When is a Project Over Budget?
Few moments in project management feel as urgent as when your project goes over budget. It happens often, with research showing that over 90% of large initiatives exceed their initial projections or deadlines. Early detection of a project over budget, and fast action give your project the best chance to recover.
Why a Project Goes Over Budget
Projects go over budget for common reasons:
- Teams make optimistic cost estimates and underestimate the actual effort.
- Scope creep adds features without adjusting the budget or timeline.
- Delays inflate costs through added labour and overhead.
- Poor cost control hides early overspend.
- External issues such as price rises, regulatory changes or supply disruptions force unexpected spending.
Being aware of these risks helps you prevent or recover from overruns effectively.
A Cautionary Example: Birmingham’s Oracle ERP System
Ambitious projects often run over budget. The Birmingham City Council’s Oracle ERP rollout began with a £19 million budget, but costs later exceeded £90 million, with forecasts heading even higher. The causes were familiar: scope shifts, excessive customisation, weak governance and ignored early warnings.
This project over-budget example shows the need for swift management, clear accountability and disciplined execution
How to Take Charge When You Have a Project Over Budget
You can take proactive steps to control costs and regain confidence:
- Stop and investigate
Compare actual spend against the plan. Identify the areas where costs deviate and quantify how far you have gone over budget. - Analyse root causes
Ask “why” until you find the true reason. Is it poor estimating, scope creep, contractor issues or something else? - Reprioritise scope
Identify non-essential features. Delay or remove them to focus resources on core deliverables. - Talk openly with stakeholders
Present clear facts, explain the cause and share your recovery plan. Honesty builds trust, even in tough situations. - Toughen cost control
Start weekly budget reviews. Require approvals for all unplanned purchases. Track every pound spent.
Conclusion
Facing a project over budget does not mean defeat. You can recover by staying calm, uncovering the cause and taking coordinated action. The Birmingham Oracle ERP story underlines what happens when warning signs go unchecked, but it also shows how much can be salvaged with structured intervention.
If your business is struggling with an over-budget project, don’t wait until it’s beyond rescue. At Whittier Consulting, we specialise in programme turnaround and delivery assurance. Contact us today to discuss how our expert consultants can help assess your situation, devise a recovery strategy, and steer your critical project back to success.