Previously we have spoken about time management and scope management, but this week we take a look at something that holds an even larger risk if mismanaged - your project's budget. Project budget management is the process of planning, controlling, and executing your budget within the allowances made by your company or investors. Failure to correctly manage your budget can result in not just the failure of the venture but a consequential recoil that will hit your company and effect your future projects. This article will act as a resource to provide more information on budget handling and strategies for getting the most productivity out of your investment.
-Hunter Turner
Creating The Budget
The first step to managing your project financially is creating the budget. This process begins with a historical dig into your team and project as well as similar situations from the past. You should look at your previous projects and determine the scope and budget versus the project you are budgeting.
Alongside quantitative research it can be extremely useful to gather reflections from your team on past projects and consider what your members want to change for this project. However, you must remember that not everyone in your team will be satisfied - keeping expectations realistic is critical and give-and-take between team and managers is inevitable. Another great resource to bring in are financial advisors and experts in your field/topic. Skilled people with knowledge pertaining to your project can provide information not easily available and could mean the difference between an easy fix before starting work and a refactoring of the budget later down the line.
Managing The Budget
A project manager mustn't forget that the budget is ever evolving and omnipresent. Don't be worried to re-baseline your project as time passes and features evolve, projects rarely deliver on budget without adjustment through the development process - whether it be over or under. Just like how a budget needs to be managed constantly, so does the
resources being used to accomplish it, including your team members, your software tools, and your time. In fact, you can use the tools provided in our scope management article and apply many of them to your budget management, as in both cases you are managing a resource and fixing mistakes early before your budget bursts and creates an even larger problem.
Reviewing The Budget
We have talked about the before and during of project budget management, but the post project review also plays an important role moving forward onto other projects. Identifying unexpected results, changes in course, budget modifications, and more allow project managers to take information learned and condense it to a resource that not only provides information about the success of the project to look back on, but also a means to improve when moving to the next project.
This step circles back to Creating the Budget and completes the project budget management cycle that managers make use of, not only in the corporate business world, but any scale of project with competent managers.
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