Project Management: Factors Affecting Cost and Time Overruns

This report discusses the factors affecting cost and time overruns in project management. It covers the range of control systems, cost and time overruns encountered, project execution team responsibilities, and analysis of the relationship between stakeholders. The report also provides subject-specific study material, solved assignments, essays, and dissertations on Desklib.

Running head: PROJECT MANAGEMENT
PROJECT MANAGEMENT
Name of the Student
Name of the University
Author Note

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Table of Contents
Introduction to the project..........................................................................................................3
Range of used control system....................................................................................................3
Cost and/or time overruns encountered......................................................................................6
Project execution team responsibility........................................................................................8
Analysis of the relationship........................................................................................................9
Project management actions.....................................................................................................10
Conclusion................................................................................................................................13
References................................................................................................................................14

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Introduction to the project
The process, which is related to the concept of project management, can be consider
as a concept, which can be applied to any field. In order to gain advantage from the process
different types of tools, skills and techniques are available. In the framework of project
management, different phases are there which can be utilized for the proper implementation
of the project for example planning, execution and monitoring. The aspect of time and cost
are two factors which decide the fate of a project whether the project is successful or not. The
concepts are more or less related to each other and if one phase were altered, another phase
would be altered. The project, which is taken into consideration, is VBC Project, which faced
the factor of cost overrun, which resulted in the project failure. The factor of cost overrun can
be encountered due to variety of factors for example poor planning, lack of budget constants
etc (Kerzner & Kerzner, 2017).
The focus of the report is to take into consideration the aspect of project management
and bring into account the factors, which are involved, in the process. The factors, which are
related to the concept of cost and budget, are mainly discussed in this report. The role of
project manager are always vital in the prospective of the development of a project, which are
mainly highlighted.
Range of used control system
 Cost
One of the most important factors, which play a vital role in the sphere of project
management, is the factor of cost. The factor of cost can directly affect the overall working of
the project. There are three unaffiliated process in context to the process of cost, which are
the concept of estimation, cost control and the budgeting factor. These factors are very much
related to the each other. The factor of cost can sometimes possess negative impact on the

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project for example it can hamper the quality of the product. In order to keep the parameter of
cost under control it should be taken into consideration to make a good budgeting plan before
the actual implementation of the process of development is started. There are basically three
issues which have to be taken into consideration while implementing the budget plan for a
project for example the cost related to labor, overhead cost and the cost which is related to the
administration.
 Schedule
The process of schedule can be considered as a mechanism which deals with the
prospective of the scheduling the project management process. The process of scheduling is
done so that the project meets the expected need of the customer. There are different factor
other than reaching the expectation of the customer such as the budget, which is involved into
the project and the quality of the project. One of the important aspects that should be taken
into consideration the management of the resources. The resources can be also be a major
part of a project. The people have different level of working hours, different leave scheduled
the planning, and the scheduling of the project has to be done according in order to meet the
project deadline these can be considered as moving parts of the project. There are different
tools, which can be used in this context, which makes the job less fragile and easy. The
moving part of the project in the tools can be easily be implemented and the scheduling can
be quite easily. In the project case, which is selected, the organization has a cost overrun.
This was due to the factor that the overtime concept always result in greater utilization of
resources which resulted in a overrun of cost (Kerzner & Kerzner, 2017).
 Quality: The term quality can be used to describe the standard of service, which is going
to be delivered to the customer, or the client ones the project is completed or delivered. In
the context of project management, the term quality plays a very vital role as everything

