There are a lot of possible reasons for this. I’ll enumerate the reasons why I think projects cost more than expected, and then discuss the most probable ones. Let me know what you think! Got a few more reasons?
- Forgotten tasks
- Unknown tasks
- Customer expectations change
- Feature creep
My biggest issue is always ‘forgotten tasks’. In my experience, forgotten tasks results in project cost overruns more often than any other reason. People tend to throw out a cost before they have listed all the work involved. Halfway down the road, they remember 25 – 50% more tasks. That adds up!
Sometimes, one thing leads to another. Tasks that you didn’t know about pop up. What are you going to do when that happens? You can’t just abandon the project. You have to eat the extra work and absorb the cost overrun.
Once your customer gets a look at the product, he may have a few new ideas of his own. He may see something he likes, and feel free suggest some additions. Those add up too. Just make sure he knows that he must absorb the additional project costs. Otherwise, you’ll end up eating that too.
Feature creep happens when customers and developers like what they see and want a little more, and little more, and a little more. Before you know it, there’s an extra 10% cost in the project. Yikes!
–ray