Common project management problems: project management budget and execution pitfalls

Michele Guttenberger, MPM

A successful project manager lives in the world of actuals. The principles of project management are having the Budgeted Cost for Work Performed (BCWP) match up to the Actual Cost of Work Performed (ACWP). The key operative word here is “Actual”. The deceptive paired words are a “Budget” word start with a “Performed” word end. Not all the costs in a budget are associated to tasks. This is the pitfall of many project cost overruns that accounts for items as project expenditures and not future investments. How many situations are there where capital equipment is purchased in order to achieve a project endeavor. These asset requirements are rarely accounted as a milestone event that is noted in project status charts. Who champions and authorizes new capital asset investments that enables a project to take flight? The paradox of this argument is that - the cost was not for this project alone but for the long term pay-off on future projects. Although, it doesn’t appear on Gannt Charts, it is certain it will be listed in the company’s financial statements. The budgeted cost part of project management beckons project leaders to connect with business financials beyond the life of the project. There is no project metric that shows the return on investment of new capital assets dedicated to a project beyond the project’s conclusion. To be masters of the “World of Actuals” one needs to know how to navigate a project’s investment funds as well as the performance of design engineering. The future of other projects needs to be budgeted into the actuals of the current project. The “Actual World “is where the design engineer and the financial planner merge into the same universe that is called a fully committed project with promised successo