project management methods make teamwork even easier

Online whiteboards are the ideal tool for project management. With endless readymade templates for recognized project management methodologies, they can improve teamwork and reduce project costs at the same time. You can use virtual whiteboards to keep project documents in one place, assign and manage tasks, work synchronously or asynchronously, and use the online tools and templates for more effective and efficient project management.

Whiteboards are a vital part of the visual management process that is so important in effective project management and design thinking. And online whiteboards have a far greater scope than traditional ones. Templates, methodologies and other visual tools can help project managers and their teams work more efficiently together, gather insights, and identify areas for improvement.

Find the right readymade resources for effective project management

An online whiteboard and all its associated tools will make your project management team more efficient and thereby reduce costs. Why not check out our resources for project management templates and advice?