The financial management aspect of project management can be challenging - there is no question about it. I just read about one government project for the state of Pennsylvania with IBM that is being cancelled after going 57% over budget on a $107 million project. That's a little extreme, but it truly is easy to let a project get out of hand if the budget is not watched carefully. And I'm not even considering the hundreds of other factors that can come into play to affect a project's financial health.
First let's talk about project success and what is generally acceptable in terms of coming in over budget. What's the threshold in your organisation? For me and the organisations I've worked with and for, a budget overrun of 10% at the end of the engagement has always been within the acceptable range. With some organisations it's been even higher, but I try never to set my bar so low that I'm striving for some level of mediocrity. So let's focus on that 10% number...does that sound about right for your organisation or PMO?
First let's talk about project success and what is generally acceptable in terms of coming in over budget. What's the threshold in your organisation? For me and the organisations I've worked with and for, a budget overrun of 10% at the end of the engagement has always been within the acceptable range. With some organisations it's been even higher, but I try never to set my bar so low that I'm striving for some level of mediocrity. So let's focus on that 10% number...does that sound about right for your organisation or PMO?
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