Among the many challenges faced by project managers, time and budget overruns stand out as one of the most frequently encountered problems. These overruns can compromise the success of a project and have a significant impact on your organisation and its stakeholders.

How can project managers overcome these obstacles to achieve the desired end result?

Many factors can contribute to time and budget overruns in a project, but most have their origins in poor initial definition and planning, ineffective risk management or clumsy contingency management.

Definition and initial planning

I systematically observe projects that have already started but for which there is no scoping memo, or where the scoping memo is incomplete or badly drafted. In other words, the scope of the project has not been clearly defined.

I also frequently notice a lack of detailed planning, i.e. a detailed schedule and budget, or poorly conceived and imprecise plans.

Without a clearly defined framework and initial detailed plans, it becomes extremely difficult to align with the COPIL or the customer on what constitutes an overrun. This is bound to lead to chaos and frustration for all the stakeholders involved.

The obvious solution is to invest the time needed to draw up these initial documents before even committing to the project. In any case, rough initial documentation is better than no documentation at all, but it is clear that the more detailed and accurate the documentation, the easier it will be to respond to unforeseen circumstances. It is up to project managers to adapt the complexity of this documentation to the complexity of the project, and not to overwhelm stakeholders with details that are not necessary for the nature of the project.

The quality of these documents depends on their structure and content, as well as the quality of the estimates. To achieve this, it is essential to work in collaboration and to build and estimate directly with the business experts. A project manager is a facilitator, an integrator, and can never have the same depth of expertise as each individual operational stakeholder.

As far as good practice in estimating is concerned, an article has been devoted to this subject.

Risks management

Unidentified or poorly managed risks can lead, among other consequences, to problems that delay the project and increase costs.

Just as some projects are not documented in a detailed schedule or budget, I see even more frequently projects where no thought has been given to risk management.

I strongly recommend systematically carrying out a risk analysis for all projects, whatever their complexity. For an uncomplicated or low-stakes project, a high-level risk analysis, such as a SWOT analysis, may suffice.

On the other hand, complex or high-stakes projects absolutely must be the subject of a detailed risk analysis. Inevitably, some of these risks, if not managed, will lead to delays or cost overruns.

Managing the unexpected

All project managers are aware that as soon as a project’s schedule and budget are established, they quickly become obsolete. The environment in which any project evolves is dynamic and changing, requiring constant management of unplanned events.

Establishing a detailed schedule and budget does not guarantee that the project will run smoothly. However, it does allow project managers and the COPIL to be much more effective in their decision-making, as these plans enable them to quickly understand the consequences of an unforeseen event on the scope of the project.

A minor contingency, i.e. an event that does not alter the scope of the project, will be managed at operational level and will require an adjustment to the detailed plans.

On the other hand, a major unforeseen event, which calls into question the scope of the project, will have to be dealt with at strategic level. This will involve adjusting the scope note, or even abandoning the project, and this falls under the authority of the COPIL.