Did you know that on average, large IT projects run 45 percent over budget?
Just imagining the dollar figure of this overspend is enough to make any IT project manager quake in their boots.
Interestingly, this unfortunate statistic can be significantly improved if you avoid a few of the most common project management mistakes. What’s worse, is that these are the exact steps that are often omitted when project budgets are tight from the outset.
Don’t be that IT project manager that couldn’t - you know - manage. Take down these 6 IT project management blunders most likely to blow out your project budget and get that project back in line today!
1. Scope changes
Dreaded 'scope creep' is our number one contender for blowing out your project costs. Additional requests, features, applications and other changes will extend your project timeline and increase your costs.
Before adding extras and expanding the scope, carefully consider whether these additions fit with the project's objective. If not, manage stakeholder expectations to push out-of-scopes into subsequent phases, communicating all the while about the current phase’s objectives. As the name suggests, these things have a habit of creeping up on you, so rigorous project management is required to keep to your agreed upon scope.
2. Competing projects and priorities
Very rarely will you find an IT organisation, project manager or department working on a single project. Most often the team will have multiple projects to manage as well as everyday tasks to complete.
Ignoring the reality of this situation when planning, working on and managing a project is a huge mistake that will result in resources giving focus to less important or urgent requirements. Instead, set clear priorities for your project team, ensuring they know the current priorities of the business. It is also helpful to map which projects have interdependencies so one of your essential projects does not suddenly come to a screaming halt.
Working on simultaneous projects will lead to a drop in efficiency and focus, so prioritising is fundamental to keeping your project timeline and costs on track.
3. Unrealistic deadlines
Unrealistic deadlines can come in two different guises. The first is arbitrary deadlines which are unnecessarily strict and engender a culture of stress, overtime and 'box checking' within the team.
The second is deadlines which rely on inaccurate forecasting of capacity. Planning for 100% team capacity, for example, is a huge miscalculation.
Ask any consultant that bills time in hours, and they’ll tell you that an 8-hour workday is actually a 6-hour billable day - 6.5 at a stretch. People need to use the bathroom, drink water and coffee, eat food, take meetings and, are sometimes diverted to other projects and priorities. This is before you count holidays, sick days and unexpected events.
Forecast at 75%, or, at most, 80% capacity to allow some wiggle room and to avoid a huge rupture in your project budget.
4. Lousy communication
This one sounds obvious, but once you're in the swing of a project, effective communication can easily slip through the cracks.
A well-planned kick-off meeting, for example, is 100% essential to the success of any technology project. It enables you to assign appropriate roles and responsibilities to the entire team, as well as set clear expectations with stakeholders. This in turn, helps teams become more independent and accountable for the goal of the project, and shaves a ton of time off the stakeholder consultation piece throughout.
Following this, scheduling and diarising regular meetings with the appropriate people is key and, of course, using a centralised project management tool will also assist the project team manage tasks, resources, deadlines and budgets.
5. Undefined objectives (and poor measurement)
A budget blowout can often be traced back to an undefined goal or objective and a lack of an appropriate method of measurement to check for success.
Setting your goals upfront and defining key roles, responsibilities and deliverables will keep your project budget on track.
First, establish baselines to measure against and then set KPIs that will allow you to accurately gauge the success of the project right from the beginning.
6. The wrong resources
Fact: A person with the wrong skill set for a task is never going to be able to complete the task correctly within the same period as someone who is suitably skilled. That's if they can finish the job at all.
At best, allocating the wrong resources on a project will mean tasks take longer to complete, at worst, the tasks will never be completed or won't be up to an appropriate standard.
These incomplete or inadequately performed tasks will then have to be fixed or started over from the beginning, extending your project timelines and blowing out your costs.
While no two IT projects are the same, avoiding these six typical mistakes can go a long way towards dodging the all too common budget blowouts.
Are you considering a project management software for your business? Download our 7-step checklist to choosing the right software for your business today to ensure your choice is fit for purpose.