Current Projects Exceed Authorized Budget
If a project budget overrun is small and incremental, the Steering Committee probably needs to go ahead and approve the excess. However, if the cost overrun is substantial, it may require that the entire Business Case be re-validated for that project. A project that makes great business sense at a certain investment level may not make as much business sense at a higher cost level. Money that is already spent must be considered a "sunk cost". The question is whether the additional funding is better spent on this current investment or whether the money would be better spent on the next high priority project.
It is always a dramatic step to cancel a project that is in progress, but if the Business Case no longer supports the investment, canceling the project may be the right and proper course. Sound portfolio management requires that you cut work that no longer makes business sense.
Current Projects Exceed Estimated Deadline
Some projects may not exceed their budget, but they may still miss their required deadline or they will end up taking longer than estimated. This situation has the added complication that this usually means that resources are tied up on this project rather than being able to start on new projects. This is a concern for all subsequently scheduled projects because they are being delayed not by lack of budget but by not having the required resources available.
Quality Assurance on Outsourced Projects
Outsourcing of project work is even more common today. However, even though you outsource the work, you cannot outsource your obligation to make sure the project is progressing smoothly. If all goes well with the outsourcer, you have less direct work to do. Unfortunately, in many instances, the outsourcing vendor does not perform against expectations. If that happens, you want to know about it as soon as possible.
Even though work is outsourced, you still have responsibilities that cannot be performed by the outsource project manager and must therefore be done in-house. This includes: arranging the required in-house participation or interfacing and working space if applicable, coordination with in-house units and integration with their work during cutover, checking progress payments and seeing that they get paid, and so on. So, it is usual still to assign the project to an in-house project manager, but the roles are obviously quite different.
Instead of assigning the work and managing detailed issues, scope, risk, quality, etc., the in-house project manager is responsible for making sure work is being done on time and the project is progressing as it should. He or she is therefore "directing" the work rather than "managing" it, which is why that person is often referred to as a "Project Director". Nevertheless, he or she is still held accountable for the success of the project.
Estimate to Complete
Managers performing a supervisory role inevitably ask questions such as "How far along are you?" and "How are you tracking against budget?" These questions are vague, and so the equally vague answer of "Yup, we're pretty close to schedule" sounds like an appropriate response. You might even hear the equally vague "we're about half done" or "we're 90% complete." If the project manager does not have a valid work plan, or if he or she is not keeping the work plan up-to-date, the answer is pretty much a guess. In project portfolio management that simply is not good enough. (It isn't good enough in project management either!)
However, if there is a good, up-to-date work plan, a good project manager will have a sense of how much work is remaining and how long it will take. But the total numbers at the end of the project can only be determined with a reasonable degree of accuracy if the project manager has a clear idea of where the project was at, as of the last reporting date. The project manager must then conduct a review of all the remaining work as now contemplated and do a careful estimate of how much effort that will take and for how long.
Often that is not a trivial exercise on a medium to large project and hence should be called for only at less frequent intervals than the regular reporting periods. If the project were being reported weekly, then a rigorous estimate to complete would be required, say, every month. If the project is longer and is being reported monthly, then every quarter.