Project Cost Overruns

Improved Essays
Project Delays and Cost Overruns
When addressing various project management tasks in a dynamic (ever-changing), environment, the potential for a project manager (PM) to face project delays and cost overruns are not uncommon. Although it may appear inevitable for a PM to encounter problems that can have an adverse impact on accomplishing project tasks, there are effective project mitigating techniques and practices that can be implemented to resolve those problems. Some contractors may train their PMs that a solution to avoiding project delays and cost overruns is to merely bid high during contract negotiations in order to account for unexpected costs and potential project delays. This approach can lead to a contractor presenting expensive
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In today’s ever-changing technological environment, the duration of a project can be impacted by the rapid development of technology. Some project milestones can be accompanied by an added cost, such as a system‘s software or firmware upgrade (Veazie, 2003). Although cost is an important factor, PMs should avoid manipulating or altering milestones that must be performed at a specific time in order to deliver a work package; tasks must be completed prior to moving forward (Kerzner, 2013). To address poorly defined milestones and estimating techniques, a PM may look to the project master schedule and/or the work breakdown structure to review other project areas or tasks that can be accomplished more expediently than originally projected. This approach may compensate for tasks that may take longer than anticipated or if additional tasks were generated during the project execution …show more content…
It is not uncommon for a PM to encounter changes deep in a project’s life cycle, and how he or she handles those changes can dictate a project’s success or failure. When addressing changes far into the project, it is imperative that a PM focuses on the current phase of the project that requires the change and not get too consumed over whether the issue at-hand will lead to additional changes. However, for value-driven projects just the opposite may apply; PMs can encounter problems when focusing on the end of a phase, while ignoring or losing track of the potential value at the end of a project (Kerzner, 2013). PMs should understand the overall impact of project life cycle changes, and implement measures throughout the project - as required - to mitigate issues relative to overall project cost. “Cost control is monitoring and analyzing data in order to take corrective action before it is too late” (CSU-Global, 2016, p.

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