Contingency

I’ve seen a few projects where customers said they didn’t need contingency, because they decided to adjust the budget as changes happen. How does this sound to you? To me, this sounds pretty bad, because there is an important distinction between adjusting the budget based on change requests and consuming the contingency reserve.

If projects were completely predictable, there would be no need for risk management . Everything could be planned and executed according to plan. However, we know better. Unexpected things happen, disrupt the original plans and cause time and cost overruns. In IT projects, these overruns are far too common to be ignored.

“Software projects are no different from other projects”. This statement is being repeated over and over at project management courses and seminars, even endorsed in books. It’s true that software (and ERP implementation, as a subset of software) projects have many traits in common with projects in other disciplines.