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When a project goes over budget and the whole world is watching.

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You may have been enjoying the first week of events at Sochi for the 22nd Winter Olympic Games. The events and celebrations last only a few weeks, with the memories lasting a little longer. The infrastructure — and the debt involved to build it — will endure longest of all, especially with the Sochi Games being the most expensive games in history.

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More than four times over-budget and five times the cost of last Winter Olympics, Vancouver 2010, at $51 billion the Sochi Games are the costliest ever, surpassing the $40 billion spent by China on the 2008 Summer Olympics. Which seems almost impossible when compared with Summer Games, Winter Olympiads involve fewer athletes (2,500 vs. 11,000), fewer events (86 vs. 300), and fewer venues (15 vs. 40), so why did it cost so much?

Vladimir Putin has rejected the allegation that an estimated one-third of the spending has been siphoned off by corrupt officials. Whether that’s true or not is anyone’s guess, but even without the alleged corruption the cost would still be nearly three times over budget.

Ignoring the initial pictures of unfinished hotel rooms and ongoing construction, Russia did complete large scale infrastructure project. They added 200 miles of roads and tunnels built in the mountains, 55 bridges, 13 train stations, nine hotels, six post offices, five schools, and a new airport. And then there’s a 30-mile, $8.7 billion road-and-rail link from the Black Sea to the inland resort, costing more than the entire Vancouver Olympics. For that price, the Russian Esquire notes, the entire road could have been paved entirely with a centimetre-thick coating of beluga caviar. Did inexperienced project management or an unsupported project culture play a part?  Did gaps in communication or underestimates lead to slips in the budget?

According to an analysis by the University of Oxford, average Olympic costs historically overrun by more than 300 percent, so why wasn’t this factored into the initial budget of $12billion.

How would you have managed a project like this to keep things on-time and on-budget?
Want to learn how? You can watch our webinar ‘How sound Project Management impacts your profit’ presented by Bob Gillcrist, a leading speaker and educator in the delivery of sound Project Management environments. Don’t have time to watch the full webinar? Don’t worry; you can view smaller sections of interest.You can also sign up for the next webinar in the series. play_button_key_steps

The webinar covers the three core elements that impact profit as a result of their operation, maybe something the project managers of the Sochi Games wish they had watched before the world had seen the size of the final bill.

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Author: smartsoftware

Smartsoftware is an international provider of software solutions for the architectural, engineering, construction and professional services industries. Providing everything from project management, financial management, document control and resource planning to time collection and business development, our integrative products offer a total business solution – designed to streamline workforce processes, improve business performance, and maximise resource potential and increase productivity. www.smartsoftware.net Follow us on Twitter @smartsoftware_1

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