Staying within timeframes on the project is difficult. It seems like there are always challenges that are threatening to knock the project off schedule. However, I strongly feel that the project budget is even more difficult to keep in line. When timeframes stray, that affects the budget. When resources become problematic, that affects the budget. When the customer stalls, that affects the budget. There are few things that don’t affect the project budget positively or negatively – usually negatively.
That being said, in my opinion, there are some general misconceptions about project budgets and project financial forecasts that I’d like to touch on.
You can trust your team to charge time accurately
This one hits home to me not just because I run projects because I also have to charge time to them. You know how it is when you reach the end of the workweek and you’ve been busy so you haven’t been logging your time on a daily basis (does anyone really do that consistently?). You waited till Friday afternoon – or worse, Monday morning – to distribute your time charges to the various projects that you’re working on. It’s next to impossible to accurately log your time against each project for the entire week at this point. You can probably account for 80-90% of it accurately, but after that, it’s a blur. But you know you worked 50 hours so you’re going to charge 50 hours. Where do you put the time?
Well, I’ve found that it usually gets charged to the project that it will most likely ‘disappear’ in. That means, the project run by the project manager who doesn’t watch the budget close enough to notice. I can tell you, that’s not going to be me! I let my teams know what the budget status and the budget forecast is each and every week so they are not only aware, they also realize that I go over it with a fine-toothed comb. No stray time is going to get charged to my projects and throw my project financials off course.
The customer doesn’t want to know the bad stuff
Project managers often fear to give the customer bad news about the project's financials. Indeed, it’s the customer’s money you’re using so it isn’t fun telling them you’re over budget and there’s a problem. But the customer actually does want to know this….because it is their money and they are part of the project team and they may be able to help with corrective action. They have a definite stake in the project’s success. Don’t discount the customer’s interest in the issues and their willingness to help. Usually, your project sponsor is being watched by his management just like you are so successful on the project means a lot for his career as well as yours. Trust me, they want to know the bad stuff and they may be able to help.
Nothing can be done about an out of control budget
I feel that this is a bit of a misnomer because if you do it right and manage the budget closely by forecasting and re-forecasting weekly the budget can never get too far out of hand. There are catastrophes out there – I realize that. But monitoring the budget and forecast closely, keeping your team and the customer updated regularly on its status, and never being too stubborn to ask for help will go a long way in making sure you can usually reign in a budget that starts to get out of control.
Who cares about the budget if the project must get done?
You think your project is so big and so visible that the budget doesn’t matter? You think that just because it HAS to get done, that means that it HAS to get done no matter what the cost is? Wrong. That sort of thinking will get the project manager replaced on the project very quickly. The customer cares. Your senior management definitely cares. Don’t be fooled that your project is the one that is so important that it will go on with you in charge no matter what it is costing. Keep the budget in line. Don’t bury your head in the sand.