The Project Manager’s Challenge: Dealing with budgets based on minimal information

It’s that time again – time for companies to begin new projects in the new year. Ideas have been gathered and technology departments have estimated the effort needed, usually based on very little information. An annual ritual that is so challenging that acronyms like “SWAG” have been created to imply some of the uncertainty in estimates done at this point.

The “G” implies that a guess is as accurate as possible, based on the information known at the time. The question is: what happens to a guesstimate when it arrives further down the process after funding has been provided, and work is to begin? It usually falls to the project manager to wrestle with the original estimate and make it enough to deliver the glorious idea that will make the company millions. But, how do they do it?

 

The Earlier the Better

When the project kicks-off and subject matter experts start getting involved, a project manager needs to get a handle on what exactly the stakeholder wants, and get the next level or two of detail so the rest of the team can provide more informed estimates. Waterfall and Agile do this in different ways, but nevertheless, the quicker the project manager can identify any disparity between the level of effort and expected scope the better. Identifying shortfalls early enables budgets to be re-aligned or scope reduced, but the longer the original estimate lingers, the more upset stakeholders are when changes need to be made.

Gather as much detail as possible to explain the need for more budget. Work with the business to quantify the ask and identify scope that could be lost if the budget remains. Many times, even if the budget is not increased, scope can be reduced to fit the approved budget. Even if neither occurs as a result of the new information, at least key people have been notified.

As many a project manager knows, often even when a disparity is identified, the team is still asked to complete the scope within the original budget. This makes the project more challenging, but a good project manager has a thing or two up their sleeve to help minimize the overage.

 

Identify Efficiencies within the Effort

One of the ways to work within a constraint of this type is to find efficiencies within the project. Ask questions like these:

  • Are there things that if done together can be done faster?
  • Are there things that share the same steps so that developing those steps first allows all the other things to benefit?
  • Can testing be planned more efficiently?
  • What things can be done in parallel to shorten the timeline?

Encouraging and helping the team find these efficiencies helps everyone feel more empowered. Ideas need to be welcomed and considered. It’s surprising what people can figure out when given the right environment.

 

Reduce Lag Wherever Possible

Unnecessary lag is the killer of many a project schedule. Things like the stakeholder who just can’t seem to find time to approve the requirements; the team that can’t agree on an architecture; a key decision that can’t be finalized. All these things can mean weeks and weeks of extra time to a project timeline. A project manager can make sure these things move forward pro-actively rather than let them spin longer than they should. This also establishes a pace of action rather than waiting.

It may not seem at first that this step can impact the budget, but lags can be very costly to the project’s bottom line. Many companies assign resource by percentage and if that percentage is waiting time, the charge still comes. Multiply that wait by several resources and a delay becomes very costly.

Keeping these lags at bay requires a project manager who stays on top of follow-ups. Encourage team members to identify “due dates” for items. Most people don’t purposefully cause delay to projects. They’re busy people who just don’t know when something is needed. Tell them and then when a follow-up is sent, at least they realize they were past the requested time.

 

Communicate…Communicate…Communicate

Communication is one of the strongest tools in a project manager’s toolkit but is often used incorrectly or not very effectively. Good communication helps the budget internally with the project team as well as externally with the stakeholders.

Within the project team, keep communication open and flowing. Having a regular meeting with project workstream leads keeps everyone informed and on the same page. The last thing you need is for one member to be working on one thing while other members work on another because the whole team never received the update. Communication within the team will also build a trust that helps move the project faster as well.

If a project is in danger of not meeting scope or going overbudget, it’s best to let the appropriate stakeholders know. Communicating in an appropriate manner ensures that no one is surprised, and if they are, a reference to a previous notification can squelch objections. Honest stakeholder communication can prompt an avenue for other conversations as well. For example, an interested stakeholder may offer up funds, or recognize if money can be diverted from other efforts that are underspending. If the stakeholders don’t know of the need, then they can’t help.

 

Stay Positive

Although the original guestimate is what placed the stress on the project, it is the project manager’s responsibility to do whatever possible to still make it work. The project may still go over-budget or not have all the scope originally hoped for, but at least trying the things discussed above can reduce the shortfall. Remember to stay positive and help the project team accomplish as much as possible in a productive environment.


Kathy is a skilled Program and Project Management leader specializing in the Agile realm.  She has helped a variety of large and small enterprises across different industries transition from waterfall environments to agile ones.  Her experience is backed by several certifications including Certified Scrum Professional (CSP) and SAFe Agilist (SA).  Kathy enjoys traveling and once sang on the roof of the Church of the Nativity as part of the featured choir in their Christmas Eve Service. Learn more about Kathy and her experience by checking out her LinkedIn here.

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