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6 Steps to Turning Around a Financially Failing Project – Part 1

~ By Brad Egeland

Head with finance symbols and budgeting written on a blackboard

There are many ways our projects can take a turn for the worse. We can miss crucial requirements early on, leaving us to duke it out with the customer over who is responsible for the oversight. Processes can take much longer than anticipated, throwing our timeline way off schedule. We can have our project team poached by other "more critical" projects that need a particular skill set right now-the list can go on and on.

One more way – and it too can happen for a great many reasons – is for our project budget to spiral hopelessly out of control.

Now, just to be certain, there is no quick fix or magic wand that will make the project budget problem go away. At least not short of some very large and lopsided change request from your big-spending-project customer with bottomless pockets. (If you find that customer, please send him my way.)

But there are some actions you can take to gain control over a budget that isn't too far gone or to make strides on gaining some degree of control—even over a project budget that seems hopeless.

I'm sure there are many strategies – and I'd really like to get your input on steps you've taken personally to get the project financially back on track. For now, though, my personal list will be limited to six.

This post will cover the first three:

1. Share, Share, Share

I always say…share the financial information with your team – and anyone of importance charging time to your project. The more they see real numbers, the more likely they will be accountable for an accurate reporting of their time and effort to your project.

What do I really mean by this? At the end of the week, that last 5-10 hours of time that project team members know they worked but really can't account for have to go somewhere. And that somewhere is going to be the project whose project manager is NOT watching the financials like a hawk.

If you discuss financials and any concerns with them regularly, then your project will not be the one to get those "grey" hours charged to it. Trust me on this one. Better yet, try it, and see for yourself.

2. Look for Revenue Opportunities

This is an obvious one. I'm sure your execs have drilled it into you, but always look for new project revenue opportunities. For example, say you're mostly performing the project remotely. However, the execs really feel more comfortable with the tech lead being onsite full time.

This presents an opportunity for you to put in a change request. How? Propose that tech lead as a full-time, dedicated, onsite resource for the remainder of the project.

I did that on one project with a business analyst. The result? It generated a quick $130,000 injection of revenue into the forecast and helped increase overall project profitability.

The lesson here is that you never know what your project clients are willing to pay for until you try. The key is to ensure it is something that will provide client benefits and might be filling a need you identify. Otherwise, they will think that you are just trying to pry money out of their hands.

3. Review Past Invoices

It never hurts to review old invoices. I did that once out of desperation on a financially unstable project—and found over $25k in unpaid invoice items. They were just oversights, but it happens.

Every penny helps get the budget back on track.

These are the first three of my six steps to turning around a financially failing project. In part 2, I'll cover my final three…and then await your awesome input.

Thanks!


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