Years ago a manager could look at a projects negative profit margin with the attitude, ‘don’t worry we’ll make it back on the next project’, but this no longer has a place in today’s competitive market.
Australian resource projects worth $150bn were cancelled or delayed in 2012/2013 as company’s scaled back expansion plans to focus on reducing overheads and improving productivity, according to official data from the Government’s commodities forecaster*. These changes in the market, demonstrate that you can no longer rely upon the ‘we’ll make money with the next project’ since that ‘next’ project may not come.
As a result, you need to have a greater understanding of what your projects cost, know where they are against their budget – are they profitable or not? You want to not only monitor your budgeted costs along the way to ensure that the project is done at or under the projected cost, so you make money for the business, but make sure your project is delivered on time in order to meet the client’s expectations. What tools do you use currently use to monitor projects, please comment below.
Find out 5 Ways to Make Planning Projects Less Painful with the third webinar with the author Brian LaMee, Project-Based ERP for Dummies. In this webinar Brian shares tips and suggestions to plan and schedule your projects and resources to ensure fewer headaches and learn how using an ERP system purpose-built for project-based businesses can help you. Find out more.
*Bureau for Energy and Resource Economics (BREE), 2013