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Why Do Most IT Projects Go Over Budget?

10 mins read
written by
Dhoof Mohamed

At a previous company, where the IT team reported to me, most big IT projects ran behind schedule and went over budget. And this seems to be a common experience for business executives. Yes, technology can be complicated. However, that does not explain why IT projects typically go over budget and run behind schedule.

A few years ago, I decided to figure it out. It was important to the success of Skyriver IT. The answer surprised me but also made a lot of sense.

Most IT people are task oriented, and have not been trained in good project management. If you ask most engineers how long it takes to set up a new server, they will tell you about four hours, and they are right. However, that only includes the time it takes to do the actual setup once everything is ready.

To get an estimate of the total time it takes, you should allow time for possible problems with equipment (which commonly happens) and working with 3rd parties. With those things added in, setting up a server takes seven to eight hours, not four.

When someone takes the time to think about what resources are needed when and allows time for vendor management, estimates are more accurate. So projects get done on time and within budget. This is called effective project management.

That is why you may want to choose an outsourced IT team with strong project management skills or train your internal team on project management. Otherwise, you should consider taking an active role in helping them manage projects outside of their day-to-day tasks. A little of your time invested upfront will increase the accuracy of project estimates and allow your team to stay on time and on budget.

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