project management tools and techniques

Essential Management Skills required to become successful project managers

Managers are responsible for the achievement of various business goals and targets by successfully completing a range of business actions. The primary responsibility of the manager therefore includes taking things right and fulfilling goals. Every manager with a responsibility as started above must therefore use basic management skills to achieve the stated goals. Here in this article we will have a look at the key skills that are required by the project managers in all domain including the construction domain.

Key Responsibilities of a Manager

• Schedule work

• Set up the team

• Guide the team to do the job and

• Check the progress towards effective work completion.

A manager can widely classify his skills as hard skills and soft skills. Hard skills can involve skills such as planning, management, engineering and business skills, while soft skills are primarily interpersonal and human resources.

Some of the basic management skills that every manager needs to have.

1. Planning and management

It is very important to design all the facets of the work, including its content, the duration of the work and the need for resources. Planning will also include planning quality results, team members’ skills, other planning of the physical resources, risk planning, management planning for stakeholders and vendor management planning.

Planning will also include planning how progress can be monitored and controlled, and deploying various control tools, etc.

The resources to successfully execute the plan also need to be identified and organised.

2. Team making& Team Management

Successful management focuses on team management and team building. The best potential of each team member is to ensure that they do as well as the team works as a cohesive unit with tremendous respect and confidence, which is critical to their success.

3. Leadership

This involves the self-management as well as the management of others. This will include influence, motivation, management of conflicts, decision-making and efficient transfer skills.

4. Communication

It is of utmost importance to communicate with all interested parties effectively to ensure that the correct information reaches the right player at the right moment, using written, verbal and non-verbal communication skills. Communication manages smooth inter-member collaboration. Listening and questioning are part of the communication.

5. Solving Problems

The ability to critically examine the problems and to find solutions to the problems is important. The manager must be able to think conceptually and abstractly.

Conclusion

The management of people and processes is a science and an art that requires a combination of technology and experience. The article above is an introductory overview of the necessary and significant management skills.

In all the fields including the construction sector, the above skills are important. It is vital for the construction project managers to acquire the above skills and carry out their duties efficiently.

Project Cost Estimates and Cost Control

Major issues in cost management

Cost management remains the primary concern of all project managers. Once you know the magic tricks of cost management, success will kiss your feet. Cost management is an area where most project managers lag and hence incur losses in construction sectors. In this article, we will check out some of the major issues in cost management, which you need to overcome to succeed in your construction projects

Before digging deeper into the nitty-gritty, let’s clarify our basic understandings:

What is cost management?

Cost management is a process by which the project managers aim to minimize the costs of maximizing profits. This technique utilizes technology to measure costs and productivity. Cost management is a vast cycle that involves many steps, and the miss of any step can lead to a blunder. Wrong cost management can lead to reworks and multiple visions at the end moment. As when you realize that the youth project is going out of budget, you try to change a few things to meet up with the final budget. These changes can impact your entire project and design. Due to improper cost management, you may miss the deadline for project submission, and when the deadlines are missed, your clients can be dissatisfied. Improper cost management can affect your projects’ transparency and can impact your credibility to a significant extent. If, due to improper cost management, your costs increase in the future, it may make your client think that your costs are not transparent, and this way, they can develop a wrong perception about you.

Now that you know what cost management is and why it is important, you must identify the roadblocks go good cost management Lets check the issues related to cost management as described below:

Issues in cost management:

Forecasting failure:

Forecasting is the method of determining the probable cost that can be associated with the projects. This process aids in the decision-making process of the future. It is the base on which the project’s complete success can be dependent; hence, it is crucial to do this properly. Forecasting is dependent on facts; hence you must get your facts right before you commence your forecasting process. To do accurate forecasting, you must be aware of the cost involved in the project.

Let’s have a look at the common costs involved in the project.

Capital cost:This is the part of the cost involved inbuilt asset. This may refer to land or property acquisition, commissions, material cost, fixture cost, fittings cost, etc.

Operational cost: The costs involved in the day to day operations are called as the cost of the operation. This may refer to wages, utilities, maintenance costs, rent, sales, administrative expenses, etc.

Whole life cost: The costs associated with the building’s whole life are called whole life costs. Whole life cost will cover all costs from inception to construction.

Life cycle cost: the cost associated with operation and end of life costs are called as the life cycle costs

Hard cost and Soft cost: Hard costs refer to the costs that can be easily calculated like labor costs, materials cost, etc. Soft cost are the ones which is difficult to calculate, like advertising cost, taxation, etc.

Many times wrong forecasting has led to major disasters.

Whether you follow w the parametric estimation, bottom-up approach, or the three-point estimation in cost management, you can never succeed unless you do the forecasting right.

Failure to identify improvement poor unities: when you are handling a project, you must remember that everything is subjected to changes. Many times you will come across circumstances where you can get to lower the costs. For instance, you may get an instant discount while purchasing the product. You may find lower labour costs etc. you must always identify such pop [rotundities to reduce costs.

Failure of Value consideration from the beginning: value consideration is important for cost management, and you must do this from the beginning. Failure of value consideration can result in major disasters and can result in the projects’ cost to spike up.

