Protecting software development projects against underestimation

When competing for projects, project teams will often create aggressive schedules and budgets that leave no room for mistakes or setbacks. These plans are often so tight that the project teams significantly underestimate the effort they will need to perform to deliver the project as the client requires. This article examines an approach to developing project contingencies administered at the portfolio level, an approach that suggests a contingency should reflect the effort needed to recover a project from underestimation. In doing so, it defines the purpose of contingency funds and the problems teams face--and the solutions they typically select--when their projects slip behind schedule. It identifies the three behaviors affecting how teams use contingency funds; it lists a formula for understanding why project contingencies must equal the expected cost of recovering a project.
member content locked

Log in or join PMI to gain access

or Join

Advertisement

Advertisement

Related Content

  • PM Network

    PMO Possibilities member content locked

    By Scott, Lindsay Lindsay Scott, direct of program and project management recruitment at Arras People (London), offers career advice for project practitioners looking to move up into program management and for…

  • PM Network

    Delivering on a Promise member content locked

    By Cohen, Yael The way your organization handles proposals has a big impact on the projects themselves. That makes it crucial for project managers to pay attention to the proposal process.

  • PM Network

    Safety in numbers member content locked

    By Rockwood, Kate Every project has risks. Whether the cost of a building material suddenly spikes, the value of a currency nose-dives or the regulatory landscape changes mid-project, realized risks can kill a…

  • Estimating member content locked

    By Meyer, Werner G. Estimation is at the heart of most project disciplines, and project cost and time overruns can often be traced back to inaccurate estimates. Estimation requires human involvement to create a…

  • How much does this cost? member content locked

    By Leybourn, Evan How much will this cost? How long will it take? What am I going to get? These are the questions that every agile project gets asked at some point. And while "as much as you're willing to spend," "as…

Advertisement