Budgets are interesting things. In larger organizations almost all decisions are controlled by some sort of budgeting or expenditure controls. Regardless of what process your organization is following, the success or failure of a project is often determined by getting it done on time and on budget.
When costs start to get out of control, there are a number of ways to deal with the issue. Here are some best practices to consider when you are faced with this issue.
- Communicate the budget overrun issue and announce you will be reviewing the project with the team to determine actions
- Determine how much the budget overrun is going to be and it’s impact
- Revisit the ROI analysis (if there was one) for the project and determine if the cost/benefits are still there even with an overrun in costs
- Determine the impact on goodwill/business opportunity with the customer (whether internal or external)
- Review where costs can be cut without impacting quality of outcome of project
- Consider the delivery timeframe and any penalties that may be incurred by delays in delivery
- Remake your plan and gain agreement with the team and customer to show how changes will impact the overall schedule and costs
- Update and communicate any changes to all team members and customers
