Part of successful project management is completing our project within the prescribed budget, yet a lot of projects overrun their budgets, particularly the IT variety. Cost overruns are the additional percentage or dollar amount by which actual costs exceed our estimates, appreciating of course that an exact estimate is an oxymoron.
While this blog item is about getting back on budget when actual expenditure exceeds planned expenditure, clearly it is much better to have an adequate budget in the first instance. See here for a blog item on estimating and budget preparation. We then regularly track expenditure against the budget to detect cost variance (that’s the difference between budgeted and actual costs). We need to detect such variance early, particularly if we wish to solve any over-expenditure easily. Should cost variance be greater than … Read More »