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How Project Managers Fix Cost Overruns and Missed Deadlines

Even for the best development teams, cost overruns and missed deadlines are inevitable. Here's how to fix those daunting cost overruns and help you meet even your most stringent deadlines.

6 October 2021

by Nakul Shah

Reasons behind cost overruns and delayed deliveries  

We need to identify the specific reasons for cost overruns before we can resolve them. The causes of mismanaged builds can be many, but some of the reasons behind cost and time overruns are as follows:

Scope creep

When we undertake a project, it is important to be aware that a project usually does not get smaller over time – rather, the demands and needs of the project are likely to increase. Many people defend “scope creep” and think of it as an expected part of the project. But going that extra mile will only lead to an increase in costs and missing of deadlines. Thus, it’s better to deliver the piece of work that you agreed upon within a particular deadline.

Technology advancements during the project

As technological innovation continues, you can expect the arrival of new and advanced features after you begin to execute a project. If you have laid down your estimated amount based on the current scenarios, you might get into trouble. It is advisable to keep some buffer while laying the estimations, for both cost and time, to compensate for the unexpected advancements that might have to be incorporated. For instance, the new sign-in feature of Apple is one such example that Apple has lately incorporated and made compulsory for apps submitted to the App Store.

Inappropriate system requirements and objectives

Problems might arise when you don’t indulge in proper communication with the client. You end up defining inaccurate system requirements and objectives, and even ambiguity of specifications could occur when a lack of communication prevails between parties. To make sure that extra time is not consumed in overcoming these flaws, one must ensure transparent and clear communication.

Unqualified resources

Under-qualified or unproductive resources end up eating the margins in several projects, making them a prime reason for budget overruns in many cases. You need to select an efficient team with desired experience to finish the work within the deadline.

Wrong estimations

The most common mistake that one can make as a product manager is to come up with wrong estimations. These wrong estimations are a result of inaccurate market studies, not involving developers while finalizing on time and budgets, excessive competitiveness that forces one to cut the costs down without thinking of the consequences, and many more.

As you can see, there are several reasons for cost overruns and delays.

Tips to get back on track along with your team after a blown budget or deadline

The reasons for your project going off-track might be many, but a good product manager is the one who can bring it back on track. With severely limited resources and time, you can either surrender as a product manager, or you can buck up and direct your team with some table-turning decisions. The product managers at Crowdbotics believe in motivating the team to mitigate risks related to the delays and cost overruns. Some of the best practices that we follow are:

Don’t try to save your image

The first thing is to not worry about your image. Be open with your team and let them know the problem. If you transparently share your problem, a good team will help you come up with some eye-opening solutions.

Recognize early warning signs

It is essential to recognize and resolve the early warning signs like immature technology, unrealistic program baselines, inadequate systems engineering, inexperienced workforce, and high turnover. Don’t wait for something big to happen. Instead, keep your eyes and ears open to small problems and resolve them as you progress with the project.

Revise your plan

If a budgeting trap has appeared, don’t give it a chance to ensnare you. If there are cost overruns or meeting deadlines seem risky, it’s time to revise your plan. Take note of what your actual goal was and how you have digressed from it. This will help you get a direction to proceed forward.

Making things right with clients after exceeding expense and deadlines

Crowdbotics believes in trying to resolve any issue well before the repercussions impact a customer’s experience. However, whether it is the client’s fault or development team’s problem, it is essential to talk to your client. Even if a build’s mismanagement could be resolved entirely in-house, explaining it to the client is always recommended.

If the fault is at the client’s end, you can be a bit firmer. Especially when scope creep is exceeding reasonable expectations, you may be well within your rights to add extra cost and time.

How to communicate blown budgets or missed deadlines with clients

Maintaining a positive relationship with your clients is important. When you are required to highlight your errors, you need to be polite and at the same time firm. Be precise and clear in what you say. Some templates for communication that you can use are:

  1. If excessive delays arise, and you face a complaint from the client side, don’t deny it. Instead, accept your mistakes and say, “I know things are in a bad position now, but we are fixing it and will get back to you at the earliest.” Clients want to know that you have a plan to get their build back on track.
  2. When scope creep increases at a faster pace and project cost is increasing correspondingly, you need to convey it to the client. However, there is no need to alarm them. You can communicate in a matter-of-fact fashion. Say something like, “Thanks for sending through the new amendments. We have outlined the changes in the plan and the estimation.”

Avoid using cold and overly formal language, as it might lead to a gap in communication.

There are ample number of tools that you can use to keep upper management involved in the loop when such situations arise. Crowdbotics uses Hubspot to keep tabs on daily progress with the client to ensure complete transparency.

Action plan to fix an off-track project

If you face a speed bump while working on your project, don’t worry. It’s time to create an action plan to bring your project back on track.

Practices for anticipating and avoiding future lapses

“Prevention is better than cure.” This universally accepted idiom applies to projects as well.

Avoiding cost overruns completely is impossible, but making them negligible is within your power. It is impossible to see the future, but taking that extra step to plan and monitor your project will surely prepare you for unexpected challenges.