Staying within your budget is one of the most challenging aspects of IT project management. These tips will help you adopt best practices to hold down extra costs.
From the ebook:
Nearly all IT projects face a similar major challenge: budgets. Only about half of all projects end up completed under budget, according to the Project Management Institute.
This is largely because often, budgets are estimates based on what is known when the project is started, said Alan Zucker, founding principal of Project Management Essentials. “We expect project teams to deliver definitive estimates at a time where there is still a high-level of uncertainty,” Zucker said. “More accurate estimates and budgets can be calculated after the scope and requirements are better understood. By that point, most project budgets have already been established.”
Agile project and software development methodologies have exploded throughout the enterprise as ways to help projects operate more efficiently in terms of time and costs, but many companies still face challenges when it comes to delivering IT projects under budget. Here are 10 tips and best practices that could help.
1. Let the team doing the work set the budget
The team doing the work, not just managing the work, should be the author and owner of the project budget, said Meghan Glasgow, a senior manager at Deloitte Digital. “You want to be sure budgets are done by the workers, not to the workers,” Glasgow said.
You can ask the team to come up with a range of budgets that are low, medium, and high to learn more about what is actually driving the costs. “This not only gives you the proper range for planning purposes but it provides insight as to when senior management or additional oversight is necessary,” Glasgow said.
2. Take a smaller approach
“Business and IT leaders often have trouble keeping projects under budget because their focus is generally on massive overhauls requiring huge amounts of resources, time, and manpower to complete,” said Jay Jamison, senior vice president of strategy and product management at Quick Base. “Digital transformation projects don’t always have to be Big Rocks—multi-year, million-dollar efforts. We see many CIOs supplementing the Big Rocks approach with a Small Rocks approach, which enables the boots on the ground to take action on their own in real time, reducing backlogs to better serve customers, prospects, and employees.”
Massive projects with multi-million dollar spend are often destined for slippage, both in terms of time and money, said Rema Deo, managing director of 24By7 Security, Inc.
“If it is inevitable to have a project of a large size, attempt to break it down into manageable smaller projects that have shorter lifecycles and where results can be seen at the end of each project,” Deo said. “Monitor not only project and activity progress on a periodic basis, but also the spend vs. budget.”