12.04.2024
One of the main characteristics of companies providing electronics contract development services is the duration of projects, often spanning six months or more. Achieving positive financial results, both per project and company-wide, necessitates comprehensive project budget management and ongoing assessment of financial performance at every stage. To achieve this, NOCTAVIS implements transparent project management reporting, enabling informed decision-making by managerial and technical teams throughout the project lifecycle. Early risk identification and intervention are key benefits, helping to mitigate budget overruns and maintain project integrity.
Initially, specialists at NOCTAVIS estimate project costs based on information provided by the client and technical research on potential solutions and technologies. The project budget evolves during this process, culminating in a finalized budget upon agreement with the client and contract signing. Given the unique nature of each project, cost tracking occurs on a project-by-project basis, with expenses categorized into direct and indirect costs. Direct costs, forming the project's cost base, include commercial expenses and specialist salaries directly associated with project execution.
Commercial expenses encompass pre-project activities such as client visits and representation costs. If a contract isn't secured, these expenses are treated as indirect costs. Specialist salaries, constituting a significant portion of direct costs, are allocated based on actual time worked on the project. This precise allocation, facilitated by NOCTAVIS's time tracking system, enables both profitability monitoring and project progress tracking, crucial for effective project management and budget control.
Prototype Devices and Development Boards
During the conceptual design stage, prototypes of the product or specific modules are created for debugging and testing purposes to verify the feasibility of technical solutions. Development boards are categorized into specialized and multifunctional boards. Specialized boards fulfill specific functions within a project, with their costs fully integrated into the project's budget. Conversely, multifunctional boards serve multiple projects, contributing partially to project costs based on their usage time.
Production of Pilot Samples
The quantity of pilot samples is determined by the technical specifications of each project. Additional units are produced to account for unforeseen circumstances such as equipment failures during testing, damages from measurements, or manufacturing losses. Pilot sample production requires the acquisition and manufacturing of additional components for timely replacement of defective samples. Necessary technological fixtures include stencils for automated printed circuit board assembly lines, cutting dies, molds, and other auxiliary fixtures. Typically, these fixtures are used once and then written off after project completion due to their unique nature.
In addition to direct costs, indirect expenses arise in companies providing electronics contract development services (e.g., rent, utilities, marketing, administrative salaries), posing challenges in their allocation across projects. Various approaches exist to address this, including separate budgeting for overhead expenses, using distribution coefficients, determining compensation rates for key personnel considering overhead costs, or allocating expenses proportional to the engineering staff's salaries across projects.
Timely generation of project management reports at NOCTAVIS, a company specializing in electronics contract development, offers several advantages:
- Access to up-to-date information for informed decision-making.
- Transparency for clients regarding project finances.
- Regular analysis of plan versus actual deviations to ensure adherence to project budgets.
- Forecasting revenues and expenses based on project needs.
- Ensuring profitability across projects of varying durations, maintaining planned financial outcomes from project inception.
