Business Management Software and Cost Control

There are creative ways to use business management software to control costs. The most frequent use is leveraging the modules associated with resource tracking. As each resource has an associated cost by tracking resource usage we can effectively know the associated cost. In this traditional way resource costs can be viewed as they have been expended and with extrapolations it is easy to project future resource costs.

Tracking Costs with Business Management Software

There are, however, additional ways to use the software that allows for the tracking of other costs as well. We can, if we wish, track material and contracting costs in addition to resource costs. What follows are a few easy ways to use the software so these other costs are managed by the application.

If we have a resource loaded schedule, for example, we can do the following. For each contract we can add an activity representing the work of that contractor or firm. We than create a resource with the same name as the contract. The rate of pay of the resource, named after the contract, can be equal to the value of the contract. We can then, effectively, use the resource loaded schedule and the associated resource and cost modules to track contract costs.

New Resource Management and Business Management Software

Variations of the technique described above can be employed to expand the costs being tracked to include material expenditures. We could, for materials that will be used by specific individuals already loaded into the schedule, list that individual a second time but with a first name that corresponds to the material being used. For example, John Smith is the network engineer installing servers. The servers, which have a cost, can be shown as Servers- John Smith. The rate of pay, of this ‘new’ resource, should be equal to the cost of the Servers. In the Resource column, say for the activity of installing servers; list both names, John Smith and Servers- John Smith. When this activity is 100% completed both the resource cost and the material costs will also reflect 100%.

With the power of Earned Value Management we can evaluate progress and costs, using business management software as a source of solid intelligence. This information source will improve the quality of management decisions. The application allows for determinations based on accurate cost data.

Business management software can, if we use all of its capabilities, facilitate resource, contract and material cost management. This is why when your business is looking at business management software, you need to find one that is robust with features, provides a reasonable trial period in which to test the functionality and one that is not cost prohibitive. There is hardly an abundance of great software so dedicate at least two months’ time when locating new management software. The more time that you can allocate to the procurement phase for your software, the better the end results.