How do YOU avoid project overspend?

I was very encouraged when I attended a meeting of a locally registered charity. They want to embark on a very ambitious building programme costing a round £2m – a massive sum of money for this small organisation.

The objective of meeting was to update the audience of progress on the scheme. It is very early days and the big issue is funding as well as building design – a rather emotive topic. The interesting aspect that drew a lot of questions surrounded project governance. He was very clear:

• that there should only be a handful of people who could make decisions on the project. He went on to say that change control will be tightly managed – there are a lot of hard working well thought of volunteers in this charity who will have input into the scheme. He suggested that as the build was going on they would possibly want to change various aspects of the scheme. These are well trusted people and have supported the charity for many years. But he said; “we need a process to ensure that any changes are properly considered.”

• there will be a need to change the constitution (via an emergency general meeting of all members) of the charity to ensure that any project management governance structure is built into it. The current decision making structure is not strong enough to ensure there is sufficient controls over this project. Without the EGM there can be no governance structure and in his word; no project – that raised a few sharp intakes of breath. He was very clear there would be internal discussions, consultations involving all stakeholders but that the scheme was new physical structure that needed an internal structure to match

Here’s a charity that is setting out its stall for success and wants to avoid some of the many risks involved in this large capital project. They understand the need for proper controls and are even prepared to amend their constitution to ensure it happens.

What do you do to ensure your project have an effective governance process?

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2 Responses to How do YOU avoid project overspend?

  1. Ron,
    While over target budget (OTB) and over target schedule (OTS) conditions exist all the time on the programs we work – it’s just part of the risk in developing the things we work – there is always (or should always be) visibility into the Estimate At Completion (EAC) and the Estimate To Complete (ETC).

    In most of the programs we work, this is produced weekly, reported bi-weekly and reported to the government monthly in the Contract Performance Report (CPR).

    The “planned” cost is on baseline in the Performance Measurement Baseline (PMB), and the actual performance (cost and schedule) is used to make decisions.

    The visible representation of cost, schedule, and performance is collected in the Integrated Master Plan and Integrated Master Schedule. Putting Cost, Schedule, and Technical Performance (planned and actual) in one place, and showing the “to date” information is a powerful tool for “turning on the lights” for project governance.

  2. Ron says:

    Hi Glen. Thankfully the programme here is no where near as large as your programmes…..!! The key issue for this charity (remember it is a charity) is there is little or know history of the type of controls that project management brings about.

    The language used by one of the key drivers for the projects suggested he knows about the budget and schedule issues and is determined that they will not impact on the projects especially as the money has to be raised from the charity members.

    Ron

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