Lack of motivation: When your employees are not aware of the cost plan, and they are not motivated enough, there can be an untimely surge in costs. Hence it would help if you kept your employees motivated. Display your cost plan in the dashboards to increase visibility to the employees. Once they are aware of the target, they will be motivated to reach their goal.

Incorrect decisions: Incorrect decisions can be a problem in cost management. As a result of pair decisions, the value of your projects can spike up. It would help if you made your decisions correctly. Make sure that you do intensive research and study the facts and figures before decreasing something.

Failure to follow the current trends and technologies: As a project manager, you must always be aware of the current trends and technologies to have the edge over your competitors. If you are not up to date, then you may lose out on some important clients. Technologies will make your work easy and will help you to do more in less time.

Failure to have correct facts and figures: the absence of correct facts and figures makes it difficult for you to do cost management. You must gather the progress report from various subcontractors. You must also collate these reports, attend analysis, and check the facts and figures to do efficient cost management. Accuracy of reports is also important for efficient cost management. You must double-check everything related to the facts and figures to ensure that everything is correct.

Failure of proper customer relationship management: Remember, the customer is always the king. If you sent play your cards right and fail to build a good relationship with your clients, you might fail to do cost management if your projects. Often the reports portrayed to the customer are used for cost management by the project managers. However, this is not the right approach of doing this and will no produce fruitful results.For an accurate forecast, you cannot depend on the report that you send to your clients.

Change control: If you cannot control change management, you will fail to do cost management properly. Construction projects will be full of changes, and some of them will be untimely, and hence you need to manage the changes efficiently if you want to do cost management effectively.

Remember, as a project manager, your duties will not be limited to ceiling the facts and figures, but what is more important is that you must study the reports well and analyze to bring our meaningful solution for reducing costs.

Cost overruns are a major challenge to the people involved in construction pro0jects. This increases the costs of the complexes and can also frustrate your buyers.

In some cases, the cost management profession is not understood well. Once the project manager’s roles and responsibilities are clearly understood, it would help in effective cost management.

Reasons why cost management is so important in construction projects:

• With effective cost management, you can do timely delivery of the projects to impress your clients and the other stakeholders. Thus, effective cost control increases your chances of winning new projects. When your client is happy with your5 work, they will give more projects to you in the future. Thus this way, effective cost management helps in enhancing your brand value.

• With cost control, you can get a good ROI on your projects. An economical construction will attract the buyers like warm of best, and a good cost management plan will ensure that you will get better retunes in the future.

• With effective cost management, you can lower your project’s cost, and hence, you will have more budgets for the other things. Investment in other Ares will enhance the quality of the projects to a considerable extent. Say you save one lakh rupees by doing effective cost management, now say you decide you want to increase your marketing fund as you could save money in the construction, you can easily do so.

• To doing cost control effectively, you can utilize the tools for cost control. Most of the time, the cost management software is integrated with the accounting program, which will help you do budgeting effectively.

• Additionally, you must always motivate your employees so that they do not deviate from the cost plans. It would help if you observed the things closely to avoid any misses. You can also take the help of automated reporting tools to avoid any mistakes.

• It would help if you made sincere efforts to assemble your team of professional individuals to achieve a common objective. Past planning creates the documentation properly and also gets it approved by the project owner.

Cost control is an important way of increasing your profits. It will help if you do the cost control effectively to get good value for investments. Hence do your cost management now in the construction projects and earn maximum profits. Your efforts and strategies will help you do cost management like a pro. You can take help of some good agency like Suvarna Consultancy to help you with the cost management of your project. They also have a software known as CCIS or Construction Cost Information system that will help you in streamlining the process of Cost Management for your construction project.

Project Cost Management

How do you manage project costs?

Managing the cost of the project effectively is a challenging task and may require a lot of skills. There is no silver bullet for effective cost management in the construction sector. In this article, we will have a look into some of the tips that will help you in efficient cost management in your construction projects.

What is project cost management?

Project cost management refers to the process followed by the project manager to plan and manage the project budget. This may involve the usage of technology to measure cost and productivity. The appropriate estimation, allocation and the control of costs determine the success of projects. Project cost management also involves the cost associated with procuring the projects related to project completion.

Let’s understand this through a simple concept: Your mother is getting older, and you decide that she must move into your house however you may not have ample space in your house, and hence you decide to build up a spare room for her. The first question that will cross your mind is, how much is this project going to cost? Well, this question can be answered through project cost management.

Now that you have a fair understanding of the definition, let’s look into why it is important.

Why is Project cost management important?

Project cost management is important to set a budget. Through project management, the project manager makes sure that the project cost remains within budget.

The project managers compare the original project cost status with the targeted project cost and use it as a baseline to determine the future course of the project plan. He may change or realign the project structures if needed so that he can meet up the cost target.

This comparison helps in determining the success of the project.

A project can be termed as successful if:

• The project follows the scope

• If the project completes within the deadline

• If the project is completed within the budget

• If the project completes within the stipulated time

Types of Project costs:

There are generally five types of the project cost

Fixed cost: The costs that generally remain fixed throughout the project lifecycle are termed as the fixed cost. Examples may include the salary of employees or licence cost.