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is judged by the quality of the product, which is being delivered. In most of the cases, it
can be noticed that if the factor of the quality is compromised most of the project cases
results in a failure. The role of the maintaining the quality is the role of the project
manager, the stakeholders and the team member who are actively involved into the
project. During the phase of development quality testing should be incorporated at each
phase to see whether the system or the product is reaching to the desired quality, it should
reach or not. The quality management team has the role of judging the quality in most of
the case taking into consideration organization, which have a framework to deal with it.
Some of the factors, which are involved into the process of quality, are the reliability,
functionality, consistency and many more. After taking the account how the quality of the
service can be reached the means of achieving the standard has to be made accordingly.
 Scope: The scope of the project defines the planning of the project and the means of
achieving the standard. In most of the cases projects are judged internally as well as
internally, it order to decide the scope of the project. In order to compete the project
successfully the manger have to play an active role in defining the scope of the project
and make their teamwork accordingly. In the case study, which is selected, the overrun of
the cost could have been avoided with the implementation of a proper plan involving a
scope of the project, which would have minimized the failure of the project. The scope of
the project mainly involves the following objectives, which should be clearly be
identified before the implementation of the project starts (Marcelino-Sádaba, González-
Jaen & Pérez-Ezcurdia, 2015).

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Deliverables: This states what the project is going to deliver. It is a basic index page
of any book, which defines the overall content of the book. In this context, it can be stated
that the it deliverable also gives an idea in how the overall project would be. This mainly
includes what operation would the product or the system would be perfuming this helps the
development team about the goal they have to reach.
Project objective: After the deliverables are decided, the project objectives are set
accordingly. This mainly states that how the deliverables, which are defined into the project,
should be meet. In this context the project the software developer play a vital role in order to
get each and everything together and work accordingly. At the end of the project in order to
check whether the project is a success or not it is seen that the project objectives are meet or
not.
Customer review: the customer review can be considered as a vital aspect in the
process of project management. In some of the cases, the review from the customer can play
a vital role in the aspect of creating a better product or outcome from the project. The
customers have the right to give their feedback after the product is delivered to them.
Sometimes the feedback are very much harsh which can be helpful in the modification
purpose, which can make a project successful.
Cost and/or time overruns encountered
Cost overruns
There are different factors, which are involved in the process of cost overrun .one of
the most basic aspects which can be related in this contexts the concept of underfinancing.
The process of underfinancing can result in a cost overrun. In many cases, it is seen that a
project is underfinanced which means the fund which is required for the projects proper
execution are not allocated. This factor may directly affect the quality of the product. Taking

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into consideration all the cost aspec6ts are very much essential for the proper outcome of the
project. This is mainly faced due to the factor that the budget is prepared by someone who is
not experienced and have limited amount of knowledge. This issue is faced not in the initial
start of the project but later on when the project execution are started. Back up plan in this
context play a vital role. There are many situation where there are factors or issues are
involved into the projects working. It should be taken into consideration that the issue is
identified very quickly and implementation of the back plan is done. If there were no backup
plan the project would be a failure. Large and small projects have some amount of
complexity, which are added to it. According to the style of the project, the factor of
budgeting play a very vital role and everything is dependent upon it. All the aspects, which
are related to it, should be taken into consideration for the proper execution of the project
(Marcelino-Sádaba, González-Jaen & Pérez-Ezcurdia, 2015).
Time overruns
Time overrun is a concept, which should be avoided maximum time. This can result
in not meeting the expectation of the client and directly affect the reputation of the
organization involved into it. If the client are not satisfied with the project, sometimes it can
result in reconstruction of the project, which is very much time consuming, and directly usage
of the resources would be done which could have to ignored. The developers sometimes
taking into consideration complex project may consume some amount of time in order to
execute the project. In many cases situations are faced which cannot be ignore but is time
consuming. The delay can also be form the point of view of the clients. The client may want
changes in the project, which have to done, and the changes may involve some amount of
time (Martinelli & Milosevic, 2016).

