Basis for Transformational Project Paradigm Management Reporting

An inherent conflict exists between having a single budget number in advance of work performance and systems work estimates being refined as a result of doing the work itself, as discussed in Chapter 2. Cost measurement against advance budget numbers can show cost overruns when they do not in fact exist and cause project participants to be evaluated unfairly. On the other hand, the budgeting in retrospect that flows logically from the nature of systems work provides no means for control or evaluation. Unfortunately, the nature of systems work prevents even a most likely estimate within the cost range.

What can be done? The budgetary commitment can become a range that narrows, barring obstacles or external changes, as milestones are reached. Thus, budgets should reflect a high and low plan. Even so, the reporting system will need to provide for approved exceptions that cannot be foreseen when the range is estimated. The next work stage and the remaining subproject or project will need to be reestimated at the end of each stage.