9.12 Overruns

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9.12 Overruns

This is something you need to be monitoring in real time. Know your budget and track against it, or be in constant touch with the people in accounting or procurement who perform that service. On a large project, there will be plenty of give and take. For instance, we budgeted millions for a rollout component that cost 15 percent less a year later when we actually made the buy. In that same project, we abandoned a new technology after it was deemed unstable, but significant monies were spent before we pulled the plug. So, our savings in the first instance were essentially negated by the loss in the latter.

  • Cover yourself on overruns. If you budget $X for a project deliverable and learn the procurement cost is significantly higher, get everyone to sign off on the delta prior to executing the purchase order. Document the reasons for the increased cost as part of the sign-off.

  • Socialize your savings. Do not do this in a self-promoting way but simply to get a check mark on the debit side of the ledger. If your project is large enough, there will be offsetting losses soon enough, so any significant savings deserves visibility.

  • Challenge costs. Vendors as well as internal service organizations want and need your project dollars. Some vendors will take you for a ride if you let them. As a general rule, treat project dollars like they are your own personal funds. More discrepancies come from honest mistakes than fraud, but either cause is more common in the workplace than most people care to acknowledge.

  • Spend wisely. Throwing money at problems without adequate analysis and control is shortsighted and possibly dangerous. At the other extreme, being penny-wise and pound-foolish can be harmful as well.



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Complex IT project management(c) 16 steps to success
Complex IT Project Management: 16 Steps to Success
ISBN: 0849319323
EAN: 2147483647
Year: 2004
Pages: 231
Authors: Peter Schulte

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