It’s a menace to every project: scope creep. According to a PMI survey, 40 percent of companies experience scope creep. They waste 25 percent of their investments due to underperforming projects.
This is why nailing down budget and resources is key. With a clear project budget, teams know exactly what funds they need to complete a project within the defined scope, time, and quality parameters. When teams manage resources wisely, they keep budgets on track.
The real magic happens when an organization can manage a project’s budget and resources while meeting all the project goals. Teams get their work done in a way that boosts operations, fuels growth, and simplifies decision-making.
But how do you make the magic happen and strike the right balance of budgeting and resource allocation?
It starts with the right tools and technologies. Resource management solutions help teams plan, allocate, and manage their project resources no matter their industry. Teams can increase productivity, prevent bottlenecks and resource management problems, and improve operational efficiency, all in one place.
The Importance of Effective Resource Allocation
Say you’re a construction project manager and you underestimate the materials needed to complete a project. With the material shortage, there’s now a two-week delay, impacting contractor availability and causing a budget overrun. One miscalculation of project resources can derail an entire budget and project timeline.
Precise resource allocation improves project outcomes, cost savings, and organizational efficiency. When project managers can accurately estimate costs and determine the right mix of resources including materials, equipment, and labor, they can better manage budgets. Resource allocation plays a critical role in budget estimation and making sure teams can complete projects on time.
But you can’t always plan for everything. Sometimes unforeseen events and disruptions throw projects off course. Precise resource allocation can also help project managers mitigate risks. By identifying critical resources and allocating backups or contingency plans, organizations have a plan B when plans go awry.
Strategies for Efficient Budgeting
Sometimes it feels like creating a budget is akin to throwing darts blindfolded. However, you don’t have to have a crystal ball to build a solid budget that has a positive impact on your bottom line.
Here are a few strategies you can use to optimize your budgeting process:
1. Expect change.
When budgeting, a pencil is your best friend. Amid inflation, supply chain challenges, and fluctuations in the market over the past few years, companies have learned to hold their budgets loosely. Even though you can’t predict change, you can still plan for it. Unforeseen corporate expenses should be factored into your budget.
2. Budget for your organization.
Each industry and organization has its unique risks. If uncontrollable factors like the weather drive your business, you’ll need to include that in your budget for your most unpredictable quarters. If you work in manufacturing, you may need to account for supply chain disruptions. For heavily regulated industries like the government, your budget should include potential regulatory changes.
3. Connect your data.
During budgeting season, disparate and disconnected data can be a massive hassle. It’s important to help organizations understand what drives performance and what’s contributed to growth and success previously. When your data feeds into, you can create a more strategic, informed budget.
4. Share your budget with the right people.
Budgeting shouldn’t happen in a silo. But within many organizations, the budget is cloaked in secrecy. While there’s certain financial information that should be kept confidential, shared budgets can create greater transparency and increase feedback in your organization. Your teams will also be able to provide valuable information to help you determine where resources should be allocated.
5. Lean on technology to track your budget.
Once you’ve created your budget, resource management software can help you track it. With the right solution, you can monitor your expenses, income, and project profits in real time. It’s great for making sure projects stay within budget limits, making informed decisions based on spending, and adjusting resources as needed to stay on track.
Best of all, your resource management software often pays for itself over time. For example, Quickbase enables a 315 percent, three-year ROI and a payback period of less than six months. When you consider the costs you’re saving by planning and managing your budget, the investment is a drop in the bucket.
Tools and Technologies for Resource Management
Budgeting doesn’t have to be your most hated task. Tools designed for budgeting and resource allocation can help you work smarter, not harder. With Quickbase’s no-code platform, you can better manage your budget with end-to-end visibility and intelligent AI capabilities. It enables you to create and customize enterprise applications designed specifically for budget and resource management.
When teams have access to accurate financial information, they can take control of every dollar. Quickbase provides real-time access so stakeholders can always see the data they need to make informed decisions. With greater visibility, you’ll be able to make critical adjustments to keep projects on time and within budget.
Success Stories
Diversakore, a structural framing systems and services company, needed a better way to estimate project costs. They’d been previously using spreadsheets and were unable to compare estimates against historical data. Diversakore also needed a way to collaborate and share information with external stakeholders.
The company began using an estimation app built with Quickbase, which enabled Diversakore to identify new opportunities for value engineering. Using the cloud-based system, Diversakore manages and tracks all estimate information, providing summary reports to stakeholders. Since implementing Quickbase, Diversakore has reduced the time it takes to create estimates by 50 percent, and the company delivers more cost savings to its customers.
OMS Photo, a commercial photography studio, also struggled to track day-to-day expenses and match them to specific jobs. The photography studio was using disparate systems for accounting and job management, so they didn’t have a way to track real-time job expenses. Without being able to compare expenses to budgets, OMS Photo didn’t have a clear picture of profitability.
With Quickbase Sync for Cloud Apps, OMS Photo built automated connections between their systems to drive fast, accurate reporting in Quickbase. The company can now accurately view job costs and profitability and better manage cash flow.
Best Practices for Budget Optimization and Resource Allocation
In dynamic work environments, adaptable and flexible software solutions are critical. As your business evolves, you need a solution that can adapt just as quickly.
Here are a few best practices that will help you take control of your budget and manage resources within a dynamic environment:
Understand your resource constraints. When you know what resources are regularly in short supply, you can plan around their availability to prevent bottlenecks and delays.
Make continuous adjustments and optimizations. Regularly monitor and analyze resource allocation data so you can adjust and optimize your strategies based on feedback and data insights.
Automate data collection. By automating your data collection processes, you reduce manual effort and human error in monitoring resource allocation.
Communicate regularly. Keep stakeholders in the loop with transparent communication and regular updates on resource allocation and changes that may impact the budget.
Take control of non-billable time. To understand your organization’s resource management, you also have to know where resources are spending their time. If you want to optimize resource allocation and utilization, you have to make sure your teams are spending their time on the right duties to deliver maximum value.
Future Trends in Budgeting and Resource Allocation
Over the past several years, budgeting and resource allocation have evolved significantly. Companies have been riding the waves of the global market while also pivoting towards technology investments and value creation. Technology is a strategic force for driving new business models and capitalizing on innovation.
AI and machine learning are two trends that continue to gain steam and revolutionize business. When it comes to resource management, AI and ML have the potential to save time and eliminate busy work. Companies that can leverage AI-driven analytics will have the power to make more informed decisions based on a comprehensive understanding of their operations.
Another trend you can expect to see is collaborative budgeting. While budgets have traditionally been siloed by departments and teams, collaborative budgeting brings more voices to the table. A more inclusive budgeting process where various stakeholders can contribute will allow organizations to better align their financial goals with their organizational objectives.
As budgeting and resource allocation shift, companies will need software solutions that keep pace with these changes. Solutions with progressive capabilities like AI and dynamic customization will give companies more valuable insights about their businesses, enabling them to cut costs and maximize profits.
Conclusion
Businesses that leverage technology solutions to optimize resources and improve budgeting save themselves countless headaches. They take the guesswork out of their financial health assessments and make better decisions with the right data. Plus, they can monitor financial trends using real-time, accurate data and avoid the pitfalls of relying on past insights to drive future growth.
Quckbase simplifies budgeting and resource allocation. With no coding, you can easily create, connect, and customize enterprise applications that allow for greater visibility and tracking. Plus, it’s customizable to your business needs.
If you’re ready to see how Quickbase can help with budget resource allocation, reach out and request a free 30-day trial!
