Archival projects have a range of costs to contemplate; for example, those that are direct and those that are indirect, those that are labor-related, and those paid to vendors or subcontractors for parts or services. Please read on for definitions and tactics to manage all these types of archival project expenditures.
Project costs are either direct or indirect. Direct costs are expenditures benefiting, and associated with, specific projects. Direct costs may also be allocated direct costs, which support the research, design, development, or production needed to accomplish project requirements. Indirect costs are those that, under standard requirements for expenditures, don’t directly contribute to the accomplishment of project requirements. Indirect costs are sometimes referred to as “overload”.
Labor or Non-Labor Costs
Costs also may be classified as labor or non-labor. Labor costs are those paid to employees, expressed in hours, to which direct labor rates are applied to get dollar values. Non-labor costs are those paid to vendors or subcontractors for purchased parts or services.
When an archival project begins, consider the consequences of redirecting staff from their regular work to the project. Discuss assumptions about staff availability an early stage—because it influences costs. Assumptions about the percentage of time staff members may be asked to work on projects can also be an issue. Project work costs may be concealed in the budget because work is only partially devoted to projects.
Balancing Workloads
Reviewing workload allocations ensures that staff members are treated fairly when they’re asked to work on projects— while still delivering their usual outcomes. When several managers share claims on a staff member’s time, there can be unrealistic pressure to achieve the same performance levels in different areas of work, unless there is a mechanism for overseeing the individual’s workload. Staff members can also be at risk when performance expectations are raised without additional support and resources; unfortunately, this is common in the archives field.
Sometimes, it’s less costly to hire staff specifically for a project than to redeploy existing staff, especially if current staff require training and skill-building. If training existing staff is preferred, costs and staffing associated with training are another element to incorporate into the project plan.
Tracking Staff Time
Another variable that affects costs is your organization’s model for tracking staff time. Some organizations, like consulting companies, record staff time carefully by using a profit and loss model and billing by the hour. You may be asked to track staff time against your project and your team members’ tasks. However, archives usually consider internal staff to be a fundamental cost of doing business and may avoid tracking staff time against individual projects.
You may be asked only to track external resource costs like those related to contractors. However, even if it’s optional, tracking people’s hours helps you validate current estimates and produce new, more accurate ones. It can help you understand how much money and time is spent producing your deliverables. Additionally, if your project is a substantial part of someone else’s budget, senior executives are likely to want budget details.
Sometimes costs are hidden. Some might suggest that a project that doesn’t require additional staff members doesn’t have staffing expenditures; however, this is a false argument because employees have job descriptions and agreed areas of work. If they are asked to do something different from what they would typically do, this represents a cost because you’re employing the staff to accomplish different work. In some circumstances, this is acceptable. In others, it might indicate that workloads are unmonitored.
Adding Contingency
Project managers should avoid including extra or inflated costs in their budgets. A better way to budget is to use contingency funds instead. It makes sense to add a contingency element to early cost estimates. As each stage passes, it’s possible to reduce the contingency, accounting for what has been learned during the project’s progress and the reduced risks that remain. Thus, the contingency element is assessed without becoming a fund used for rescuing a troubled project.
The blog was originally published on Lucidea's blog.
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