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Once again, I need to reduce the budget. Is there a systematic way to begin?
Answer: C. Look at your budget systematically to locate errors and pinpoint places to cut. Often a project manager begins to cut deliverables to save money without checking for errors in the paperwork. Double check this list before you pronounce your budget unworkable. Calculation errors. Even with spreadsheets or automated software, one small data entry error, such as an extra zero or misplaced decimal point, can make a project appear thousands of dollars over budget. Check the math on your cost per use items. If you have inadvertently typed or written $50 per item instead of $5 for 1,000 items, you will show a $45,000 overage that it isn’t real. ($5 x 1,000 = $5,000) ($50 x 1,000 = $50,000) ($50,000 - $5,000 = $45,000 error) Check your resource rates. If you intended to use Mary on the team but only Joe was available, did you change the resource name on your records but neglect to change the rate? Joe at $10 per hour won’t cost nearly as much as Mary at $40 per hour. However, remember it may take Joe a few hours more, since his lower rate may reflect newer skills and less experience. Look at fixed costs. Make sure you haven’t added fixed costs as a firm expense to the project and then also added it to calculate as a per use item. Sort costs from highest to lowest. Is there a way to find a more economical vendor, negotiate a volume discount, or substitute internally developed items for those with the highest costs? Adjust schedule. Check with team members to see if their initial estimates might be high, now that they know more about the project. Look skeptically at the activities with the longest duration times. They may indicate a very general “guess” at how long the task will take. Shorten activities. See if activities can be broken into smaller pieces. This could allow you to change task relationships and shorten the schedule. Check constraints. Do the software or paper plans for your project show an excessive number of Must Finish On or Start No Earlier Than designations? Rethink whether those limitations are really mandatory. Remove them to allow yourself to use resources more economically and move the project along quicker. Make a RAM. What?! You learned about Resource Assignment Matrixes, but you don’t really prepare them? Create a chart showing the time span of the project and the team roles needed day by day. You may find you are short a programmer for the first three weeks, and add extra help at that point. Then you can move that teammate on to other projects, saving you precious payroll hours. Have a standardized process for checking each project budget, even if it isn’t excessively high. If after you check the budget remains too large, you can ask for a larger budget or cut back on project scope or quality. The project manager who routinely scrutinizes the paperwork to make sure the cost of the project does not contain errors or unnecessary budget expenses is one who can feel most proud.
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Quick Quiz 
Barbee Davis, MA, PHR, PMP, is a reviewer for the global PMI Registered Education Provider Review Team. She owns Davis Consulting and is a published author, speaker, writer of training materials and an innovator in presentation skill workshops for corporate trainers. She holds a Black Belt in MS Project and teaches at the university level. Ms. Davis encourages your | Home BACK TO TOP
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