# Project constantly running into problems, so how does a PM manage the consistent budget impacts?

With a certain project, I reconcile on a weekly basis to determine its performance, i.e. if estimates are being adhered to or not.

Issue: Every week, the team faces a new issue that wasn't accounted for (risk planning) and the issue obviously hits the project's bottom line.

Example: Assume a project of 100 hours that needs to be completed in 4 weeks (so, for simplicity's sake, 25 hours per week).

Challenge: As outlined below:- During week 1, 25 hours spent, but issue XYZ has surfaced and cost 10 hours. During week 2, 25 hours spent, but issue ABC has surfaced and cost 12 hours.

So current status at 2 weeks is 50 hours, but 22 hours additional due to issues.

I'm being told that it's great that these issues are being logged in detail, but it doesn't instill any confidence in my PM ability if new issues are going to surface every week that affect the budget. So the issue is that the mitigation strategy is more reactive than proactive.

Question: Given that there are 2 more weeks, what is the best way to handle new issues that may (or will) pop up?

I'm going to read between lines a bit here, but I think the issue that management has is not explicitly that the mitigation strategy is too reactive- mitigation, almost by definition, has to be reactive. I think the issue is that the way you are handling the project is demonstrating that you don't really know what the budget or timescale should be and that is what they mean by not instilling confidence.

You are in this position because of optimistic planning- you all agreed to proceed against a plan that assumed everything would go well. In fact this is a behaviour you are continuing to demonstrate ("Given there are two more weeks" - how do you know there are only two more weeks, when your experience shows that issue after issue arises and derails the project?). I am going to generalise heavily now- from my experience you get one shot at going back to the pot for more budget when nothing else has changed. You seem to be going back every week after things change even though you seem to know that something is going to change and that is what is unsettling management.

The key lesson is to plan with budget and schedule contingency- you won't know what will arise that negatively impacts your project, but you can be pretty sure that something will! So allow for it... Sometimes this is a battle with the project sponsor ("why are you charging me more when you don't even know what will fill that time? Let's cut it out of the budget and address it if/when it arises") and you have to fight that battle using your experience and past history of project outcomes. Hopefully you will be successful.

Actually you don't have too many options:

• If the project really is timeboxed and you actually only have two more weeks left no matter what happens, then if issues arise you will have to deliver with a lower quality than expected. So raise that risk now, quantify it and get it "out there" and being discussed by the stakeholders. You will undoubtedly take more noise for "allowing" the project to get into that situation, but you are going to get the noise anyway so you might as well take the early hit and do the right thing as you then stand a chance of recovering the situation to some extent

• If the project is not timeboxed, and timescale and budget will overrun in order to meet the quality objectives then you all need to recognise that you have all been working to an optimistic plan and all work together to come up with a realistic plan. One that definitely includes everyone's risks and issues of future problems based on their experience and yours, plus some additional contingency to cover things you just aren't able to foresee. You will undoubtedly end up with a plan and budget that is "too long" according to management and you will take more noise on that subject. However if you do it correctly and management buys into it, then hopefully it will be your last bite of the cherry in terms of budget and you can start to issue meaningful and accurate progress reports against a realistic plan.

Lastly, make sure you have a Lessons-Learned exercise afterwards, with all the stakeholders, and look at how and why you came to be in that position. Some of it might be your lack of experience of project planning, leading to a plan that is too optimistic- but you are not alone and it takes a whole group to buy into that plan. People around you are also guilty of letting you plan optimistically and just putting their heads in the sand and accepting your estimated delivery timescale. You need to work through the problems as a team and as a project culture. Good luck!

• +1 for reading between the lines correctly. Thanks for the insightful answer, Marv. – Ray Nov 14 '15 at 15:05

Two key expectations from a PM are:

• Assess, track and report Risk
• Manage Stakeholder's expectations

You are doing all the risk management, and it seems the second part could be improved. So, you could take some actions, such as

• Consider and cost, on your original plan, the risk of going 50% beyond schedule. With this, you'll be agreeing upfront the expected deadline period - not a concrete date, but a date range you're likely to complete your project at. If Stakeholders have a hard time accepting it, you can bring up your historical data (which is stored, as you mentioned) and use it to justify your approach
• Highlight that the role of PM is to communicate risks and issues and react to them. After all, PMs (still) cannot use a crystal ball to predict to the cent the total costs of any project. The uncertainty on your costs is highly likely to be bound to the uncertainty on requirements you might be receiving.
• As part of the thorough analysis you do on the found defects, do one assessment on the key-factors that are causing such issues, in order to address them before the project even start. Are most of these issues due to unclear requirements? Infrastructure? Lack of knowledge or resources? Having this information, you have evidences to discuss with stakeholders the need to reduce the risk you'll be reporting.

Success!

• I fully agree that managing expectations is what's lacking in my workflow. Appreciate your ability to clearly see through the situation. – Ray Nov 14 '15 at 15:07

There is no way of knowing whether your planning value of four weeks and 100 hours is optimistic, pessimistic, or just right only from an example of a single performance. What is 100% certain is you WILL have variability from whatever planning value you choose, both favorably and unfavorably, if you were to do that project over and over again. It's exactly like your commute to the airport. Sometimes you'll get there in minimum time, sometimes it'll take you forever, but most times it's somewhere in the middle.

So to answer your question, the best way to handle issues as they pop up during your remaining time is head on, the best you can. Predict the impact at the end of the project and request access to the contingency resources that you and the project sponsor certainly planned at the beginning of this endeavor. At the end capture lessons learned and use them for your next planning session.

There is no other magic bullet. This is typical project management.

• Thanks, David. In this case, based on the above two answers, letting stakeholders know that the road isn't going to be an easy is an action item. Unlike PMs, everyone else assumes that things will "always" go according to plan. So when it doesn't, the PM takes the hit for it as they are considered custodians of the crystal ball. – Ray Nov 14 '15 at 15:09

You say that every week a new issue that wasn't accounted for (risk planning) comes up.

I think these 2 items, viz: (1) a new issue that wasn't accounted for and (2) risk planning should be dealt with separately.

New issue that wasn't accounted for

Sounds you need some form of change management. Those Quick, Small changes are schedule-killers. The person asking for the changes should be identified in the weekly reporting, and made responsible for the costs involved.

For the rest of the project, resist any change that management do not approve of, in writing. The approvals must include the effects on scheduling and costs.

Unless you're referring to missing pieces without which the project cannot succeed. In that case, you need to quickly review your use-cases and make sure you're fully covered for the rest of the project.

Risk planning

If a risk that was identified actually occurs, this should be noted as such. The initial project plan should have identified these, as well as their impact.

So for the next 2 weeks, make sure that every weekly reconciliation (or project status report) includes known risks and their impact.

(If you need help with Risk Assessment, I wrote an Introduction to Risk Assessment many years ago.)