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Project Underrun is a situation in which the actual costs of a project (or its particular item, task or phase) appear below the projected costs. In other words a project appears performed at lower costs, so the surplus funds are put in stock – this can be a result of saving options implemented, including new technologies and project cost optimization. The surplus finances can be reallocated by project stakeholders for different purposes, such as increasing quality of certain project outcomes, acquiring project’s “extra mile” options to increase the customer satisfaction level, paying bonuses to project performers, or just for increasing project profitability. Project underrun means not only a situation when a project is done at literally cheaper costs, but also when it is done faster than it was originally planned. Project underrun can occur as a result of the following causes:
- Scope change (reduce) or quality level reduce;
- Optimization of business processes to reduce their costs;
- Outsourcing of project functions to be performed at lower costs;
- Implementation of more economical technologies;
- Financial optimization, such as tax optimization;
- Overestimation on project planning stage;
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