Project Budgeting is Critical to Project Success
Establishing project budgeting as a key success factor in project management sounds elementary and rather intuitive to most of us in design and construction. However, the importance of establishing a comprehensive budget at the very inception of the project cannot be overstated. Early in the life of a project, the team is faced with a multitude of decisions, from establishing project charters, end-user requirements, landlord or agency approvals, design team selections and so on. When it comes to answering the question “How much will it cost?”, owners frequently rely on internal guesstimates and inappropriate historical data to develop initial budgets.
As a result, projects commonly gain internal “approval” based on inaccurate budgets. Depending on how late in the project cycle a budget bust is identified, the results can be serious: costly project delays, business disruption and negative company morale.
The good news is that these negative results are largely preventable with comprehensive cost planning and thorough project budgets. By engaging an experienced project team at the very onset of a project, the scope of work, schedules and probable cost can be developed and managed successfully. Owners are understandably concerned about the added cost of hiring a project manager/owner’s representative. With looming project expenditures owners are tempted to assign project management to internal staff. However, an experienced project manager will add value by creating cost savings, organizational structure and project efficiencies that far exceed cost of services. And by outsourcing project management, the internal team can focus on company core business.