5 Ways To Get ROI From Your Project Management
Starting a new construction project can be an exciting time! The possibilities are endless – increased revenue streams, opportunities for your firm to grow, and the prestige that comes with being associated with a job well done.
It’s an alarming fact that for every $1 billion invested in projects, $122 million is wasted due to poor performance. So how do you ensure that you maximize the ROI on your project management?
Let’s take a look at some of the steps you can take to ensure that your project is properly positioned to be as lucrative as possible, and doesn’t leave you in an untenable financial situation as it progresses.
1. Know The Clear Scope Of Your Project
Did you know that only a third of projects were completed on time and on budget in 2015-2016? The dreaded scope creep has a tendency to rear its ugly head as time goes on, frequently resulting in unanticipated time and cost expenditures that could be avoided with a clearly defined project scope.
Surprises will always present themselves during a project, and it’s tempting to want to deal with them in a way that pleases the client. However, it’s an unavoidable fact that solving pre-existing problems that arise during a construction project will only add to the scope of the project.
You’ll have to constantly ask yourself if it’s worth it, in the end, to expand your operations to include extra items, and how much of an impact it will have not only on the timeline itself but your ROI on the project.
Having clearly defined boundaries from the outset and sticking to them as much as possible will help to ensure that your project runs as smoothly and efficiently as possible.
2. Keep Costs Under Control
Setting a realistic baseline budget at the project’s outset is critical to seeing an acceptable return on your investment. While it may be tempting to be overly optimistic regarding your costs during the bidding process, doing so leaves you little margin for error in accounting for the unexpected.
One of a project manager’s major areas of responsibility concerns effectively managing resources as efficiently as possible so that costs do not inflate beyond projected values. And the key way to ensure that you keep your costs under control is to ensure that hours worked are properly tracked and align with the budgeted forecast.
With a constant eye turned to maintaining costs within agreed upon boundaries, you’ll be well ahead of the game in protecting your overall return on investment.
3. Ensure The Numbers Are Sound
According to a recent study, a shocking 34% of projects begin without a proper baseline being put in place. By failing to establish any sort of baseline for the project financials, you are effectively going in blind.
In essence, the success or ultimate failure of your project will live and die with knowing what you can and can’t deliver. It’s, therefore, imperative that you give proper consideration to what your profit expectations are and whether you can live with the margins you foresee as your returns.
As the project evolves and cost structures change, you’ll ultimately be in a strong position to weather any storm and end the project in a profitable position.
4. Put In Place a Culture Of Profitability
Your project management team needs the proper expectations of profitability from the get-go, which should drive everything they do moving forward. It’s this mindset that will help to ensure that the project is executed as cost-effectively as possible.
Part of creating this culture lies in the distribution of tools that support an environment of profitability. Integrated project-oriented software should be in place to ensure that everyone involved has access to key milestones, metrics and performance indicators that will ultimately drive a profitable project.
Striving for transparency is a key factor in having a profitability mindset, and will bring with it its own set of rewards. By shining a light on all activities within the project, you’ll be able to highlight inefficiencies and proactively reduce costs that can easily prove elusive.
Tools such as MySmartPlans construction document management, for example, can provide transparency and prevent hidden costs by centralizing project documentation in an easily-accessible manner. By deploying this kind of intelligent support architecture, you’ll quickly find that you’ll be able to keep your eye on the prize while you manage the day to day tasks.
5. Ensure Project Goals Align With Company Goals
When planning a new project, it’s important to ensure that the project goals are on par with your company’s overall ambitions. Many firms take on construction projects simply because “they are there”, failing to take into account that it may not, in fact, be strategically advantageous to do so.
To that end, choose projects to work on that will ultimately be of value to your firm. Even if the financials aren’t as lucrative, if the project brings in positive intangibles then it’ll ultimately be considered a worthy return on your investment.
When you’re trying to increase the return on investment for your project management, following these steps can help you increase your bottom line. And MySmartPlans can help, giving you the construction document management tools you need to help reduce costs and drive your profitability. Contact us to learn how we can revolutionize your document control.