Variable cost: Variable cost is the costs that vary. An example may include supply cost, labour cost etc.

Direct cost: The costs which are directly related to the project work are called as a direct cost.

Indirect cost: these costs are not associated with the work of your project but may be incurred during the business.

Sunk Cost: Sunk costs refer to the costs that have already been lost and they fail to produce any outcome

Total project cost: Total project cost is the summation of all the costs mentioned above.

Now that you know the basics let’s focus on the main aspect which is how to do cost management Project cost management consists of four important steps. Once you are familiar with the steps, you can do the cost management easily.

Let’s look into the four steps of cost management:

Project resource planning:

Through resource planning, you identify the resources that are required for the project execution. This can refer to people like employees and contractors and equipment like vehicles, tools tec.

Resource planning is done even before the project commences. To begin with, the project manager must know about the work break down structure (WBS). The WBS will have many subtasks. It is the job of the project manager to look into each subtask and check how many people, what skills or what equipment needed etc. to finish the project.

Cost estimation:

Cost estimation is the next important step. Here the project manager calculates the approximate cost, and he tries to quantify everything so that it can help him in the cost estimation process. This is an extremely difficult step and requires the project manager to know all nitty-gritty associated with the project. He must be aware of all costs, including the fixed cost variable cost sunken costs etc. The cost estimation process forms the baseline of the planning stage. In some scenarios, the project managers come up with multiple ways of executing a project, and the cost estimation acts as their guideline and help them to choose the right path.

Cost estimation methods are of the below types:

Parametric estimation: This estimation technique utilizes the historical data and is mostly accurate as trend analysis is also done in this process.

Bottom-up approach: This approach asks you to break down all the activities associated with the project. This is an accurate technique but is time consuming and may require a lot of budgets as well.

Three-point estimation: this is also known as the Program Evolution and Review Technique. Here you check all the possibilities, assumptions and uncertainties related to cost.

Cost budgeting:

Cost budgeting is more detailed as compared to the cost estimation. Here the project manager needs to fix a budget for each component involved in the project. This is an important step, and it determines the future cash flow of the project.

Cost control:

If there is any variance from the baseline, then cost control helps to correct the variance so that the cost can be aligned to the plans. This is a continuous process and must be done throughout the project lifecycle if the costs exceed the budget, then it is the job of the project manager to get the costs realigned to the budget.

Let’s look into some of the tips that will help you do cost management like a pro:

1. Consider utilizing project cost software: Project cost software aims in automating the calculation process, and hence manual errors can be prevented. Also, with the project cost software, you can have all the data at your fingertips and the dashboard will also help to portray the data and hence it acts as an efficient reporting tool. This software also helps in multicurrency cost management in case you are dealing with international clients. Hence these software’s facilitates benchmarking and standardization. To run a project smoothly, a cost manager must have the project cost management software.

2. Set up the project budget from the beginning: Once you have the budget ready from the beginning, then you know what to spend and where. After doing the cost budgeting, the project manager needs to get it approved as well.

3. Monitor the project budget now and then: It is important to set up the budget properly; however, it is also important to check from time to time and ensure if everything is happening per plan. If at any point you notice any variance of the cost during implementation, then you must make needful alterations so that you can stick to your budget. You may consider displaying the budget in the dashboards so that everyone is aligned and does not exceed the budget. You may also consider having regular meetups with your team to understand the challenges and constraints. It would help if you did not stop inspecting at any time. Timely inspections and supervision can prevent budget overruns.

4. Have the facts and figures in your fingertips: It is important to have the reports handy when you want to do successful cost estimation. The reports should be detailed and should have a visual representation of the facts and figures so that everyone can understand it easily. This will act as a motivation factor as your team members will know about their strengths and weaknesses as far as the project is concerned. Hence they will take the necessary steps to do better.

5. Look out for the problematic spots and find a quick fix: For doing successful cost management, you must be aware of the problematic zones that can lead to overruns. It would help if you made a sincere effort to control them from the beginning. For instance, one of the major problems on most construction sites is the large amount of materials wastage due to varying circumstances. Wastage of materials can usually happen during the procurement process, storage, and during utilisation. This can happen due to the buying materials of wrong specifications, buying more than what is required and in some cases, due to some unplanned and unrealistic circumstances. Wastage of materials also happens during transportation. So if you monitor this from the beginning, you can take the necessary steps to prevent wastage. You need to be proactive and neglect careless attitudes. Also, pay importance to the appropriate storage of materials. The relationship between time and cost is an important aspect in the control of costs on-site as any variation in time will have an automatic implication on cost.

Cost management is a continuous process and is important throughout the life cycle of the project. This may require you to pour your blood sweat and tears, but the result will be highly motivating. Successful cost management will improve the prospect of the project, and you can expect a better ROI through a proper cost management mechanism. Hence follow the steps mentioned above to do project cost management like a pro and expect rewarding results that will be valuable for a lifetime.