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Project execution team responsibility
The VBC Project was considered as one of the project failure cases due to the factor
that the cost estimation was exceeded. In most of the cases it should be seen the cost overrun
concept is applied, this can be due to various reason. The project execution team can be
considered as team of members who actively participate in the functionality of the project in
order to match each criteria of the project. It can be stated that here that different project have
different types of requirement and it is the duty of the project execution team to take into
consideration what type of plan would be best suited for them. The labor in most of the cases
can be a factor, which result in project failure. The focus point that should be considered in
any project planning is the detection of the problem at an early stage so that there can be
chance of providing a mitigation to the problem so the factor of failure can be reduced. In
context of the project execution team they take into consideration all the aspects and help the
project to reach the expected standard matching all the criteria’s. The position and the
responsibility of the project management team are stated below:
 Project manager: The project manager has the overall power over the project. He directs
the team in the working of the project and guides them in order to reach the goal of the
project. The main role of the project manager is to take into consideration that all the
requirement are meet and the project is running on time. If a project does not reach the
expectation of the client, it would be the responsibility of the project manager.
 Training: The concept of training is very much essential in today’s world in order to be
advanced with the latest technologies, which are being used. The software developers
should be given appropriate training so that they can meet the need of the client with the
latest concept involved into it.
 Subject matter expert: The subject matter expert are the people who have a overall
knowledge of the requirement of the client. They exactly know what the client wants and

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what the requirement of the client is. In some cases, they instruct the project manager on
how to move forward with the project. They have a direct role of making sure that the
expectation of the client is meet.
 Developer: The developers are the main person who actually developed the software or
the project. The project manager upon what job they have in hand and what is time
framework within which they have to complete the task directs them. They are expert
people who have overall knowledge of implementation they are just to be directed and
they would be working accordingly.
 Quality assurance: The concept of quality can be considered as one of the important
factors in any activity, which is being performed. The customers always wants best
quality involved into their product so it is very much crucial not to compromise with the
aspect of quality. The job, which is related the quality control can be considered to be
catching errors. The main role, which the quality assurance does, is the detection of the
bugs or any abnormality in the code. There are many techniques, which can be used in
order to detect the bugs. The main aim should be to detect the bugs at an early stage so
that it would not be creating any problem during the final implementation of the project
(Marcelino-Sádaba, González-Jaen & Pérez-Ezcurdia, 2015).
Analysis of the relationship
The role of the stakeholders can be considered to be very much important which play
a dominant role in the overall working of the project. The main role of the stakeholders with
the responsibility, which they perform, are stated below:
Functional manager: The functional manager is also known as the resources manager of the
project. The line manager can also be a term, which can be used due to the factor that they
have the inline knowledge of the task, which is at hand, and know the overall working of the

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project. The stakeholders role are very much similar to the functional manager who have the
overall knowledge of the project. The focus point in this aspect is that they basically deal
with the formation of the project and the process that should be followed for the proper
implementation of the project (Serra, C. E. M & Kunc, 2015).
Sponsors: The stakeholder’s role is also of a sponsor. They take into account the overall
budget if the project and how it should be managed and sorted out.
Project customer: They are a group of people who see that the customer or the client get
what they want from the project. They expect that the client should always be satisfied with
the product, which is being delivered to them. They can directly interact with the developers
in order to get the maximum out of the project.
Project team member: they are the actual people who work internally into the project. The
project manager and the stakeholders gives the overview of the project but the team member
does the actual implementation of the project. They are considered as the most important
team who actual bring the project into real life. They are responsible for the look into the
budget of the project as well as the constraint of time. If the project is not completed within
the time framework or the budget, the project team members can be responsible for that. In
most of the cases, the customers need modification to the project or the system, which is
being implemented, it is role of the project team member to work into it (Marcelino-Sádaba,
González-Jaen & Pérez-Ezcurdia, 2015).
Project management actions
A project can be stated as a successful project if the factors of cost, time and budget
are all meet and the satisfaction of the client is done. In order to reach the main goal of the
project the team members, the manager and the stakeholders should work together. It is not
possible for any of the individual to complete a project by their own it should always be a

