3 Ways to Get Your Project Management Budget Under Control
How do you define the success or failure of a project? For many, a successful project is completed without delays, changes in the budget, or unnecessary costs. As a project manager, you have to continually think about your budget throughout the duration of a project.
If your budget comes in too low, the company could be forced to pay penalties or higher premiums to government organizations or regulatory agencies. Furthermore, significant changes in the budget could impact the reputations of the company and the project manager. However, project managers can work to get the project management budget under control by following these three tips.
1. Reforecast Often
The budget is not static. It changes and grows as the project moves into the future. Changes in the cost of materials and labor and accessibility deviations can severely alter the budget. However, project managers cannot realistically take these concerns to stakeholders and upper-level management as soon as they occur. Project managers should re-evaluate and conduct a new forecast for the budget on a schedule.
For example, the project manager may revisit the budget every week, upon the completion of 10 activities or tasks, or when milestones are met. However, the budget may need to be visited more or less often. At this time, project managers can express concerns to stakeholders and upper-level management.
2. Keep the Project Team Involved
Project managers have a tendency to take full responsibility for any changes in a project. Although beneficial, this doesn’t help ensure the timely, successful completion of the project. Furthermore, this cuts out contributions of the project management team. However, project managers who keep the project team involved are more likely to keep a project within budget.
Project team members who understand budget constraints and surpluses will more carefully watch how their responsibilities impact the project. Consider a project team member who oversees all welding operations. If this team member’s responsibility exceeds the budget, he may redistribute tasks and responsibilities to bring them within the budget.
The key to keeping project team members involved rests on communication. Project managers who communicate with their team members need are more likely to see a greater level of accountability and ownership from team members, which reduces expenses and promotes adherence to the budget.
3. Manage Scope
Changes in scope decimate a planned budget. The scope defines what will be accomplished, how it will be accomplished, and how much it will cost. Project managers who allow massive overhauls of the project scope are more likely to encounter budgeting issues.
Changes in scope should always involve a request for additional funds through a charge order or other official means of increasing a project's budget. This keeps the project within budget and allows for changes in scope.
Managing a project budget is not an easy feat, but project managers can make budgeting simpler by implementing these project management budgeting tips. If a project manager fails to follow them, the project will probably exceed the budget.
- Reforecast the budget often and on a schedule.
- Involve project team members in the project management budget.
- Manage project scope effectively and efficiently.