Overview
Project delays often stem from slow mid-project budget approvals. Executives can mitigate this by setting clear processes, defining data expectations, and keeping budget changes aligned with strategic goals.
Why Mid-Project Budget Adjustments Matter
Strategic projects typically undergo detailed and thorough planning, but that doesn’t mean these high-impact efforts are immune from common challenges such as unexpected budget variances. Financial planning and allocation efforts may occasionally miss the mark on expenditure forecasts or timing. In other cases, the project team might encounter circumstances that couldn’t be anticipated during the budget development process, such as geopolitical instability or anomalous weather complications. Any of these events can easily consume project dollars beyond what was originally allocated.
It can take a lot of time and effort for mid-project budget requests related to these variances to make their way from introduction to review to approval. A protracted process that results in delayed approvals can have unwelcome consequences, including loss of productivity and missed market opportunities while awaiting budget decisions, plus a drop in team moral if resources remain uncertain for too long.
Executives have significant influence over project budgets from the earliest planning stages. That high-level leadership and guidance is also a huge asset in shaping a framework for mid-project budget reviews. The senior staff can help establish processes that eliminate approval delays and instill confidence in project budget decisions made at every stage in an initiative’s lifecycle.
If your team struggles with budget issues on strategic projects, consider how executives can help streamline and expedite the mid-project budget adjustment review and approval process.
Establish a clear process for rapid budget reviews and adjustments.
Many original budgets require some in-progress adjustment to reflect the project’s reality. One way that organizations can handle these situations efficiently is to create a framework that defines pre-approved thresholds for common variances. These could be based on dollar amounts or the type of expenditure (shipping costs for budgeted equipment, extra labor costs tied to an already-approved vendor contract, etc.). The mid-project budget review process can also benefit from streamlined escalation protocols for expenditures that don’t fit the pre-approved framework. This reduces the risk that budget requests, particularly those that are time sensitive, might experience delays because there isn’t a formal process available to follow.
To ensure efficiency in mid-project financial decisions:
- Develop a framework with pre-approved thresholds (e.g., cost caps, pre-authorized categories like shipping or labor).
- Introduce streamlined escalation paths for expenditures outside the pre-set rules.
- Define who can approve what, and under which conditions.
Having a prebuilt process minimizes time lost in figuring out “what to do next” when cost overruns occur.
Define the data that’s expected (or required) for mid-project budget variance requests.
The review process should include clear documentation requirements for budget change requests. When everyone understands the details that are needed for justification, there’s less chance that incoming requests will be submitted without proper documentation or that mid-level managers will halt the submittal because each has a different concept of what’s required.
The same holds true for the executives responsible for reviewing mid-project requests. A senior staff member who’s misinformed or confused about the information that should accompany a request could delay the process unnecessarily. Documentation requirements may vary based on expenditure levels, the type of supply or service, or the type of project. Details to support a mid-project budget request could include market analyses, communications from government agency announcing relevant policy changes, or ROI projections related to the variance request.
A lack of standardization can stall approvals. To avoid that:
- Set clear documentation guidelines for all types of requests.
- Ensure consistency in data expectations across departments and leadership.
- Tailor requirements based on request size, type, and project category.
Typical supporting data might include:
- ROI forecasts
- Vendor cost shifts
- Regulatory or policy updates
- Market trend analyses
Standardized input results in faster, more confident decision-making.
Maintain the focus on strategic objectives.
Project stakeholders want to see their projects succeed, but many work at a distance from the organization’s overall mission. When a budget variance request comes in, senior leaders can provide a closer perspective to ensure the change—its triggers, effects, risks, and benefits—aligns with the project’s strategic objectives. Executives have deep insight into how strategic projects fit into the pursuit of top-level goals, which gives them a unique view on budget request priorities. Bringing this perspective helps frame mid-project requests and can influence whether the investment of additional dollars will be fruitful or whether the request doesn’t align closely enough with the direction of the business to justify the outlay.
Executives offer a unique, enterprise-wide lens that helps evaluate whether budget variances:
- Advance or hinder long-term organizational goals
- Support critical deliverables or introduce scope creep
- Justify investment versus risk
By applying strategic filters, executives ensure resources are directed toward initiatives that move the business forward—not just short-term fixes.
FAQs
What causes most mid-project budget changes?
Unexpected expenses, forecasting inaccuracies, and external disruptions like policy changes or severe weather are common causes.
How can executives speed up budget approvals during a project?
By creating a clear approval framework, defining data requirements, and aligning reviews with strategic goals.
What kind of data should accompany a budget variance request
ROI projections, market data, policy changes, and vendor communications can support the justification for adjustments.
What’s the risk of a slow mid-project budget review?
Delays can lead to productivity loss, missed market opportunities, and declining team morale.
Should all budget variance requests go through executives?
Not necessarily—smaller or pre-defined variances can follow expedited paths, while larger or strategic changes benefit from executive oversight.