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team activity. There are mainly three phases of the project, which can be taken into
consideration, which are the project planning, the project execution and the process closure.
These three points can be considered as the most important project management plans:
Project planning: In this phase the overall planning of the project is done. The requirement
of the client is seen and taken into consideration. It is the role of the project manager to
understand in details what the exact need of the customer. This would be very much
beneficial as there would not be any confusion after the project has started the
implementation. The other factors, which are taken into consideration in this aspect, are the
time, cost and the budget constants. The planning phase can be considered one of the most
vital stages of the project management process as all the major considerations are made in
this phase (Fleming, Q. W & Koppelman, 2016). The different aspects, which are related to
the process of planning, are so much important that if one of the phases does not execute it
could lead to a complete failure of the project. In order to plan properly for the project there
are many tools which are available. The tools can be utilized according to the requirement. te
tools are very much efficient but the proper implementation of the tools have to done in order
to gain advantage from them. Some of the tools, which can be used in this context, are the
Gantt chart, text tables, network diagram or milestone chart. In most of the cases of project,
failure it is seen that the initial planning of the project is done by someone who is not
experienced which leads to problem in the execution of the project. The problem is not
majorly faced during the initial process but faced after the implementation of the project is
started or after the project has already been executed. This phase can also be stated as the
phase were the actual definition of the project is done. The scheduling is one of the important
factors that is involved into this phase. The stakeholders and the sponsors are involved into
this phase (Fleming, Q. W & Koppelman, 2016).

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Project execution: In this phase, the actual implementation of the project is done depending
upon the requirement, which is gathered from the planning phase. The developers play an
active role in this phase. In some cases, it is seen that the customers or the client’s needs
modification into the framework of the project after the implementation has already started.
This can be considered as a problem as this can involve a lot of time and it would be directly
altering the overall working of the project. In most of the cases, it may result in the time over
run and it can affect the factor of cost (Svejvig & Andersen, 2015). The resources in such
situation are also used in amount. The overall delivery of the software or the product is
depend on this phase.
Project closer: This can be stated as the final step of the process of the development. In this
phase, the project is basically ready for delivery. This phase states the documentation part of
the project were all the work, which is done in the project, are noted down. The clients or the
customer play a vital role in this phase. As the product reaches the client it is update client to
decide whether it is fulfilling’s their requirement or not. In some cases it can be seen that the
project does not match the requirement of the client in such cases the project are termed as
failure project and sometimes the project has too started from the beginning if the problem is
detected from the end of the developer. This phase majorly marks the end of the project and a
decisive stage to decide whether the project is a success or a failure. In this phase the project
manager, the stakeholders, the customer or the client all are involved and they should actively
participate to make the project a success (Mir, F. A & Pinnington, 2014).
Stakeholders Role
The stakeholders can be considered as one of the dominating player in the framework
any project management scenario. It is the role of the stakeholder to taken into consideration
all the aspects of the project from the customer or the client and convey them to the

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developing section. They should always have a clear idea about what is the main intention
behind the project and what is the role the project is intended to play. In this context, it can be
stated that there can be many risk factors, which can move a project towards failure.
Accounting the factors of risk and managing back up plans in order to resolve the issue and
make the project success is the responsibility of the project stakeholders. The basic plan how
the project would be executed, what should be the exact time which should be dedicated
towards the projects are also the role of the project stakeholders (Fleming, Q. W &
Koppelman, 2016).
Conclusion
The process of project management can be considered as one of the most important
sector relating to the development. In this context, it can be stated that there are few factors,
which play a dominating role, which are cost, time and the availability of resources. In any
project management environment, these factors should always be taken into consideration in
order to match the expectation of the customer or the clients. In most of the cases, it is seen
an issue arises during the implementation of the project, which makes the project a failure. In
such a situation, a backup should always exact which would be helping to remove the issue
and make the project a success. It should be always be taken into consideration that the
expectation of the client should always be meet. In the case study, it is seen that the cost
overrun concept had resulted in a project failure this issue could have been reduced if the
implementation of the above-discussed factors were taken into consideration and utilized
accordingly.

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