Few projects blow past their budgets simply because of overspend. More often it’s a symptom of misalignment, murky scope and churn. Leadership, capability, and governance decisions made early can shape the true cost – and success – of project delivery
When cost optimisation misses the point
It’s easy to fixate on visible project costs – contractor rates, external partners, software licences. However, projects rarely come undone because a resource was $100 more per day than a cheaper, less qualified resource. What drives cost in delivery is churn: endless rework from murky scope, or recurring meetings that never resolve anything. Sometimes it might be delays that no one feels empowered to prevent; or decisions that are never made, just deferred.
You might be tempted to see these as execution issues or the ‘cost of doing business’. However, make no mistake: they are a reflection of leadership.
When it’s unclear who makes the call, or when everyone has input but no one has ownership, progress stalls. Teams are often busy with lots of activity, but nothing seems to get done. What looks like lots of collaboration is often indecision in disguise.
Leadership clarity is one of the strongest predictors of cost-efficient delivery. Yes, visibility is important – but think about why this is? Without visibility, the ship’s captain can’t provide clear direction. Who’s setting the course? Who’s keeping decisions moving? And who’s close enough to the work to lead well?
Project managers are not interchangeable
Another cost driver that is easily overlooked is misaligned capability. Project delivery leads are often assigned based on availability rather than fit – especially under cost pressure.
However, the best value resourcing model is rarely the person who just happened to be available at the right time – and unsurprisingly, it usually isn’t the one with the lowest rate, either. It’s the one that has the skills and experience that match the project’s demands.
Project managers are not interchangeable, and they are not the same as BAU resources that perform highly repeatable processes to deliver a known and measurable output. Yet, under cost pressure, project manager selection is one of the first compromises made.
Nowhere is this more damaging than in core platform projects, where the value of project management is experience with the type of project, not knowledge of the organisation. We’ve seen multimillion-dollar investments and millions in benefits put at risk for the sake of saving a few thousand dollars on one critical resource.
The difference between a project manager who has successfully delivered similar projects, and one who hasn’t, is also the difference between a project that meets its value targets and one that drifts off course (and budget). The more experienced PM knows how to plan for risk, can steer leaders to focus on key activities and issues, and knows how to keep momentum going in an environment where friction is guaranteed. Drop someone into that role without the depth or the scar tissue, and you’re relying on pure luck and their ability to fail fast and learn on the job.
It’s the kind of mismatch that might seem appealing when you’re studying the rate card at the outset of the project – however experience shows that it will also show up in your final delivery costs, over and over again.
An experienced project leader will also be far more efficient than the cheaper, less experience option, simply because they require less time and effort. If an experienced project manager can complete a task in 50% of the time but is 20% more expensive, they will be of far greater value overall than that cheaper rate card resource, who ends up consuming more time and money over the course of the project.
Sponsorship needs to match the scale
To navigate cost-constrained environments, we’re seeing lots of larger projects broken up into smaller, focused components – a smart way to secure funding and manage risk. One of the added advantages is that these smaller work packages don’t always require a C-suite sponsor. However, they do need someone close enough to the work to lead it well.
When sponsorship sits too far up the hierarchy, projects (and costs) can drift. Senior sponsors may not have the bandwidth to stay engaged or the visibility to steer effectively if the project is “down in the weeds”. On the other hand, push sponsorship too far down and you risk bottlenecks – leaders who aren’t empowered to make decisions or escalate trade-offs.
The solution is about preparation. Smaller work packages create a genuine opportunity to broaden the sponsorship base by equipping more leaders with the skills and confidence to sponsor effectively. With the right support, sponsors who might previously have been considered “too junior” can take the lead – provided they’re empowered, clear on their role and supported by the right governance.
When sponsorship is aligned to the scale and complexity of the work, delivery moves faster – and avoidable costs don’t have a chance to build up.
Governance as a lever for cost control
It’s easy to think of governance as a box-ticking exercise – when too often it is. When it’s working as it should, governance is actually one of the strongest levers you have to keep delivery running smoothly and costs under control.
Too much governance slows decision-making and spreads your delivery team too thin with administration instead of delivery. Time and effort get spent preparing for meetings instead of pushing the work forward, and weeks slip by in rework and realignment. While none of it looks like failure, it all shows up in the budget.
Meanwhile, too little governance, and problems take longer to surface. By the time something looks off, the fix is no longer simple or cheap, and consequences are already locked in.
Good governance means building the right conditions for delivery to stay on track, regardless of the methodology in play. That’s especially true in agile or hybrid environments, where flexibility can mask churn if the work isn’t well sequenced or guided.
When delivery feels busy but isn’t moving, it’s often because decisions are being deferred or redone. In agile, that can look like sprint cycles filled with rework, or scope shifting mid-flight because the framing wasn’t right to begin with. Those costs don’t always show up on the project register, but they show up in delays and effort spent twice.
Set it up right, deliver once
Projects rarely run over because of the line items in a budget. They blow out when the setup is wrong; when the work isn’t properly framed, or the people leading it aren’t the right choice to steer it. By the time those issues are visible, the costs have been building up behind the scenes for weeks or even months.
The most cost-efficient projects are the ones that are built to run well from day one – not the ones that underperform and need to be rescued. That’s where the right advice, the right leadership and the right governance make all the difference.
Quay Consulting is a professional services business specialising in the project landscape, transforming strategy into fit-for-purpose delivery. Meet our team or reach out to have a discussion today.
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