Project Management is the art and science of delivering a scope within a specified budget and on a set schedule. Only good project management practices can ensure successful project delivery. Poor project management can have severe consequences.
Poor project management can lead to five major consequences:
Project Cost Overruns
Demotivated Project Team
Long-term sustainability risk for the organization
Let’s take a look at each one. You can find out more about the signs of poor project management.
Poor Project Management Can Have Serious Repercussions
We found that schedule delays, incompetent resource, and project cost overruns were the most common problems in project delivery organizations after surveying our 425 participants.
As you can see, project delays and project cost overruns account for more than half of the problems organizations face. Poor project management can have both short-term and longer-term consequences. Poor project management can have serious consequences for an organization. This is why project managers and project management offices must be well-aware.
Poor Project Management #1 – Project Cost overruns
Poor project management can lead to project cost overruns. Incorrect project management skills can lead to inaccurate estimates and activities that cost more than expected.
It takes a systematic approach to accurately estimate cost and thorough planning. Project managers must consider all possible ways to save money and keep costs under budget when estimating activity costs. They should consider the buy vs. make cost. They should get estimates from multiple vendors before choosing the most cost-effective one. They should also make the most of their existing resources and only purchase additional resources if absolutely necessary.
These cost-saving strategies are not the only ones that can be used. Project managers can also look at hiring cheaper resources to cut costs and avoid unnecessary or redundant activities in order to save money. These are just a few of the things a competent project manager should do to save money and stay within budget.
However, it is common for projects to lack proper cost planning. This is often due to incompetence of the project manager. The result is that the project costs exceed the budget and the organization must face the consequences. Organizations often have to borrow money to survive in large projects. They may also have to lose their client and their reputation.
Learn more about the good and bad qualities of project managers.
How to avoid cost overruns
Project management must include proper cost planning, monitoring and forecasting, as well as control. Competent project managers must have the knowledge, figures, and information to create a realistic cost base. They should also have the tools and processes to monitor and report on variances. A competent project management team will look at all possible ways to save money, and not let any money go to waste.
Poor project management would lead to cost overruns and loss of huge amounts of profit. Poor project management is not an excuse. Organizations must invest in project management skills to achieve their project goals and meet their targets.
#2: Project Schedule Delays – Consequences Poor Project Management
Poor project management can also lead to project schedule delays. Unclear tasks, conflicts, scope cr