Cost overruns

Delay and cost overrun are inherent part of most projects. In our project till now, most of the

delay happened in setting up new office as this phase is just complete less than one-third

(26%) of what the actual planned timeline should be. Initially in defining requirement, the

requirement required to initiate is still not fully defined as there is some permits are needed

to be approved by government and incomplete new phone line requirement which takes

more resource and time caused extra 400 dollars than as planned. Due to this, Project

manager and office manager are overallocated. Moreover, updating the company

information like company letter heads, business cards, contact and fax number, etc. on our

website and other modes of communication with suppliers/contractors takes at least more 5

days from now and even worse the assigned resources are schedule for upcoming tasks.

Moreover, for phase setting up new office, the planned cost is $15,916.00. However, in interior

work and setup communication channel at new place delayed because of the delay in material supply

and miscommunication in procurement plan. While ordering new the phone and internet connections

are already done, but the work of installation is pending as the work does not went according to

proper procurement plan. This is because the local company agreed to provide the service of

installation at as per plan but due change in new location space and misunderstanding the blueprints

of new office by them. Change in procurement cost us more and network support manager was unable

to deliver the task on time which lead the cost went to 3200. More alarming thing, till now date the

interior work is just started and the exterior work about to start, however there was 2 times money is

spent as it should be spent. We got approval for office and now ordering the chairs, desk and other

furniture’s/equipment but this required more time to finish. The delay in creating purchase order,

new invoices and set payment terms for suppliers/contractors required two more days and senior
account manager is stuck with approval for new order from management and delay in getting and

clearing payments.