Here is a list of common cost control problems found on projects:
- Improper estimates, standards and budgeting techniques.
- Unrealistic budgets.
- Activities started or completed out of sequence.
- Inadequate WBS (Work Breakdown Structure) or insufficient WBS detail.
- Lack of management policy on control practices.
- Poor corporate and project management governance structure and policies.
- Ad hoc budget reduction.
- Inadequate planning. This is very common, particularly on privately funded projects.
- Unnoticed and uncontrolled increases is scope. The all too common “Scope Creep”.
- Lack of comparison between “actual” and “planned” costs.
- Unforeseen technical problems.
- Inadequate contingencies and management reserves.
- Project schedule delays and lack of systems to flag and deal with delays.
- Additional overtime and acceleration costs.
- Escalation of material costs.
- Contractual discrepancies and inconsistencies. These could result in gaps and ambiguities in contracts which often result in cost increases and erosion of bargaining strength.
- Unrealistic appraisal of in-house resources.
- Improper assessment of risks by the bidding team and by executive management.
- Excessive pressure on the bid team to WIN the project. “Must Win” projects are often destined for eventual failure. #costcontrol #projectmanagement #projectleadership
