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Project Budget Cuts

NEW YEAR’S RESOLTUION
Budgets Cuts

So it is January the 5th and you are back to work after the long Christmas break.  You deserved the break as you were working long hours in December you are now well rested, a little heavier, but feeling good.  You have a new vigour and you are ready to once again manage this complex project with renewed energy, and guess what - your budget has been cut!

In these harsh economic times all budgets have been slashed.  You have no say in the matter but you are still expected to deliver the same quality and on time.  So how do you do it?  Do you give up and mope like the rest of crew or do you grasp this opportunity with both hands.  It is only the best of us that reign in a recession.  So how do you do it?  How do you deliver what is expected without compromising quality?  How do you motivate staff with no funds for perks?  How do you tell senior managers bad news?  How do you manage expectations?  

Well realistically it cannot be done.  If you change one of the fundamentals of the project, it affects all others.  The 4 fundamentals of any project are time (schedule or delivery date), money, effort (resources) and quality, if you change one - you change them all.
By cutting your budget you may have to rely on more internal resources which may increase the effort and affect the time line.  You may have to dismiss contractors, delay milestones and cut back on suppliers.  All the nice to have things that you wanted to use to launch your project will not be available.  So get thinking.  You need to replan.  You need evidence.

REVIEW – RETHINK – REPLAN – REPRESENT

1. Review the goal.  Has it changed?  Is it now less urgent?  Is the project required?  If the budget can be cut just like that – is it really still important - or just something that can to be done differently?  If the goal of the project remains the same and if you are not compromising quality you may wish to curtail all the add-ons.  The nice to have but not really necessary benefits.  Review all the benefits.

2. Rethink the budget.  How can it been done cheaper?  Can supplies be bought locally?  Can you reduce transport costs, overtime, expenses?

3. Replan. Replan the milestones and schedule.  Do a realistic plan that shows the effects of no budget.  You are complying evidence no use in hiding the truth.

4. Represent the Evidence.  Represent the new Project Plan to all your team.  Get their buy in.  Sell it to them.  Your team may be the only team in the company who have taken on the budget cuts with gusto.  Represent to all your Stakeholders, explaining that must be done in order to achieve the goal and when the project will be delivered.  Make sure you present in front of your enthusiastic team
Managing expectations is one of the fundamental principles of good project management.

Let People4projects show you how to manage expectations and deal with budget cuts.