The next common mistake that people make with project management is thinking that an underspend is OK
and this is surprisingly common.
Again once you've seen this you're just You'll never make this mistake again once you've seen this.
But you know suppose that I'm a million pound project and we're halfway through and I'm supposed to
spend five hundred thousand.
And suppose I've only spent 400000.
Is that good.
And it be easy to think.
Well yeah I'm underspending.
You know and I'm doing it cheaper than it was meant to be done that's great.
But of course yes I might be underspending.
But what also might be happening is I might be late.
And which one is more likely that the first half turned out to be cheaper than I expected or that it
turned out to be harder than I expected and it's taken me longer and it's going to be that second one
isn't it it's going to be that I'm behind schedule.
So underspend usually mean lateness.
There are so many ways to be late.
All you need is one person off sick one person was busy on another project and something went wrong
and had to be done a second time or there was a task that we forgot and then we had to do it.
There were so many ways to be behind schedule.
And it's actually really difficult for things to be cheaper than you expected.
So under spends usually mean lateness.
So never think in underspend is OK.
And it's particularly tricky because if you've got an overspending and lateness those effects cancel
out.
So imagine if I've only done half what I should have done but it's cost me twice as much to do that
half that's going to look bang on on the spend or more likely imagine I've only done 90 percent of what
I should have done.
I'm slightly behind schedule but it's overspent a little bit it's cost me 110 percent.
So that would mean I would be pretty much bang on on the spand.
So you've got to be really careful looking at just the spend.
The key is to separate out the two.
And how do you do that.
The answer is you look at the Gantt chart because the Gantt chart shows that you've done 90 percent
of what you should have done.
Then you immediately know that you're behind schedule and if the spent looks OK but you've only done
90 percent that means you've actually overspent on that 90 percent because that's taking you back to
the spend looking OK.
So I think you could sum this up by saying Firstly always look at the gunshot to make sense of the money
but also if you're underspent it probably means that you're behind schedule and that's probably because
you've had a problem of some sort.
And that problem will mean that in the end you'll end up spending a bit more than you planned.
So underspent means late which means there's been a problem which means overspend now overspending just
means you've overspent.
So underspending or overspending means that in the end you will overspend on your project.
And the only way we can come in on budget is to come in on time as well.
And that's you know that's difficult.
Most projects do overspend which is why we had contingency in.
But the great thing is the Gantt chart shows everything you need.
You don't have to do this guesswork of well and probably late I've probably had a problem.
If you've got a Gantt chart which you should have you could just look at that and that will tell you
whether the underspend is really a genuine underspend or whether more likely it's because you're behind
schedule.