Are project managers accountable for potential overruns in the costs of their projects?
This is a typical question that appears frequently in conversations between PMs. In my opinion PMs must:
- obtain estimations of the whole costs of the project
- determine the budget for the project
- obtain the funds from the sponsor
- agree with the sponsor on how to control the costs of the project
- ensure that there is a system to track all the costs of the project and that it is properly used
- inform periodically all the relevant stakeholders about the actual costs (vs the planned ones)
- manage change requests and obtain approvals (or not) if additional costs are required
In big organizations there are usually sponsors and executive sponsors.
Executive sponsors are the ones who own the budget.
They provide the funds and guide the project in order that it delivers results according to the strategy. However these kind of people are usually very busy and is not easy to get access to them. It is important to ensure that thay delegate some functions in the ‘simple’ sponsors.
Sponsors are less senior people but frequently more prepared to understand technical details and with enough availability to dedicate time to the project in a regular basis. It is important to identify one of them in your project and to obtain their commitment to support you as a PM.
Sponsors do not own the budget but they have authority to manage it.
They are the ones that can follow with the PM the day to day of the project, read the updated cost reports and even approve some limited additional costs. They make the life of the PM easier and are crucial for the project success.
What is your experience with sponsors? Have you identified these 2 roles in your projects? Do you have this kind of sponsors in your organization?