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Easy Tips to Stay On-Schedule and Within Budget

Business

Let’s face it, projects are a necessary evil that cause all sorts of headaches. No matter how much scheduling and budgeting goes into pre-project planning, projects always seem to last longer and cost more than anticipated. However, budgets and schedules are two sides of the same coin. What affects one, will almost certainly affect the other. By using the following tips, staying on-schedule and within budget will no longer be the headache it once was.

DEVELOP BASELINES AND TRACK METRICS

One adage that is true across nearly all professions is that if it can’t be tracked, then it shouldn’t be done. While this is particularly true in industries such as software development and marketing, it can be true in construction as well.  What these other professions do well is make baseline statistics to measure their actual efforts against. Construction managers should do the same.

Baseline budgets should be able to be easily developed from takeoffs/estimations, and scheduling can be easily baselined from historical data. Don’t have historical data? Don’t worry, just make an educated guess. This doesn’t have to be exact science, just a number to measure against.

For example, perhaps drywall was estimated to take four weeks and cost $100k. Actual work was two and a half weeks and $75k. (Don’t you just love dream scenarios?) Even though your number was off, this gives you the opportunity to examine why and how it differed or varied. These variances help to measure and optimize efforts over time. Now, over the course of several projects, budgeting and scheduling has lower and lower variance, meaning budgets are met and schedules kept. Just remember, if it can’t be tracked, you can’t improve on it, and it probably isn’t necessary to the process.

DEVELOP KPIS

Now that baselines have been created, the next step is to develop key performance indicators (KPI). KPIs are particularly useful because they can provide a snapshot of how well the project team is performing at any point in time. By using these metrics, contractors will be able to gauge how well the project is adhering to the schedule and budget.

Finding out the project was behind schedule or over budget at the conclusion of the project doesn’t do anyone a bit of good, so work together as a project and develop KPIs early on—perhaps even before it starts. Then, make sure everyone involved in the projects knows the KPIs and understands their meaning and the effect they have on the project. This should help everyone on the project make rational decisions that align with schedule and budget.

LOCATE AND CLEARLY COMMUNICATE THE NON-NEGOTIABLES

Concrete can only cure so fast, crane operators cost a fixed rate per hour and paint can’t be applied until there are walls. These are but a few examples of possible non-negotiable style items that have little to no room for variance. As the construction manager, it is highly advantageous to locate and quantify how many of these style items the project has. Doing this helps to determine how much variance there can be within the project. It should be easy to see that there is an inverse relationship between the number of non-negotiables and the amount of variance. In other words, the higher the number of non-negotiables the lower the amount of variance the project can afford.

The non-negotiable items should be the cornerstone items for the budget and the schedule; the first things that have cost and scheduled time allocated to them. In essence, these are things that will require no estimation of time or cost because they have no variance. After they have been identified, make sure everyone on the project knows this list. They can even help to serve as milestones for the entire project team and help shape everyone’s decision making process.

Staying on-schedule and within budget is a delicate and tedious process. It requires attention to detail and dedicated performance tracking. With practice, everyone can become a master. However, by following these simple steps, even the greenest of construction managers can make a project stay on-schedule and on-budget.

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