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Making Good Use of Project Dollars

June 12, 2017 by Mark Donais

Making good use of your project dollars is key

The simple mindset on a project in terms of budget is … we have a budget, we manage the project daily, we try to stay on target (and by target I usually mean 10% either way), and we manage scope so we aren’t giving work away for free and causing budget overruns. Sound familiar?

But really, there’s more to it than that. There is the project manager who is thinking strategically and trying to look at it from all angles while the customer and the delivery team side view the budget a bit differently. Are there things we can do along the way to keep the budget on track without sacrificing quality? Are there little things we can do for the customer that won’t significantly impact the budget but will serve as confidence boosters?  Is the budget an ongoing source of anxiety for our project client? Do we need to strategize how we provide budget information and updates to them on a weekly or monthly basis? Will this minimize their anxiety while still giving them a clear view of the overall project’s financial health?

I’ve dealt with project customers of all kinds over the years. Ones that wanted in-depth budget updates almost continuously, others that never wanted budget updates at all, one project client who thought a high-dollar project manager was a waste of his money (that was me!) and still others that wanted updates but really had no clue about what they were looking at.

What I’ve found along the way is that by sticking to a general plan, process, and format, I can make most customers happy most of the time with the budget and financial information I’m giving them.  Sometimes with some minor tweaking, I can cater to nearly all of them without too much of a hitch. Here are the concepts that I generally try to follow…

Not everyone has to travel all the time

Most of the projects I’ve managed in recent years have been remote projects with very geographically dispersed teams. That said, it’s common to bring most or all of the team together, usually onsite at the customer for project milestones meetings or for kicking off a new phase of the project. But is that necessary? The one project customer I mentioned above who simply couldn’t see a need to pay top dollar for a project manager was very happy when I greatly reduced travel on the project from the original plan and I eliminated nearly all of my travel because it simply wasn’t necessary when the next phase really called for a visit from the tech lead. The customer was very budget conscious and I helped ease their anxiety by not making them pay for my entire team to show up at those periodic face-to-face touchpoints. This saved them thousands of dollars for each planned phase meeting.

Give them the current and long-range view in simple terms

The customer may say they don’t want budget info but give it to them anyway. It’s good accountability for you and they can never say they weren’t informed. Forecast and re-forecast the budget every week using actuals to make weekly updates and to give the customer and the project team a view into how the project looks today and how it looks throughout the project lifecycle. If the customer wants more, they’ll ask for it. If they want less then tell them you need them to be at least somewhat aware.

Know what your team is working on – look for small things to give away

Heading into user acceptance testing (UAT) on one project I had only planned 20 hours of assistance on our side to help the customer plan for and prepare for this critical activity. It was clear I should have planned for more but the customer knew from kickoff that we were only planning 20 hours of UAT help. The customer was so ill-prepared…and yes I learned a lesson from this. It was painfully obvious they needed more than 60 hours of our time and that extra 40 hours amounted to about $6k. Not a budget breaker, but I gave it away and it helped me to get a much larger dollar figure pushed through as a change order later in the project. It served as a nice negotiation chip with the customer while not decreasing their level of satisfaction since they knew they had already received some free work.

Summary

There are some things we can do aside from the status quo that can help our project’s financial health along the way. We have to take into consideration our project customer, their preferences, and the size and complexity of the project. By following the concepts above you’ll generally be making good use of your project dollars on every project you manage. See how you can control your project hours.

How about our readers…what tricks have you used to keep the project budget healthy and keep your project customer confidence level high? It’s a touchy subject with most project clients as the bottom line can sometimes mean everything to them…please feel free to share your thoughts.

Image courtesy of www.funzug.com

Filed Under: Multiple Projects, Project Management, Project Manager Communication Tagged With: project budget

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Founded in 1998, Entry Software Corporation has been leading the industry with service desk and project management software for manufacturing, transportation, healthcare, municipalities, service organizations, and education.

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Entry Software Corporation © 1998 to 2023