My budget is being cut – Oh My!

All too often our project budgets are being slashed, especially in the midst of our current economic crisis. This article will provide some insights and ideas on how to best manage this not-so-fun situation.  Here are 13 succinct steps to help you get things back in order after your cost target changes.

1. DON’T PANIC!  If you panic; so will your team. 
2. Understand why the project is being cut.  If it is due to overall corporate or department wide budget cuts vs. something specific to your project delivery --- you will need to take a different approach to addressing the challenge.  If the budget cut is related to corporate/departmental wide changes the best approach to take is to show the value your project brings to the organisation.  If the cuts are due to project delivery issues – you still need to show the value your project brings to the business – and you’ll need to demonstrate how you’re going to get the project back on track. The key here is to demonstrate to management that you have the capabilities to deliver the project successfully.
3. Go back to the basics.  What is your project about; what value-add does it bring to the organisation?  Remind the senior management team (and your core team) about the great reasons this project came about.  This is a perfect time to “dust off” the original Project Charter document and any other documentation you may have that contains relevant information regarding the justification of the project. (Do this regardless of the reason for the budget cuts.)  If you did not create a Project Charter when the project commenced, then create one now.  Look at the original Business Case which should have documented the reason the project was initiated and the value it should bring to the business.  If a business case was never created – then talk to management team members that were around when the project was kicked off so you can document this information.  By showing the business value (maybe savings to the business, cost avoidance, or revenue generation) it’s possible your project budget won’t be reduced.
4. Find out what the business CAN afford.  Instead of randomly cutting your budget to see “what they will approve” – find out what is affordable and why.
5. Communicate, communicate, communicate.  During times like this the rumours will be fast and furious.  Tell your stakeholders what is going on, why, and when decisions are expected. (You might even solicit their help to restore or retain some of the project budget!)  Keep things as normal as possible until the final decisions are made.
6. Work closely with your project sponsor so they can assist you through this process. Always ensure you are aligned with one another.  Your sponsor can work with you to define the best approach to address strategic and political needs.

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