First off, I fully believe that it is critical that the project budget be managed closely and regularly throughout the project engagement. With weekly oversight, you can hopefully avoid the need to take any corrective budget actions as described in this article. Basically – stick to these two principles:
Review and reforecast often. By reviewing the project budget and reforecasting it weekly – then it will never get too far out of hand barring, of course, a catastrophic event. And if it never gets too far out of hand the corrective action you need to take will be small and manageable.
When 10% is better than 50%. You can recover from a 10% budget overage that you might experience if you’re managing the project budget closely like I’ve mentioned so far. However, if you’re not – you can easily get into a situation from which there is no budget recovery. No amount of corrective action will fix it.
For the full article, go here...