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Categories: budget
Are you struggling to keep your project finances on track? With stakeholders coming up with ‘critical’ amendments to the scope and more and more pressure on resources I wouldn’t be surprised if you, like many other project managers, were finding it difficult to stay within budget.
Here are 5 ways that you can try to keep your project budget on target, but be warned, they aren’t easy!
1. Say no
Yes, the first and simplest way to keep your project on budget is to just say no. Say no to cuts in your budget when senior executives want to make savings across the board. Say no to giving up project team members to other projects if that will make yours take longer and cost more because you’ll have to hire an expensive contractor. Say no to making costly changes.
As you’ll probably have realised, you need to have some significant influence in the business to be able to make these kind of statements, as most of the time it is your sponsor who is the decision maker and you are there to implement their decisions. So you may find that they only thing you can do is recommend that the sponsor says no. Try it – you never know what might happen!
2. Change the scope
You could recommend that the scope be slimmed down. Projects often go over budget because they try to achieve too much in one go. An alternative is to introduce phases. Suggest to your sponsor that Phase 1 delivers the basics (cheaply) and then alternative funding is secured for future developments.
The downside of this approach is that sometimes the future funding is never forthcoming and you end up with the basics, permanently.
There could be little areas of scope that you could negotiate excluding with your stakeholders. In exchange for ensuring the project meets budget they could be willing to forgo some additional bells and whistles. Ask them. They might agree with you.
3. Focus on the right changes
Change on a project is inevitable and it’s very likely that your project will see a lot of it. Unfortunately, changes can be costly. So focus on doing the right changes – the ones that will help you meet the stated strategic objectives of the project. If it’s a change that will make the product blue instead of green and it’s for internal company use only, talk to your stakeholders. Explain the additional time and cost involved in making the change and encourage them to stick to blue.
4. Avoid gold-plating
Is your team doing additional work that they really shouldn’t be? This is gold-plating. It’s when the project team add in new features because they can and because they think the customer will appreciate them. In many cases, the customer does appreciate them, because they’ve got a whole lot of extra features for free!
Don’t let your team gold-plate your deliverables. Stay on top of the scope and ensure they are only doing what they have been instructed to do. Anything else needs to be put forward as a change request and approved through the normal channels.
5. Cut quality
This is going to be an unpopular one, but it is something that you can do to save cash. Say your project is to set up a facility to make bricks and the bricks need to be of a certain standard. If you currently quality check 15% of all bricks to ensure they meet the standards, could you cut that to 10%? Lowering the rate for inspection would help save time and money, and unless your customer has specified that you must inspect 15% of the bricks before they will accept the facility, then you could make that change and still stay within your contracted terms.
Alternatively, say you are creating a new website. Customers enter their data and get a quote back for your services. If the response times for getting the quote could be increased, you’ll most likely save development time and perhaps even money on computer kit with faster processing power.
Have a look at your project and see if and where you could make some small changes to quality to save money, without compromising the overall integrity of the project.
That’s 5 ways to keep your budget under control, but I’m sure there are plenty of others. What techniques do you use to make sure your project comes in at its budgeted cost?
Posted on: July 24, 2013 11:57 AM |
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