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Scope Creep Part 8 (#8 in the series Scope Creep)
By Thomas Cutting

Since we brought up the subject of budget, this is probably a good time to discuss how to handle the project financials in relationship to change management.

Change Control Budget. The biggest hassle with managing change is determining how to pay for it. A change control budget is a great way to deal with that problem. This is a fund, separate from the project, specifically earmarked for changes. The amount to seed the fund with depends on the amount of perceived project risk but is generally 15-20% of the original budget.

These funds are not part of the project until they are allocated. The purse strings are held by the Sponsor or a Change Control Board. When a change is initiated, the request is documented and presented to them for review. Their responsibility is to determine if the money should be allocated. At the end of the project, any remaining amount is returned to the organization’s budget. The process can be implemented at either the project or Program Management Office level and ensures that changes are funded. It also deters excess spending.

Whether it is moving the location of a door or adding functionality to a system, the owner is going to weigh the options before allocating the money from their checkbook. Frivolous additions tend to be passed over, allowing the project team to focus on delivering the project on time and in budget.

Thomas Cutting, PMP is the owner of Cutting’s Edge (http://www.cuttingsedge.com/) and is a speaker, writer, trainer and mentor. He offers nearly random Project Management insights from a very diverse background that covers entertainment, retail, insurance, banking, healthcare and automotive verticals. He delivers real world, practical lessons learned with a twist of humor. Thomas has spoken at PMI and PSQT Conferences and is a regular contributor to several Project Management sites. He has a blog at (http://cuttingsedgepm.blogspot.com).

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