Your project budget can regularly end up in the financial cross-hairs. While careful budgeting is a priority for every project management consulting professional, there will be times when others in your organization want you to cut costs beyond what you think is reasonable. If you find your budget is under serious fire, use these tips to defend your resources and protect the success of your project.
Explain what your project budget includes. It isn’t always obvious to those outside your core team exactly what’s included in a project’s scope. By showcasing everything your project will accomplish, both near-term and in the months or years ahead, you’ll demonstrate the true value of each dollar allotted.
Highlight costs you’ve already cut. Your current project budget is better able to withstand scrutiny if you can name a number of costs your project management team has already chosen not to support (premium materials), or has skillfully avoided (expedited shipping).
Demonstrate your bargaining success. Were you able to negotiate better-than-market material costs? Use an industry group’s buying power to reduce labor expenditures? These savings show that your budget has already undergone the right level of value engineering.
Leverage third-party bench-marking data. Offering comparisons to past internal projects is helpful, but the objectivity of outside comparison data is an even more powerful persuasion tool. Information is generally available by industry, company size, project type, and region.
Show the consequences of additional cuts. Negative impacts to end users, the reduction of future cost savings, and the loss of your organization’s market position are all serious consequences—are the cost savings worth it? If your project will result in cost reductions (in manufacturing expenses, materials, energy consumption, headcount, or anything else), then now is the time to add up those dollars. Today’s financial impact may look more prudent when compared to reduced expenditures in the future.