Reducing Project Costs

A budget-constrained project is one in which costs are the most important factor in the project plan. Although you still need to balance schedule requirements and satisfy the project scope, the costs are at the forefront of your decision-making processes as you plan and execute the project.

If your project plan calculates that your total costs are above the allowed budget, you need cost-cutting strategies. Your best approach will involve cutting resources because resources and costs are virtually synonymous in projects. As described in the previous section, when you want to bring in the finish date, you focus on tasks in the critical path. In the same way, when you want to cut costs, you focus on resources to gain the biggest cost savings.

Viewing Project Costs

Review your cost picture first, compare it with your budget, and then make any necessary adjustments. To review total project costs using Project Statistics, do the following:

1 Click Project, Project Information.

2 In the Project Information dialog box, click the Statistics button.

The Project Statistics dialog box appears. The current or scheduled total project cost appears in the Cost column.

Note You can also adjust scope to bring in the finish date.

For more information about cutting scope, see "Changing Project Scope" later in this chapter on page 293.

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You can also see the total project cost in the Project Summary Task when you apply the Cost table, as follows:

1 Display the Gantt Chart or other task sheet.

2 Click View, Table, Cost. The Cost table is applied.

3 Click Tools, Options and then click the View tab.

4 Under Outline Options, select the Show Project Summary Task check box and then click OK.

The project summary task row appears at the top of the task sheet. The total project cost, as currently scheduled, is displayed in the Total Cost field.

Two cost reports can help you analyze project costs, as follows:

Budget report. Click View, Reports. Double-click Costs and then double-click Budget (see Figure 9-12). The Total Cost column is a summary of the resource costs and fixed costs for each task.

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Make final decision on office space

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Prepare a budget forthe move

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Fixed Cost Fixed Cost Accrual

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$4,800.00 $2.880.00 $2.760.00 $2.400.00 $2.400.00 $2.400.00 $2.400.00 $2.000.00 $1.800.00 $1.680.00 $1.600.00 $1.200.00 $1.200.00

Figure 9-12. Run the Budget report to view costs for each task.

Cash Flow report. Click View, Reports. Double-click Costs and then double-click Cash Flow (see Figure 9-13). This report forecasts the funding needed for each period of time, enabling you to see whether budgeted costs will be exceeded at a particular point.

Figure 9-13. Run the Cash Flow report to see cost forecasts by time period.

You can sort a sheet view by costs. To review task or resource costs in order of amount, do the following:

1 Display a task sheet or resource sheet, depending on whether you want to see costs by resource or by task.

2 Click View, Table, Cost.

3 Click Project, Sort, By Cost.

The sheet is sorted by the Total Cost field. To return to the original sort order, click Project, Sort, By ID.

You can filter a sheet view to display only tasks or resources that have costs exceeding a specified amount. To do this, follow these steps:

1 Display a task sheet or resource sheet, depending on whether you want to see costs by resource or by task.

2 Click View, Table, Cost.

3 Click Project, Filtered For, More Filters.

4 In the More Filters dialog box, click Cost Greater Than and then click Apply.

5 In the Cost Greater Than dialog box, enter the amount (see Figure 9-14).

Figure 9-14. To see only those tasks or assignments that have a scheduled cost exceeding a certain amount, enter the amount in this dialog box.

To see all tasks or all resources again, click Project, Filtered For, All Tasks or All Resources.

Cost Greater Than

h

Show tasks/assignments whose cost is greater than: |

OK

| $500|

Cancel |

Project Management Made Easy

Project Management Made Easy

What you need to know about… Project Management Made Easy! Project management consists of more than just a large building project and can encompass small projects as well. No matter what the size of your project, you need to have some sort of project management. How you manage your project has everything to do with its outcome.

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