Project Cost Management - Overrun

Project Cost Management - Overrun

Project Cost Management - Overrun
  Project Cost Management - Overrun 

 

Isn't it ironical to talk about cost management - overrun on 1st day of month!!  1st of the month is the day most of us are richer than rest of the days in a month :-)  Project Cost Management is one of my favorite areas, right after Human Resources Management. PMBOK places this knowledge area after Integration, Scope and Time. Essentially, once you have your project schedule in place, you should be able to estimate cost and determine budget.   This, of course is more traditional (waterfall) method of estimating cost.  Agile development, however, does not claim to guarantee perfect on-time and on-budget delivery of the original expectations! 
Project cost overrun can be attributed majorly to one of 2 following factors  
1) Incorrect Estimation - Sales, Pre-sales and/or Technical team jumped the gun on estimation and you as a project manager get a project that is bound to go for loss.   
2) Scope Creep - Many a times requirements change during a project, in-spite of being agreed upon upfront. 
 
Download Also:
These uncontrolled changes and/or continuous growth in project's scope are sure to get a big dent in your project's planned cost.  Whenever I've been in situations where I see risk of project cost overrun, I inform relevant stakeholders (internal stakeholders first) of this risk. Interestingly, more often than not, I've been asked to continue with excess cost.  

Related Topics:
For projects that run in waterfall methodology, we have strengthen our estimation and planning processes and got sign-off on requirements and it resolved cost overrun for the most part. However, in Agile, things get a little tricky, even with help of Earned Value Management, sprints, velocity and known team size.  Let me know your views on causes of cost overrun for projects and how do you deal with them.  I'll be interested in knowing how you do cost management for your agile projects?
The Author: Albert Anthony
 
                                           Albert Anthony
About:
Albert is founder of Loves Cloud (www.loves.cloud).
He is a cloud and devops solutions architect. He has worked in India, USA and Middle East with large, geographically distributed teams to bring real life solutions to resolve issues for product and services.   He believes that being agile and adaptive is key to constantly resolving complex problems. His core skills are: •    Greenfield Service Launch in short timeframe •    Cloud Infrastructure Cost Optimization  Over the years, he has saved his customers millions of dollars in their cloud bill, migrated several workloads to cloud platforms including AWS, GCP and Azure along with automating several manual processes, enabling customers to focus on their products and services instead of fixing problems related to tools and technologies.  Albert is a technology agnostic professional who believes that job of technology is to solve problems for business, and it should not become a problem to be dealt with

He has authored following two books :
1) Mastering AWS Security  2) Security Best Practices on AWS.
Key Projects Managed & Services Launched  
•Started new Line of Business, Cloud Infrastructure Monitoring as a Service (24x7x365) for AWS  
•Managed Big Data Project with TBs of Data and Scores of servers in Hadoop Cluster on AWS 
•100 Services Automation for Ajman Municipality and Planning Dept., Ajman, UAE 
•IBM Maximo EAM (Enterprise Asset Management) Implementation for New York City, DoT
•Oracle 11i Production support (24x7x365) for Juniper Networks, California 
•Applications Maintenance for GE Commercial Finance, Connecticut

Post a Comment

Previous Post Next Post

Comments