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For Construction Project Managers

Posted: Mon 03 Feb 2014 5:47 pm
by bigboss
Identify and justify 5 different remedial measures that you can take as a project manager in the circumstances that your project was subject to a budget reduction of up to 10-15% four months into the implementation of 18 months project.

Looking forward for your answers.

Re: For Construction Project Managers

Posted: Wed 05 Feb 2014 2:40 pm
by dhaughey
Budget cuts are never easy, but not uncommon. First, make sure the customer knows the effect of the budget cut. Often they are not aware of the impact it will have on the project, or expect the project manager to sort it out.

If the cut is unavoidable, here are a few things for you to consider when having your budget cut unexpectedly:

1. Reduce the scope of the project
It will depend on the type of project whether this is possible. What can you cut from the project, while still remaining viable? For example, you may be able to use lower quality fixtures and fittings. Find out what is acceptable to your customer and agree a reduction in scope.

2. Reduce your costs
What costs can you cut using cheaper suppliers? Some areas to consider are transport costs, plant hire, material costs and casual labour.

3. Use fewer people and extend the deadline
Can you cut the number of people on the project and extend the deadline to lower your costs? 

4. Use your contingency
If wise you will have included some contingency cost in your original budget. It is quite usual for a 10% contingency to be included to cover risk and uncertainty.

5. Do unpaid overtime
You may be able to persuade your team to carry out some unpaid overtime. This should be used as a last resort. Goodwill only stretches so far.

Whatever you decide, you will need to use strict budgetary controls to make sure you stay on budget.

I'm interested to know what you decide and how it turns out for you.


Re: For Construction Project Managers

Posted: Thu 06 Feb 2014 11:53 am
by bigboss
Thanks for the reply, it was really helpful. I know it's a very challenging situation, but it needs to be faced. I want to see what do people think.

Anyone else has any more ideas?

Re: For Construction Project Managers

Posted: Thu 06 Feb 2014 12:03 pm
by bigboss
That was really helpful. Thanks.

Any more thoughts??