Project Management Central

Please login or join to subscribe to this thread

How will you manage budget cuts in project ?

How will you manage budget cuts in project ?
Sort By:

Following our defined governance process.

Agree with Sergio. You may also need to change the scope or deliverables or ... accordingly.

Analyze the Impact and then make adjustments in the suitable work areas to ensure that overall health of the project is not disturbed and proactively update the stakeholders on the changes.
If cut are too steep then you might have to have make sure that all stakeholders are in agreement and have an understanding about the issues and challenges and the overall effect of this change.

Depending on the scale or type of project, this may be the time to send in a Change Request. This should give the PM the chance to tie in the critical success factors to the new budget while helping him eliminate aspects of the scope of the project that may not be accommodated by the new budget deficit. If this change request is approved, this results in the performance of integrated change control.

Your project sponsor and other stakeholders should be made aware of how the slash in the budget will affect the results of the project.

In some other cases, you may have to improvise to achieve good results. This is one of the qualities of a good leader; Creativity.

If this occurrence had been identified earlier, during your risk identification, then you stand a better chance at applying the risk contingency plan, however, if not, then you may have to adopt and adapt to the new budget.

With a clearly defined communication structure, transparency in communication, and direction for efficient use of resources, there really should not be a problem since all stakeholders are brought to the same page concerning the effects resulting from the budget slash.

Shadav -

If you work for a company where this is a common occurrence, I'd view this as a high probability risk which could be actively accepted by coming up with a "Plan B" proactively which is kept in your back pocket to pull out if the axe drops.


Well Noted. Thanks to all of you to explain it.

Budget cuts will impact your scope, schedule and quality of deliverables . Go back to change control board and sponsor to understand the must haves. Evaluate any new risks that may arise. Communicate with and get feedback from stakeholders especially those most affected and with greatest influence

As a PM you can always make a recommendation on whether it is wise, or not, to reduce the budget, once project impact has been assessed.


You need go to the customer and tell the scope needs to be adjusted and reprioritized in order to have a win-win situation for both.

Please login or join to reply

Content ID:

"I've had a perfectly wonderful evening. But this wasn't it."

- Groucho Marx