5 reasons why projects go over budget

Many projects fall into the trap of going over budget due to reasons such as poor planning and inefficient time management. Here are 5 reasons that explain how and why a project may go over budget.

Time spent is not being monitored effectively

Breaking down large projects into smaller tasks is an effective way to keep track of time. It allows you to be able to provide a reasonable estimate for how long each task will take to complete as well as monitor where more time and resources need to be allocated. Once tasks are completed it is important to record the actual hours worked to see if it matches with your estimates. This will tell you if the project is remaining within budget and whether or not a certain task needs attention. If tasks are being under-estimated that means that there is a problem that needs to be addressed to ensure that it does not continue to be a problem in future stages of development.

No Budget Manager is assigned

It is one thing to have a budget, but you need to have someone who is willing to provide accountability as well. This person’s duty is not to hover over every individual but to ensure that problems are being resolved so that the project can run as smoothly as possible. This is more of a monitoring role rather than a leadership role where costs are being evaluated at the end of every task.

Losing sight of Project Scope (Scope Creep)

Scope creep is when a project’s scope grows beyond its original definition. This usually occurs due to poor planning where the true purpose of the project is not clearly defined in detail. If the scope is not clearly defined, workers may get bogged down in smaller tasks and lose sight of the bigger picture. They may even find themselves working on things not related to the project at all. This will result in more time and resources being allocated and seeing no return on investment.

Changing the project in the middle of production

Changing in the middle of production is a trap that many people fall into. Change is usually a good thing but the problem is that these ideas or concerns should have been brought up in the planning stage. Doing so later runs the risk of adding more cost to the project since new ideas usually mean that another task is now being added which means more time and resources will need to be added.

Underestimating the importance of testing

The testing phase is one area that is often overlooked especially in software development. This is a difficult endeavour because developers know how their project works. However, users do not, and the ones that are least computer savvy usually find ways to break a project in ways that a developer would have never predicted. Developers will then have to devote more time and effort into fixing bugs which results in a higher budget and an unsatisfied user base. One remedy is to plan to have one of these users in the testing phase and encouraging them to find ways to break the projects in order to minimize the risk of going over budget.

Free Collaborative Project Management Tool

If you’re thinking of implementing collaborative project management software, try Slenke for free.  Invite your team to Slenke, work on and complete a short project together using the software, and see how we can help your team work better.