5 Keys to Preventing or Solving an Over-Budget Crisis
Posted by Martijn van der Hoeden
Budget constraints remain some of the hardest issues to resolve for project managers in every industry. Eventually, you and your team are going to have to face a tight budget if you want to achieve stronger growth because the greater the reward, the greater the risk.
Here is some great news to inspire you, though. Your project can survive a budget crisis. Less than one-third of all projects last year were completed on time and under budget, in a report by the Standish Group. The Project Management Group found that high-performing organizations successfully completed 89 percent of their projects. How did they do it? They set controls in place to prevent budget problems and to handle overages ASAP.
Best Budget Projection Metrics
There are two essential project adjustments you can put in place today to prevent budget overages:
- Allow team members to book their hours and expenses directly on their mobile phones as they happen for more accurate, real-time projections on how close you are to hitting budget caps, and less time consuming.
- On your project management dashboard, be sure you can automatically calculate booked hours vs. your budget so you can react on time when you project is going over budget.
Best Practices in Addressing Over-Budget Issues
Collect yourself and your data. Don’t go into a meeting with your manager unprepared. Take these steps as soon as you identify the root cause of the overage.
- Describe both the problem and the solution. Never ask a question unless you know what the best answer is. When you bring up problems without a well-planned-out solution, you increase the cognitive load on your manager and shake their confidence in your management skills.
- Think bigger. Think through the next steps if your solution is put in place. Write out a brief risk analysis including impacts on the project, the team, your manager and the organization.
- Recap the benefits of your answer and make it clear that you accept responsibility for both past and future actions.
Getting Back on the Road
If you would like more practical fixes for common budget issues, we invite you to join us at our webinar covering topics like scope creep and budget overruns at professional services firms. The end of the budget doesn’t have to be the end of the road. It’s just another hazard to avoid at all costs (literally) and handle professionally if you do run into it, despite your best efforts.