Project Management

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How do you manage internal hours to pevent budget overrun in projects?

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Svenja Merle Kassel, Germany
Hi all,
I would like to benefit from expercience regarding on how to effectively manage internal hours allocated to projects.
Context is that we have been facing challenges with too many internal hours being logged without corresponding progress on the tasks, leading to budget overrun. Reasons are numberous: People do not care, they are supposed to "just allocate their working hours anywhere".

How do you ensure tasks are advancing and and people do only allocate the agreed amout of hours in your projects?
How do you consider the cost for internal hours is tasks take longer than anticipated? Via risk reserves?

We are considering the the following measures:
- Ask project managers to establish monthly cost and hour tracking within the project team
- Require sub-project managers to provide binding plans for hours and investments, with comments on deviations.
- Have hour planning officially confirmed by the respective departments.
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Francisco Matheus Chagas
Community Champion
Project & PMO Manager | Research & Enterprise Mentor| GFB Holding South America, Brazil

Good morning, that is a really good question, that would take some pages to answer. But in short and fast answer:



To ensure tasks progress and resources are efficiently used, break projects into phases with clear deliverables, assessing required competencies for each. Estimate task durations based on team member skills, calibrating with them and adding risk buffers. Use agile sprints with daily stand-ups and burndown charts for close monitoring. Communicate expectations clearly, track time, and assign task ownership to maintain accountability.
Address cost overruns with allocated risk reserves and contingency plans. Track overtime and analyze the root causes of overruns to implement corrective actions. Implement measures like monthly cost tracking, binding sub-project plans, and official confirmation of hour planning to align project plans with departmental resources and priorities, ensuring realistic and accountable project management.

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Kiron Bondale Retired | Mentor| Retired Welland, Ontario, Canada
Svenja -

A few thoughts.

1. Treat internal hours the same as external ones. Ensure they are fully costed out in the budgeting and justification for projects and tracked the same way that external hours would be.

2. If team members are not 100% dedicated to a project, ensure that sufficient contingency buffers are built into time lines to avoid schedule overruns.

3. Use earned value to identify early signs of trouble and intervene as needed.

Kiron
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1 reply by Svenja Merle
Feb 21, 2025 7:29 AM
Svenja Merle
...
1. is a really good proposal!
2. that is what we do already - but we need to make this buffer more visible...
3. do you have any suggestions for "early signs"?
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Svenja Merle Kassel, Germany
Feb 21, 2025 7:15 AM
Replying to Kiron Bondale
...
Svenja -

A few thoughts.

1. Treat internal hours the same as external ones. Ensure they are fully costed out in the budgeting and justification for projects and tracked the same way that external hours would be.

2. If team members are not 100% dedicated to a project, ensure that sufficient contingency buffers are built into time lines to avoid schedule overruns.

3. Use earned value to identify early signs of trouble and intervene as needed.

Kiron
1. is a really good proposal!
2. that is what we do already - but we need to make this buffer more visible...
3. do you have any suggestions for "early signs"?
...
1 reply by Kiron Bondale
Feb 21, 2025 3:36 PM
Kiron Bondale
...
Svenja -

I'd start by calculating your CPI and SPI on both the project as a whole and on critical paths only.

Kiron
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Abolfazl Yousefi Darestani Manager, Quality and Continuous Improvement| Hörmann-TNR Industrial Doors Newmarket, Ontario, Canada
Kiron's suggestions can be a very good start.
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Pavan Maddi
Community Champion
Buona Vista, Singapore

Svenja Merle Managing internal hours can be tricky, but clear tracking and accountability help. Your measures are a great start.



Adding 1) regular check-ins, 2) clear task breakdowns, and 3) aligning hours to deliverablescan make a big difference.



If tasks take longer, analyzing the root cause—whether it’s unclear requirements or skills gaps—can help adjust plans early. Risk reserves can cover some overruns, but proactive monitoring is key. Curious to hear what has worked for others!

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Kiron Bondale Retired | Mentor| Retired Welland, Ontario, Canada
Feb 21, 2025 7:29 AM
Replying to Svenja Merle
...
1. is a really good proposal!
2. that is what we do already - but we need to make this buffer more visible...
3. do you have any suggestions for "early signs"?
Svenja -

I'd start by calculating your CPI and SPI on both the project as a whole and on critical paths only.

Kiron
...
1 reply by Svenja Merle
Feb 23, 2025 1:09 PM
Svenja Merle
...
Thanks!
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Svenja Merle Kassel, Germany
Feb 21, 2025 3:36 PM
Replying to Kiron Bondale
...
Svenja -

I'd start by calculating your CPI and SPI on both the project as a whole and on critical paths only.

Kiron
Thanks!

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