How many times do you ask this question of one of your vendors and receive an answer that you don’t believe? What percentage of the project is complete? This is a simple question that allows you to compare this figure against the percent budget spent to see how likely it is that this project will finish on budget. Your vendors will make up all sorts of reasons for you to believe their statistics that show how complete the project is. Wouldn’t you like an objective calculation that gives you this number exactly?
I have been using a simple technique that allows me to plan projects, forecast their costs and communicate their weekly status with complete accuracy. My clients are always happy with the information they receive. This is not to say my projects always come in under budget. My projects are plagued with the same uncertainties any other projects face, some causing budget overruns. The difference is that I communicate these overruns weekly, honestly, can pinpoint the causes and allow my clients to make business decisions based on them. I don’t wait until the project is 75% complete and all the money is spent to ask for more money.
There is no magic behind the technique. The federal government mandates that projects run for them use a technique known as Earned Value Project Management to report time against task. But not many laymen understand it without some intensive training in the technique. Everyone understands what it means when a project is 2 weeks behind schedule, but most would be confused if told it is $10,000 behind schedule.
It is possible, however, to salvage some of the official earned value calculations to generate two numbers that are meaningful to customers: Percentage of the project that is complete and percentage of the budget that has been spent.
Below is an excerpt from a status report that shows these two numbers in the budget portion:
So how do I generate and then justify these numbers?
The Planning Phase
I plan each project in front of the clients,