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if you are budgeting a $1,000,000 project, you should also budget 10-25% for possible unforeseen overrun or unexpected happenings.
While you are on a travel, you keep additional money even though you know the requirements exact.
In budgeting also some uncertainties are expected and provision reserved.
i think it is between15% to20%
I agree with Mr. Alex Yazouri ...
It depends on my info of the Project, estimations, etc. But normally there is a contingency of10-15% easily and15-20% if necessary
This type of contingency is added to the whole project. You may decide to add contingency of20% for a particularly risky project. Take the total amount of effort for the project and add another20%.
The difficulty with this is knowing where to allocate it to the schedule. You could add it to the end but then as soon as you use a portion of the extra days your tracking will show that the project is behind schedule, even if the final milestone is still very achievable. You could allocate20%, for example, to each project task or phase, but while some tasks may need that much, others will not. This is where the Phase contingency is the most useful.
This type of contingency is added to project phases in reflection of the risk associated with this phase. For example, things on a project are most flexible in the early days, so the initiation phases and requirements gathering work will have a greater amount of contingency added than the close down phase.
This contingency is normally calculated as a percentage. If the phase is100 days of effort, contingency at20% would be another20 days. As the project progresses, the level of risk reduces as the requirements and issues become known, so the percentage will be reduced. In the close down phase the percentage added could be as low as5% or none at all.
If you don’t use the contingency per phase, what will happen to it? Does it get carried forward to the next phase, or is it lost forever? It is good to establish how you will handle contingency usage at the beginning of the project, so you know what rules to apply when you reach a contingency situation. Ask your PMO for guidance if you are unsure.
20% to30% in software projects
It varies depending on the business type
Really depends on which industry this question is directed to.
it depends on my info of the project. normally there is a contingency of 10-15%
