How A Lack of Insight Into Time Tracking Maxes Out Your Project Budgets

“We’re over budget.”

If you just felt your stomach give a familiar flip-flop, you’re in expensive company. Cost overruns are a way of life when it comes to project management, and most project teams have certainly found themselves on the wrong end of a set budget. That’s normal.

But the price for constantly going over budget is steep — both literally and figuratively. Sooner rather than later, these bad habits are going to start affecting your bottom line. Taking the time to identify the reasons your employees keep maxing out project budgets is the first step in realigning your organization’s project budget management for success.

Let’s take a look at some of the most common explanations for cost overruns.

Mismanaged Scope

The scope lays the foundation for a successful project and promotes accountability on all sides by defining the deliverables, constraints, and touchstones for stakeholder and client approval. As the road map for a project, the scope must rely on historical information to facilitate planning and decision-making while being flexible enough to adapt as new information emerges.

Although the scope should expect to accommodate some changes, there is such a thing as too many and too often. This can lead to the dreaded “scope creep” — when modifications, requirements, and requests outside of the original plan continue unabated. Unexpected costs can easily add up, decisions may need to be reversed, and resources will struggle to keep up with the abrupt twists and turns in process, schedule, and budget. Setting the right expectations from the outset is a critical part of effective project scope management and provides project teams with a reliable reference for cost estimations and other anticipated finances.

Ineffective Communication

Winning the bid can be grueling work, but sit tight because now the real work begins. Your organization relies on accurate metrics and streamlined processes to inform the next steps, but they don’t exist in a vacuum. Behind every metric is a story, and project managers must also understand the what, why, and how for each one. This is not a one-person job, however. The cooperation of finance, sales, operations, and other teams both within and outside of the organization will be critical in maintaining consistent data and ensuring the client doesn’t get any unwelcome surprises down the road.

Conscious and deliberate communication and cooperation efforts can enable collaboration and reduce project manager migraines by offering accessible project budgeting documentation, flexible billing and costing plans, comprehensive contract modeling, and easily monitored process adherence.

Missing the Right Resources

Even with the best communication, a successful project still needs the right people for the job. Maintaining an up-to-date skills, experience, and certification database will be indispensable when designating who has the right expertise. Project managers should also be asking: Where is this resource? What is their rate? Are they available? Missing the answers to any one of these questions can easily provoke a domino effect of confusion if you’re not careful. If their rates are too high or teams have to scramble to replace someone going on vacation, a project’s ability to be on time and on budget can be threatened.

Assigning the right resources at the right time can be a major challenge without an effective resource management process in place. Ensure your resources are available to support project goals, and clearly identify team members to help set expectations.

Lack of Real-Time Insights

Without real-time visibility into the work being done, critical decision-making grinds to a halt. Reporting and subsequent analytics have to work that much harder to distill useful data for interpretation. For example: Are time and expenses being tracked? Can they be easily submitted remotely or during off-peak hours? Projects happen in real time and keeping pace with clients, billing, and time should be no different. Organizations that fail to be mobile-ready and keep resources and managers informed with notifications and alerts ultimately leave the project in a sticky situation.

Staying within budget is significantly easier when employees can capture time and expense information anywhere and any time. Today, solutions offering native mobile app capabilities are a necessity when it comes to enabling employees to improve expense accuracy, eliminate submission and approval delays, and keep everyone on the same page regarding costs.

Not Relying on a Single Source of Truth

Amidst all the discussion around cost estimation and budgeting in project management, it’s important to recognize that tracking business metrics is actually part of a larger framework that requires coherence. Time is the unifying factor here, as it directly impacts all metrics and provides valuable insight into work being done. Not having a single source of truth for time can quickly result in maxing out your project budgets.

Visibility into every minute of resource time can give the project manager a sense of what work remains, how much time is estimated to completion, and whether any potential roadblocks could cause a disruption. With everyone on the same page, stakeholders such as supervisors, project managers, clients, and others can be included in the approval chain.

Dwindling Productivity

With resources as the largest operating expense for most project-based organizations, you don’t want to be left guessing the details about this particular cash outflow. Do resources know what projects they have been allocated to? Can they easily find out? Are they aware of what work they must complete and how much time they have? Underutilized resources cost the same as busy ones, while overburdened team members grow increasingly frustrated and threaten the quality of service.

By analyzing historical data, businesses can anticipate seasonal downtrends in productivity, identify tendencies in employee absenteeism, and take proactive steps ahead of time. Managing allocation with key metrics will set the stage for success and avoid hasty reassignments in case of unavailable team members.

Failing to Learn from Mistakes

Mistakes happen, and it’s not defeatist to admit that there’s always next time. As a business leader, it’s important to take note of these mistakes to better prepare your business for when the same issues inevitably reappear. If you don’t, you might as well call it quits from the outset.

To truly enable effective project budget management, ground all critical decisions in experience and reality. Yes, some projects will go over budget, but it doesn’t need to be the norm. Equipping your organization with the right solution for your unique requirements will ultimately lay the foundation for a streamlined workflow, smarter budgeting, and, most importantly, happy customers.

Learn why global businesses trust Replicon’s project time tracking suite to help manage project budgets and hours:

Case Studies →

Sara Longini
Sara Longini
Sara works in Content Marketing and Social Media at Replicon. Replicon provides award-winning products that make it easy to manage your workforce. With complete solution sets for client billing, project costing, and time and attendance management, Replicon enables the capture, administration, and optimization of your most underutilized and important asset: time.
Get started today.
Set up a free trial based on your business needs. Start Free Trial

New Feature: Use SmartBudget to Improve Project Pricing and Revenue for Your Business

Preparing project budgets is perhaps one of the most challenging parts of project management, especially for bigger and more complex projects. With budgets getting tighter, managers need smarter ways to…Read More

Global Compliance Desk – South Korea

South Korea Amendments to Equal Employment Opportunity and Work-Family Balance Assistance Act (EEA) and Labor Standards Act On 2 August 2019, the Korean National Assembly passed amendments to the Equal…Read More

Webinar Recap: New Ways to Manage Work-from-home Employees

When the pandemic pushed the majority of employees to work from home, business leaders and project managers came under mounting pressure to run operations, projects, and resources remotely. The rise…Read More

Consulting firms: 4 ways to improve billing & get paid on time

At the end of the day, your consulting firm relies on the assumption that a good percentage of clients will honor their payments promptly and accurately. In the professional services…Read More

5 Ways to Improve Service Delivery in Your Organization

In a highly competitive market, service-based businesses need to capitalize on any opportunity to set themselves apart from their (often very similar) competitors. While implementation, system details, and service management…Read More

Demystifying the millennial workforce: 5 tips from Trunk Club’s Andrew Anderson Devine

Time magazine labels the millennial generation the “most threatening and exciting generation,” infamous for “narcissism [and] its effect: entitlement.” In the workplace, the perception of the millennial workforce is no…Read More
  • Polaris
  • Time & Project Insights
  • Time & Projects Solutions
  • Replicon Products
  • Replicon Users
  • Cloud
  • Corporate
  • Professional Services Management
  • Shared Services Management
  • Time and Attendance Management
  • Customer Feature
  • Time Intelligence
  • Industry News
  • Global Compliance Updates