If a project encounters unexpected cost increases, what action should the project manager take to adapt to the situation?

When a project faces unexpected cost increases, revising the project plan to accommodate new financial realities is essential for effective project management. This action involves assessing the new costs to identify their impact on the overall project scope, schedule, and resources. By adjusting the project plan, the manager ensures that the project can still meet its objectives and deliver value despite these challenges.

Revising the plan may include re-evaluating priorities, reallocating resources, or even modifying deliverables to stay within the new budgetary constraints. This proactive approach also demonstrates responsibility and accountability to the project stakeholders by addressing the financial challenges directly instead of allowing them to derail the project.

While communicating with stakeholders about management changes is important, it typically should occur after a revised plan is proposed or if the changes significantly impact their interests. Seeking additional funding without justification could harm relationships with stakeholders and detract from the project’s credibility. Ignoring the situation only risks greater problems down the line and often leads to more significant tension among the project team and stakeholders.