March 18, 2014

How Project Management Software Keeps You Under Budget

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Most managers know that estimating the return on investment of a project will help determine whether it’s a worthy investment or a waste of resources. However, unforeseen obstacles can disrupt these projections, and are surprisingly common, according to a recent study. The average large IT undertaking (according to a survey of 5,400 projects) exceeds its proposed budget by 46% and takes 7% longer than predicted. Even worse, the completed projects deliver 56% less value than expected. Though most companies can survive a bad IT project, a significant amount – 17% to be exact – find themselves on the brink of closing due to wasted resources.

While these numbers refer only to IT projects with starting budgets of at least $15 million, they still speak to common problems that most companies face: how to keep projects on time, under budget, and effective. To find a solution, we must first understand the problem.

Why Projects Fail

Projects are now more complex and incorporate a greater number of departments and employees than ever before. While market-specific problems may vary, several trends can be found across verticals.

Lack of Measurement

With the rise of data analysis, it’s important to have measurable tasks and goals. If managers can’t understand progress in numerical terms, it makes it difficult to understand how each aspect of the project is progressing. When the project starts missing deadlines or requiring more resources than originally planned, it falls on the manager to explain why. If he hasn’t been measuring the progress of the project effectively, this can be difficult to impossible.

A Lack of Adaptability

It goes without saying that having a plan in place is important, and that sticking to the plan is crucial. However, as new insights emerge, project managers will need to reexamine their goals. A little bit of reflection goes along way. Earlier timeline decisions may seem overly optimistic (or too cautious), or part of the project may require extra resources. Being too rigid doesn’t allow for the necessary adjustments that complex projects require.

Failing to Make the Project Connect

To truly commit to a project, employees need to understand how it affects their department, and how it affects their job. Failing to effectively articulate the connections each department and each employee has to an assigned project will lead to future confusion and a lack of commitment to project goals.

Project Management Software Can Help

Choosing the appropriate project management software can help you avoid ending up with over-budget and under-performing projects.

PM software can track the time each employee spends on each task. Managers can then analyze this data to discover how each person’s contributions help, or hold back, the project. This can also help establish key performance indicators for employees. Eventually, mangers can determine the relative value of each task, compared with the time required to complete it.

While PM software is often used to map out projects, it can also be used for feedback. Users can make notes or leave comments about certain tasks, which in turn help prioritize future assignments. If an employee in one department notices an obvious flaw in her workflow, she can make a note in the PM software for her manager to review. Once it’s reviewed, they can change the process and eliminate wasted resources.

PM software also creates connections between departments, and spurs collaboration through document sharing. Once employees from different departments get in sync, they’ll be much better at pacing one another’s workflow and producing better work more quickly.

It’s almost a guarantee that complex projects will run into hurdles, but PM software helps provide a strong infrastructure so that companies can easily adapt to unforeseen circumstances.