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Categories: budget
It happens: your project budget won’t quite stretch to the full amount you are forecasting that’s required to complete the work.
But when you do have to ask for more money, how should you go about it? The conversation with your manager or sponsor can feel a bit awkward.
Here are the steps to take to ask for a budget increase (and get it).
1. Clarify why you want the extra
You’ll have to justify why you want the extra funding. Be clear about what it’s for and what has changed since your first project budget was put together. You might have a very good reason, such as a change to the project that has been approved – but is going to cost more.
Unfortunately, it’s often the case that the estimating wasn’t that great the first time round, so you simply got it wrong and need more budget to cover the existing work. Just be honest.
2. Define how much you want
So you know you need more. But how much more exactly?
Do your sums. If your estimating wasn’t up to much last time, use a different method for calculating what you need this time. Learn from your mistakes. Use your subject matter experts to help. Add contingency. Basically, get it right.
I know that’s tough, but take your time and get really clear on what additional funding you are asking for. This is important because it’s embarrassing to have to go back and ask for extra funds a second (or third or subsequent) time. If you’re going to have to ask for more money to deliver the project, let’s ask just the one time.
3. Put together a justification or options
You know what you need and you know why you need it. But so far, we haven’t explained that to anyone. Get your story clear. Justify why the additional funding is required.
If you are able to present options, do so. For example:
- If we want to deliver the additional functionality identified by the focus group during user testing, we will need an extra $12k.
- If we want to also address the security issue that was flagged by the IT testing during penetration testing, that will cost an additional $4k.
You’re presenting a menu of options for your project sponsor to choose from. They can choose to go forward with all of them, and will need to find the full allocation of funding you have asked for. Or they could pick and mix from the list, focusing on the changes and additional work that they feel will be most valuable for the project.
4. Talk to your sponsor
With that information in hand, it’s time to talk to your sponsor. Arrange a time when you’ll have the opportunity to discuss the options.
The conversation will be a mixture of presenting to an executive and also a general chat about the project. Be prepared to talk them through your justification, getting straight to the detail, but also for them to derail the conversation by talking about other aspects of the project that concern them. Make sure you get enough time talking about the funding issue.
They might not be in a position to make a decision straight away about how much additional funding you can have and for what. If there is a time-critical element to their decision making, let them know. For example, you might only be able to secure a special discount on a product until the end of the financial year, or something like that.
Be clear that you need them to make a decision.
5. Act on the decision
You’ve got the decision. You can either have the funding (hurray!) or not. Either way, you can now take steps to work on that basis. If you can increase your project budget, change your budget numbers (and record that the change was approved).
If you have been told that you can’t have the extra funding, you need to go back to the drawing board and review what you can achieve with your project. Maybe you need to deliver over a longer period of time, or release resources, or review what you can realistically complete with the money you have.
What tips do you have for requesting additional funding on a project? Let us know in the comments below!
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Posted on: May 01, 2019 02:04 PM |
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