5. How to (not) do your budget in five easy steps

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If you have reached to the point where you have to give the budget for your project after you have systematically made all the four mistakes listed previously, you are either plain lucky or a sitting duck. More likely the latter!
Here’s how to (not) do a budget. Imagine the scenario in the Post # 3. For that scenario, do the following:

1. Get the rates for a single house from a local contractor. Extrapolate the rates to 1500 houses. Simple
2. Cross check the rates against your home country rates. Rest in the comfort that they are much higher than your home country rates.
3. Ridicule all the advice by your own staff related to employing qualified Quantity surveyors by saying “That’s how we do it here.”
4. For the rates that are not available locally, use your home country rates, multiply them by some factor and build them up. Simple. Not rocket science is it?
5. Float your budget to the client

The fact that the project is the first of its kind in a less developed place, in a ridiculously impossible time frame, should not matter. Armed with this “budget” go ahead and float your tender to international contractors.
Obvious lessons from this post are

• Budgets prepared by such rudimentary methods can not be the basis to go to tender. This clearly misguides the client into believing a budget which will not stand the test when the bids come back.
• The Project Manager’s budget – if prepared at all, should not be shared as a Cost Plan document to the client.
• Do not hesitate to employ local professionals who will give you a correct picture of the rates and an accurate and reliable number.

Links to previous posts of this series
4. Read the contract you just signed
3. Don't promise the impossible in a ridiculous timeframe
2. How (not) to win a contract
1. New Business Areas

3. Don’t promise the impossible in a ridiculous time frame

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The third post in the series 10 (un)common mistakes to in Project Management. Promising the impossible in a ridiculous time frame. Rome wasn’t built in a day. Or a month or even a year. Recently the new Doha airport has also opened after a year’s delay. At the time of signing the contract for the project, Business development teams promise the impossible leaving the delivery team to struggle with the difficult schedule.
Bear with me and imagine a scenario wherein a less developed place, isolated from the developed world where even the most basic building material - cement is imported. Prices of commodities are normally three times the world average cost. Skilled labour is not available.  The topography does not favour you either. Steep gradients and a richly undulating landscape with more than 100 inches of rainfall annually. Residents of the place build a house over several years with very rudimentary techniques and methods. The largest building contractor does not build more than a few dozen residential units in a year. In this kind of a scenario would you sign a contract to deliver 1500 building units designed by architects sitting 6000 km away with the best of modern materials and amenities in less than a year? If you answered yes then I’d like to hear from you.
Valuable lessons to learn from such uncommon incidents :

• Acquaint yourselves with the ground realities of a place for which you are going to sign the contract.
• It does not hurt to disagree with the client regarding aggressive (read impossible) time lines. In fact, he should be given correct professional advice at the right time.
• The time frames are not aggressive by themselves alone, they become a constraint when other circumstances are ignored.

I will be posting about a fourth uncommon mistake "Read your contract".
Links to previous posts in this series
2. How (not) to win a contract
1. New Business Areas

2. How (not) to win a contract

The second part in the series of “10 (un)common mistakes to avoid in Project Management”, is How (not) to win a Contract
The pressure to grow multifold, to get more revenue into the kitty prompts companies and business development executives to resort to "unconventional" means to procure projects.Most of us have encountered various unconventional methods used by the go getters of organisations who spare no effort in winning a project for the company.  During the initial stages of bidding for the project this often comes under the guise of agents who can "help" you to get a project. As a Business development executive this is an easy solution but you have only postponed the problem and successfully invited disaster for your Project Delivery team. Not to mention the strain it will create between you and the client as you start the project on the back foot because the client has the upper hand in this relationship. Not the best way to deliver a project. Other problems include a huge dent in your revenue as the agent is going to take away a huge chunk.
Valuable lessons to learn from such uncommon incidents :

• As a professional entity, disallow such practices at the highest levels as they are a surefire way to invite disaster. One project acquired in this fashion will wipe out the reputation earned from all your past projects. The industry in which you work is a small group and word travels fast.
• Emphasise on traditional values like honesty, integrity and hard work above all else – though they might sound archaic and old fashioned in today’s fast paced world.

"Don’t promise the impossible in a ridiculous time frame" is the third in the series. Read about the previous post here.
1. New Business Areas

10 (un)common mistakes to avoid in Project Management

Ten avoidable issues. Very basic, Simple and based on plain common sense but uncommon to find.

New Business areas

 Image courtesy of Renjith Krishnan / FreeDigitalPhotos.net

Success in one region or a particular discipline does not mean you can duplicate your success using the same formula in unknown regions and cultures. If you are an ace at managing and designing residential developments in the Middle east, does not automatically translate to a successful design of an airport project in a different culture and geographical region (and continent) like say South America. In the competitive world, such ventures give the age old adage "Fools rush in where angels fear to tread" a completely new meaning.
Perhaps pressure to grow into new areas pushes companies to venture into such new business areas.
Valuable lessons to learn from such uncommon incidents :

• Employ professionals who have extensive experience in the new areas and business verticals that the company wishes to venture into. Needless to say, these professionals should be trusted and groomed into the company culture.
• Recognise the differences in cultures and geographies which play a large role for new companies entering new geographies and business verticals.
• Recognise the fact that new geographies and business verticals have a gestational period and would take time to yield results and profits
• Recognise the fact that successful strategies and formulae of a hugely successful region and business vertical do not translate to the same success in other regions and cultures.

In the next post I will be posting about How (not) to win a contract 

Other posts in this series

9. Don’t govern by threats
8. Support the team on the Ground
7. Provide Mission Critical information to the Project Team
6. Resource appropriately
5. How to (not) do your budget in five easy steps
4. Read the contract you just signed
3. Don't promise the impossible in a ridiculous timeframe

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