Smart Budget Allocation for Project-Oriented Organizations

PMI Phoenix Chapter

Jakub is a Solution Consultant in Houston. He is especially passionate about thought leadership in the areas of portfolio analytics and selection, business intelligence and reporting, and resource management.

Spending decisions in a PMO can foster or impede the organization. The process is volatile by the nature of its political implications. To allocate budget and resources in a smart way—and to achieve organizational goals—a measurable approach needs to take the following dimensions into consideration…

Organizational structure
Rethink the motives of the other decision makers. The budget number and its distribution across the relevant departments should reflect the goals that are set at the top. Although clear roles may be assigned, it turns out that the power structure and motives vary in order to maximize influence.

There should be a common understanding that the goals can be achieved by canalizing budget into the top priorities. If necessary, stronger personalities should collaborate or delegate parts of their responsibilities to less-busy department heads without giving up power or accountability. Filter demands for projects to balance stakeholder interests while keeping the organization’s priorities in mind.

Strategic drivers
The distribution of budget should be aligned with the strategic/business drivers. Formulating those properly for each department is key. It happens more often than not that I discover large discrepancies in what is important versus where the most budget is allocated for.

Using a balanced scorecard, the goals can be …

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