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Project Overrun (also called a cost increase or budget overrun) means a budget deficit that occurs in a result of unexpected costs – sometimes an organization may incur some additional expenses that weren’t allowed for the budget on the planning stage, hence budgeted limits appear violated and this project begins to lose its yield. Project overrun may occur due to:
- Underestimation of project costs, which may happen because of adherence to only an optimistic scenario when planning, while not paying due attention to pessimistic factors;
- Overlooking project risks (their occurrence) or understating their severity, which can decrease project viability and profitability, or even can collapse its schedule;
- Project creep which means changing of the work content while the project is already in progress, so the schedule and costs begin to enlarge in an uncontrolled manner;
- Poor performance of the team members who cannot cope with their work packages on-time, so they create project protractions which may delay the whole project and hence add costs such as decrease of project profitability, adding time for re-delegation of failed tasks, etc;
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