But what about the hidden costs? Those costs that are usually associated with risks that are realized and the unplanned issues that come up and knock a project off its budget and timeline. Work that you may have to give away for free to satisfy a frustrated client. It happens...it's part of the negotiation and give and take process.
For me, there are 5 key areas where hidden costs can rise up and knock a smooth running project off the rails for an unsuspecting team calmly carrying out their project duties. These are...
Vendor acquisition and management. Not all projects require outside vendors but when they do you may not have considered the risks of vendors who can't offer what they intended to offer or take extra time delivering the goods. If either of these potential risks. Exonerated a reality you will end up with additional costs associated with waiting on the vendor to deliver or finding a new vendor to provide these services.
Client engagement. You plan the project as if the customer will be available whenever you need them. Sadly this is often not the case. And you may have no control over the situation. This can result in costs associated with delayed timeframes and delayed decisions.
Resource management. When you plan the project you are usually anticipating complete availability and compliance from your project time. However, there may end up being team member conflicts, resources who are suddenly tied up on another project or resources who leave the company altogether. Replacing resources or waiting on them can be costly.
Senior management involvement. Senior management can be a food thing. They can help breed customer satisfaction by getting involved and making clients feel more important orb helping knock down project roadblocks. They can also sometimes hinder progress by needlessly getting involved for their own informational purposes by calling extra meetings and requesting new reporting during critical times of work and progress on the engagement.
The issues. Oh yes...the issues that come up and must be resolved. You never really plan for these but they do happen on nearly every project. You can bury done in the costs. However, when they start to pile up, that's when you will really start to notice the project
Summary / call for inputs
The obvious costs can be counted on and managed fairly easily. Well, maybe not easily, but at least you know what to expect...what you're looking out for. Those hidden costs – the ones that are often associated with sudden issues or risks that creep up on you and become real – those are the ones that are the scariest and can quickly doom any smoothly running, well planned and well managed project. Surprise! The best thing we can do on these projects is plan for risks, and put enough up front planning time in so we are ready to handle as much of this as possible without letting it kill the project budget. Easier said than done, and you'll never catch everything. But the better you plan, the more successful your project will likely be.
Thoughts? Readers...do you have any hidden cost ideas to add to this list...any scary stories of your own that come to mind and have changed the way you manage your projects? Please share and discuss.