9.6 Things Can Look Odd Under the Budgetary Microscope

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9.6 Things Can Look Odd Under the Budgetary Microscope

When you review budgets, take the time to investigate the detail. I once saw a line item for $2 million with a description I could not decipher. I ended up deciding it was probably either a very wild guess or a boondoggle. It turned out to be a little of both. Project dollars are used for many things, sometimes even for the project itself. Functional managers, who generally serve as project team leads as well, fight to grow and maintain head count because that is what they do for a living. Project dollars are very helpful in resource intensive environments and can be used to improve shortfalls in the (BAU) environment with varying impact on project activities.

Perhaps this should be put bluntly. On big projects, team leads deliberately pad some labor cost estimates, with the intent of addressing resource issues internal to their team that do not necessarily map to project activities. This happens with hardware, software, and training budget line items as well. No sane project manager would completely reject any such efforts at creative funding by key team leads; but there must be some sort of quid pro quo for the winking and head turning this sort of transaction requires on your part, or you end up getting little in return for your largess.

Another potential area for examination is hard to give a title to because the one I would like to use, "operational considerations," is somewhat misleading. Normally, a project is not based solely on postimplementation costs, but you cannot assume that the designers have acted in a financially responsible manner in this area. I had a situation where the engineers specified a pair of storage area network (SAN) devices. A SAN is a high-capacity disk storage device that multiple computing platforms can use to manage data. It is extremely expensive, or at least so it appeared to be in the context of this particular project. Quite frankly, it was difficult to understand the justification for that expense. Then again, I was not the final decision maker.

Anyway, during the process of trying to understand the proposed design, a heretofore-undisclosed design element came to light. It was a special network connection between two sites so that the data on one SAN could be automatically replicated to the SAN at the other location. It was further ascertained that the operational cost of this connection would be nearly $60,000 a month. Not even in my wildest moments could I justify such an expense, particularly given the intended use for the SAN, which as I said was somewhat dubious from the beginning. Although it is not a project consideration per se, it made no practical sense to do this, so we had the design changed. Intersite connectivity was achieved another way. That slightly increased project cost but leveraged the existing WAN infrastructure for free, resulting in a significant net savings to the corporation once monthly operational costs were included in the mix. The SANs remained in the design, but the questionable level of investment was diminished, from an operational standpoint, by $700,000 a year!



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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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