5 Ways To Defend Your Project Budget

Project budgets are regularly in the financial crosshairs

. While careful budgeting is a priority for every project management 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 budget includes. It isnt always obvious to those outside your core team exactly whats included in a projects scope. By showcasing everything your project will accomplish, both near-term and in the months or years ahead, youll demonstrate the true value of each dollar allotted.

Highlight costs youve already cut. Your current budget is better able to withstand scrutiny if you can name a number of costs your 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 groups buying power to reduce labor expenditures? These savings show that your budget has already undergone the right level of value engineering.

Leverage third-party benchmarking 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 organizations market position are all serious consequencesare 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. Todays financial impact may look more prudent when compared to reduced expenditures in the future.

by: PMAlliance

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