Budgeting and Cost Management: Why is it a Challenge?

Budgeting and Cost Management: Why is it a Challenge?

Budgeting and Cost Management: Why is it a Challenge?
? Budgeting and Cost Management: Why is it a Challenge
 

 
 
 
 
 
 
** Change is inevitable ** Team it up & progress **  Scoping & Change management is a continuous process and is an integral part to any project. With right approach & having good quality control measures in place... we can turn around any crisis situation in a project.  When proposing a budget; typically, Project managers account for design and build efforts & infrastructure costs without validating the assumptions & other indirect expenses. 
A seasoned project manager takes into account all the aspects before arriving at the numbers.  Here are few typical examples where estimations could go wrong resulting in huge budget variations:  
1. It is important for Business Analysts, Architects & Project Managers to connect early & come up with right set of assumptions, add caveats which would help in evaluating the initial plans, team structure & budget at regular intervals. This additional effort should be budgeted 
 
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2. Functional requirements & especially non-functional requirements aren’t thought through or re-validated while the project is progressing and the effort shoots up when it comes to integration testing, operational testing or when performance testing happens  
3. Another biggest challenge is the mapping specifications when Integration & Business transformations are involved. Consider the case of data migration or version upgrade projects; or for projects where there are two or more end systems are connected through an Integration layer; we could see cases where Mapping Specifications are done at high level however the data dictionary takes a back seat. Ambiguity leads to defects & it becomes a challenge for developers to visualize the actual requirement or validate & raise the right questions. This takes a toll on the Unit test, System and Integration test efforts  
4. Typical Test Scenarios, Acceptance Criteria for any defined scope/requirement with valid test data should be made available to the team as part of the design specifications  
5. People keep changing; hence the observations have to be recorded for any project manager or team to take over. This transition effort & cost associated needs to be accounted.
6. Costs incurred due to resource blocking (typically in case of T&M and Augmented projects) should be thought through  
7. Infrastructure Challenges, Automation Efforts, Testing, Documentation, Project coordination, Team availability, Team Transitions, Training and management efforts should be evaluated timely.  
8. Additionally, contingency efforts should be planned at 10-15% or more depending on the nature of the project 

Always, watch out for the impediments which hampers the project progress. It typically turns to be a chaos during testing phases and puts an added pressure on the project manager including the team to deliver within budget and quality gets hampered severely. Project managers do struggle to better the defect detection and defect removal efficiency but it does result in high Cost of Quality.

In Crisis situations, here are few things you should consider/re-consider looking at for re-estimating/re-budgeting.
  • Segregate the Scope into Must-Have, Nice-to-Have 
  • Evaluate your deliverable's, tasks, processes, teams in hand – 
  • Re-validate the Work Breakdown Structure (WBS) and Critical path Re-validate the Acceptance Criteria by involving the client 
  • Look into Reuse scenarios – use existing code, validate open source options which can be validated to fit into the new budget constraints 
  • Consider going agile to meet the scope & milestones 
  • Evaluate your communication & escalation mechanisms and whether it is being followed 
  • Status Reporting is critical at this time to get relevant support & confidence from senior management 
  • Believe in Critical Feedback 
  • Restructuring the team always helps in crisis - Engaging teams the right way is quite important at this time
  •  Involve your teams in estimations, process & project changes
Believe in continuous learning & continuous improvement for team & your own project management skill set; even in state of crisis.
 
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About:
✔CEO, ENSCONCE ✔President, MSME World Bangalore Chapter ✔People, Process &Tech Functions Enabler ✔Business/Tech Speaker
 Srividya with her prior Consulting experience for Startups since 2014, and as a Founder of Ensconce is passionate about helping Startups, Businesses at every Scale to mitigate their challenges and help define, enhance their Execution Strategies & Internal Processes for Growth/Profitability. She has proven experience of building portfolios & teams across various verticals/industry sectors.
She comes with Extensive Experience in eCommerce, Advanced Technologies & Integration Technologies space; played varied roles as Strategic Advisor, Portfolio Development manager, COE, Global Delivery, Process Control & Quality Compliance, Tech Managerial & Performance Engineering roles. She received multiple Awards & Recognition for Technical achievements, Project management or be it for People Management. She had always believed in creating a Talent Pool in which ever organization she had worked for; driven talent & innovation programs, conducted multiple PROPEL Confluences as Certified PROPEL'ler in TCS.
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