The dreaded budget meltdown and flame-retardant suits

As the principal partner of Solutia SDO, Jackie Clark has had a direct role in managing the people behind the technology that’s transformed businesses across Canada. When IT projects stall, this seasoned leader, who’s had a front seat watching tech transform business in Canada, knows how to manage people to get projects running again. This bi-weekly column is for leaders working on enterprise-wide projects searching for insight on navigating the issues and pain points that hijack success. We’ll be sharing the most common questions Clark hears from her clients and her responses to them. Do you want your project management problems solved? Leave a comment with your question or  Tweet Jackie @sdosolutia.

My project budget is out of control and I’m not getting any support from my client to help get it back in line. What should I do?    

How many times have you had this conversation?

Client – “The business wants to add this extra requirement to the project.”

You – “OK no problem. I’ll get a workup of the impact to the cost and timeline to you asap.”

Client – “Impact? What impact?”

You – “Um… you’re increasing the project scope. The existing plan won’t work anymore. Unless you want to swap out something to accommodate your new requirement?”

Client – “No, I need everything. And I have no more money and the delivery date can’t change. You need to make it happen. That’s why I pay you the big bucks.” (OK maybe not the big bucks part).

Of the triple constraints – Scope, Budget and Timeline, change to any one presents a significant challenge but budget is the one that can make even the most confident Project Manager break into a cold sweat as soon as the financials slide appears on the screen at the Steering Committee meeting. You’re an excellent PM and can easily explain the reasons for the increase in budget (I’ve never reported a decrease in budget unless it’s because the project was cancelled), but the only thing the committee hears is the bad news about looking for more money in an empty wallet. What makes this situation really unfair for the poor PM — now being booed and pelted with rotten fruit —  is they rarely own the budget. Often the cost has been conjured out of thin air before the project is out of initiation phase or development dollars are shifted around at the executive level without input from the project team. Beyond efficient management of the plan, the PM is simply tracking and reporting the budget. It seems like a no-win scenario.

So what can a PM do? A few tips.

  • If you’re in the middle of a project with a busted budget, the best thing you can do is be very diligent, seamless and truthful about reporting project status. You may be tempted to sugarcoat to avoid continued conflict but don’t do it. If the problem was not of your own making (if it was then that’s another story)  this is when you can really showcase your skills. Have the courage to tell it like it is and most clients will ultimately thank you for it. And you’ll leave that assignment with a clean record and no regrets.
  • To try to avoid this situation in future gigs, include a number of questions about the budget process in your interview. Ask about the company ‘culture’ regarding casting and refinement of budgets and, if possible, any details that can be shared regarding other projects and thoughts on how they were managed from a financial perspective. Talk to other PMs who have worked with your perspective client. They will provide the best intel on their experience with managing the budgetary aspects of the project.

Lastly, buy a flame-retardant suit!

Jackie Clark
Jackie Clark
Program and change management expert in digital and data transformation, and technology system reengineering.

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