Here are a few things you can consider when having your project budget cut, as recently happened to me.
1. Reduce the Scope of the Project
Find out what is acceptable to your customer and agree on a reduction in scope. It will depend on the type of project and whether this is possible. For example, you may be able to use cheaper fixtures and fittings.
2. Reduce Your Costs
What costs can you cut using cheaper suppliers? Some areas to consider are transport costs, plant hire, material costs and casual labour.
3. Use More Productive People
If you find some of the people on your project are inexperienced and less productive than the more experienced ones, swap them out. The more experienced resource may be more expensive but often counter the extra cost with increased productivity.
4. Use Your Contingency
If wise, you will have included some contingency costs in your original budget. It is pretty usual for a 10% contingency to be included to cover risk and uncertainty.
5. Do Unpaid Overtime
You may be able to persuade your team to carry out some unpaid overtime. Use of this option should be a last resort. People's goodwill can only stretch so far.
Whatever you decide, you will need to use strict budgetary controls to stay on budget.
Do you have any suggestions on how to handle an unexpected budget cut?
This forum is for members to share and gain knowledge of Project Management. Got a question about project management? Need help with a problem? Wish to offer tips and advice? Post here.
1 post • Page 1 of 1