Jeff, who had experience in similar projects, immediately began to develop
a WBS for the major deliverables (as per the scope statement) and then began to
develop activity lists for all the measurable activities he could think of. Because
of his experience with similar projects for other municipalities he developed
the activity lists on his own and felt confident of their completeness and accuracy.
Jeff then began assigning resources to the various activities. He asked his
steering committee for advice on who was available to undertake the activities
and plugged in the resources accordingly. Jeff accessed budget figures and the
lessons learned from prior projects that were similar to this one. To be safe,
Jeff developed his resource estimate by the PERT method of estimating time (and
therefore costs). Based upon the steering committee's advice, the records from
similar projects, and his extensive experience, Jeff thought his budget was complete
When Jeff brought his budget to Town Council for approval the Councilors were
shocked at the overall project costs. Although the Councilors knew it was a significant
project they couldn't understand how the project budget had escalated to $20 million
when they had only approved $5 million in their last annual budget. They
were now in a tough spot; either shelve the project, apply a special one-time
tax to all property owners, or make the project fit in the $5 million allocation.
After considering all the options, the Town Council approved the original budget
of $5 million, with directions to "make it work". Jeff, given the size of
the discrepancy and knowing how impractical Council's direction was, decided that
he'd filter the amount of information provided to Council so he could manage the
project without interference.
Jeff then decided to reevaluate the project with an eye to making cost reductions.
He determined the public information sessions and the revision of traffic routes
were probably nice to have but not essential to the outcome of the project. Removing
these components would save a few million. He'd also scale down the recreation
complex by reducing the size of the pool by thirty percent and not build one of
the four ice rinks. By doing this he'd save 30% on the pool costs and 25% on the
rink costs. He'd also count on volunteers to assist the businesses in moving to
the strip mall when the time comes.
Now that the budget issues were settled and the project tasks and timelines
established, Jeff could update and distribute the new project plan and concentrate
on carrying out the work at hand.