KISS Project Budgeting That Gets Straight To The Point
Summary: key insights and a free template to help small seo agencies manage internal and outsourced projects costs and actually MAKE MONEY.
We have all experienced it…It’s the 12th hour, the team has wrapped up the final touches to a project as it has come to a close. Deliverables are complete, milestones have been met, your internal “metrics of success” (as I like to call them) report great progress. The final product has been delivered and the client is ecstatic. High fives and Happy Hours are in order.
All is good.
That is… until you receive a call from your boss who has just reviewed the profitability of the project and it’s over budget by double digits, multiple times over.
The dreaded cost overruns.
They are the cause of sleepless nights for professional project managers (PMs) that take their job seriously. PMs know that uncontrollable costs kill the success of any project and there are numerous reasons for them. I have seen all kinds in my experience; Poorly prepared estimates, scope creep, poor tracking of the progression of the project, poor quality control measures, and the list goes on and on….
With the onslaught of tools available from the “All Powerful” Microsoft Project (can you hear the deep voice and cranked up the reverb) to the simplistic easy-to-use, “Get the job done” Basecamp and everything else in between…you would think that you have all you need to get the job done right, on-time, and under budget. Well, not really.
Though we are not absolutely perfect in keeping every single project under or on budget, we have seen dramatic improvements by focusing on two key areas:
- Real time tracking and reporting of all tasks being performed
- Clear communication with all departments on costs being incurred
My ultimate goal was to be able to communicate to our PMs and their teams on a weekly basis a ridiculously simple report that would provide them a quick snapshot of how they were utilizing the budget. I worked with my managers to design a simple report that would work for both our front line managers and upper management. We went through multiple designs that were just too complicated and would exhaust too much time to prepare. But we were determined to get it just right for our needs.
We focused on reporting four main areas in one simple and clean report.
1-What tasks were performed
2-Which team member worked on the task
3-The time spent on the tasks
Our goal was to simply communicate to the project managers where their teams were regarding the project budget on a weekly basis. Since we have projects that run anywhere from 3 to 12 months, the teams wanted to know exactly where they were from a budgeting perspective at the start of the week so they could plan accordingly. This would avoid any surprises. If we were going over budget, we had a clear understanding as to the root cause well in advance of project completion.
The goal was to keep it simple yet empowering for our teams to perform. Let’s face it; Web Development and Finance do not speak the same language. But when the two take the time to break bread together, regularly, they’re bound to have less “Come to Jesus” moments with upper management.
So how do we do it?
We use internal time-tracking software to track every individual task each team member is working on. Each team member has a unique login. As they go through their work day, the team member selects the project & task they are working on and provides a brief description of what they are doing. The software will track their time spent on the individual project & task and calculate the cost incurred on the project.
Each week, I’m able to download a simple .csv file and open it in Excel and Voila…I have a simple, clean easy to understand report.