Jonathan DoylePM Consultant| Adduco Consultancy LtdLondon, United Kingdom
Sometimes projects don’t have budgets in the traditional way. I have experienced challenges when forecasting costs where defining needs/requirements and/or bringing in third party vendors are part of the deliverables of a project too. Could cumulative overspend forecasted at least 1 month in advance and agreed as per project governance be the answer to undefined budgets at the beginning of a project? Saving Changes...
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Stéphane ParentSelf Employed / Semi-retired| Leader MakerPrince Edward Island, Canada
It sounds like your project is getting into execution before your planning is done, Jonathan. Not exactly an unusual situation but it can create catch-situations such as those you presented.
If project costs are incurred before the project begins then you need to negotiated with your sponsor or client to see how they should be handled. In all likelihood, you will be told to suck it up and add it to the budget you will be forecasting.
One thing you can do is provide a cash flow statement so your sponsor can see how it puts the project, and the organization, in a negative cash flow situation.
It''s even worse when you have to purchase a lot of capital equipment up front. I''ve worked on projects where the equipment is purchased by the project and then "sold" to the client. The project is on the hook for the full capital amount until it gets recovered. Depreciation does not help either. Saving Changes...
PANKAJ KUMAR JOSHIGeneral Manager| Transrail Lighting LimitedNainital, Uttrakhand, India
You are correct, many people do the project like this. But this is not a right way. You always have planning to do the work, time spending depends upon the project size.You can do rolling wave planning. Always plan a cost for the project, you can take the help of subject matter experts, reference from previous project. Without planning means one is not sure where to go. Saving Changes...
MAEN QADDOURAHProject Director| AJ SAUDIJeddah, Saudi Arabia
Planning is no.1 task. Saving Changes...
Jonathan DoylePM Consultant| Adduco Consultancy LtdLondon, United Kingdom
@Stephane – Yes, projects are getting executed without proper planning is finished, in the sense that in some situations the business case is not fully signed off but the expectation is that you just have to get on with it because there is a deadline to reach. Negotiating with the Project Sponsor upfront is a good option whilst providing them with forecasted costs. Sometimes Sponsors become blinded by what has been promised the client rather than the financial impact it will have on the project…and if the project does not come-in under the budget that is (eventually) agreed it is the Project Manager that tends to get the rough end of the stick.
I share your pain on the purchase of capital equipment, I too have worked on a similar project relating to capital equipment, and it’s a challenge.
@Pankaj & Maen I agree totally with you but sometimes the Sponsor/Client does not see it that way. Especially if they view the project as a quick in road to a new market for their business. Saving Changes...
PANKAJ KUMAR JOSHIGeneral Manager| Transrail Lighting LimitedNainital, Uttrakhand, India
@Jonathan: Thanks for sharing your experience. I agree that sometime client/ sponsor is not interested. However planning helps you to limit in your boundary and helps to avoid unwanted cost. Saving Changes...
Jonathan DoylePM Consultant| Adduco Consultancy LtdLondon, United Kingdom
@Pankaj: I share the same sentiments as you, planning is the key. Saving Changes...
