Projects rarely go according to plan and it is not unusual for projects to overrun. However, when projects are delayed, it leads to a lot of resources and money being wasted. For any business, that is not good business. The worst case scenario could be a breakdown and eventual failure of the project. Hence, we look at some common causes of project overruns, to refrain from making the same mistakes:
Incorrect Cost Estimation
Sometimes, incorrect budgeting results in a lack of monetary resources for key processes. This could be due to incorrect estimation or application of historical data. As a result, review of the budget is needed to divert these funds to the necessary areas, which wastes resources and time. All of these will delay key processes that hold up a project, which results in the overrun. More information could be found in our previous article.
What You Should Do:
Refer to our previous article here.
Scope defines the entire deliverables of the project and all plans, estimations and measurements are made based on it. When there are changes to the scope, it affects the entirety of a project and causes a review of the process. This would divert time and resources away from the initial plans. Scope change could be a result of bad initial scope definition, unanticipated risks, funding changes or demands by clients. While changes are inevitable, it can be mitigated or even avoided.
What You Should Do:
During the initial planning phase, incorporate stakeholders and their needs in your project to identify KPIs for measuring success. Also, discuss any changes with sponsors and stakeholders for approval before implementation. This keeps everyone on the same page and prevents possible conflicts that results in scope changes in the future.
At the same time, anticipate change for it is inevitable in projects. A proper contingency plan needs to be in place to execute any changes to scope of the project. This could be in the form of planning and including some leeway in your deliverables and deadlines.
Contracts usually encompass every aspect of a project – payment, deliverables, etc. Hence, contracts have to be clearly stated and agreed upon by the parties involved. When relevant aspects are stated ambiguously or not stated at all, it leads to disputes and long chains of negotiations and discussion to review the agreement and new budgets/schedules. This takes up more time outside of the initial schedule and results in project overruns.
What You Should Do
Draft out a contract that is most applicable to your project and explicitly define all terms and conditions within clear clauses. All potential disputes should be clarified during the drafting phase and penalties associated with delays should be stated for the parties involved to understand the risks. It would be wise to avoid using generic templates.
Projects are usually complex in nature, which are often affected by a lot of external factors. Sometimes, a diverse group of parties involved could increase the complexity of a project itself. This calls for complex plans, schedules and estimations that could be a cause of disputes and hold-ups. Hence, everything is usually documented, such as minutes of meetings, action items, etc. Improper documentation results in a lot of conflicts and prevents proper tracking of the progress of the project. Delays within the project become common as a result.
What You Should Do
Use proper documentation tools and cloud technology available to help you. These tools should enable direct upload of important documents such as timesheets and contracts to be viewed by the parties involved. Also, progress could be tracked with regular reports from members in the project team. However, do your research to find the most appropriate tool that fits the requirement of your project.