ETC + ACWP = EAC
11 Manage projects with no budget carefully
You can buy whole books about risk management, critical path analysis and soft skills, but there is very little written about managing project budgets other than the odd chapter in general project management books (like this one). That is symptomatic of the fact that the majority of small projects, especially those without IT involvement, are run without a specific budget, around the edges of a manager’s day job. Any costs have to come out of the business-as-usual provision, which means there is no allocated project budget. So when your project has no budget, how can you keep a budget on track?
N O T C O U N T I N G T H E P E N N I E S
‘When our branch manager told me I had to set up an online system to run the quarterly quality assessments for call centre staff with no budget, I admit I wasn’t happy,’ confesses Gordon Harvey, an IT project manager at a travel firm. ‘Partly because I didn’t think it would be possible and partly because I’d just finished running a project with a budget of £100,000, so I felt it was a bit beneath me.’ The company’s customer-facing staff undergo a rigorous assessment every three months to check they are providing a top-quality level of service to travel customers. This process took up a lot of time for team leaders, and the paperwork involved made everyone dread test week.
Harvey thought creatively about what could be an appropriate solution and drafted in a part-time team member from IT to help. ‘We were a project team of two – me and one other – and we were both only working on this project two days a week,’ Harvey explains. They needed to find something simple, quick and, more importantly, free. The obvious solution was to take advantage of the company intranet, but it had never been used in that kind of way before. Harvey was unconvinced that his IT colleague had the skills to build something complementary. ‘By chance, I was talking to someone else in a different branch about a different project, and he happened to mention they were in the process of building a database to hold customer satisfac
tion scores,’ Harvey says. He immediately saw a link between the customer survey data and the type of service questionnaire the call centre agents com
pleted four times a year. The database was being created in conjunction with the marketing team who were managing communications to the customers.
Harvey put a call in to the internal equivalent – the internal communica
tions manager. ‘She was interested and helpful in a reserved way,’ he says,
‘but didn’t have any resources available to help practically. What we really needed was a comms professional who could spend some time with the marketing people from the other branch to find out how we could apply the
Project Management in the Real World
same logic to the customer service questionnaire.’ Harvey got on the phone to his sponsor and explained the difficulties they were having. Some negoti
ations took place at a senior level, and Harvey found himself with the comms person he wanted working on the project for a day a week. In return, he later found out, his sponsor had promised to move the resolution of an outstand
ing technical issue that was affecting the internal communications team higher up the priority list. Harvey got the specialized resource he needed, and internal communications benefited too: no need for money to change hands or resources to be formally purchased, and the project stayed within the day-job confines originally prescribed – only with a little extra help.
Projects with no specific financial amount attached to them are normally expected to be delivered using just the resources available as part of a day job. That basically means drawing on the people around you to do whatever it is that needs to be done. Having a project with no budget takes away some of the financial headaches but doesn’t mean you are in for an easy ride. You will still have deadlines to meet and requirements to deliver.
W A R N I N G
In some respects no-budget projects are harder to deliver, as you cannot throw money at a problem to make it go away;
nor will your team have access to overtime payments if things start to slip.
If your sponsor hands you a project and then says ‘There’s no money available to do this,’ count to 10 and try to avoid spitting ‘You must be joking!’ Ask them how they expect it to be achieved. A sponsor who is serious about a project will already have thought about what they consider to be a reasonable investment for a successful delivery. Take them through the questions below and start to work out where your boundaries are, particularly in relation to the people to whom you have access and the amount of time you and they can be expected to spend working on the project.
S P O N S O R Q U E S T I O N S F O R N O - B U D G E T P R O J E C T S
• Am I full-time on this project?
• If not, what percentage of my time do you expect me to spend on this?
• Do I have any full-time resources?
• If not, what percentage of their time do you expect them to spend on this project?
• For any resources not under your control, has their manager agreed that they will be working on this project?
• Can any costs come out of the business-as-usual budget?
Manage projects with no budget carefully
• To what limit?
• Who will authorize this?
• If the business-as-usual budget is not available, how do you want me to deal with unforeseen actual expenditure?
• At what point does the project become unfeasible?
• When does the resource investment become too much for your intended deliverables?
Once you have a clear idea of where your sponsor believes your boundar
ies are in terms of consumable resources, both business-as-usual budget expenditure and time, you can begin to work on the project within those constraints.
H I N T
Make sure any assumptions or constraints are written into your project initiation document. For example:
• The business-as-usual sales budget will cover the cost of reprinting a new edition of our catalogue.
• The schedule has been produced assuming no overtime is available.
• All resources will be available as necessary.
• The system changes can be achieved using the mainten
ance budget.
W A R N I N G
When you are not buying your resources formally, and they work for someone else, there is a risk that their own day job will take priority over the project. Despite good intentions, there will be times when staff shortages, increased workloads or other short-term crises drive your team back to their normal activity. If you can, schedule contingency time to keep your resource planning flexible. Always include an item in your risk register about the possibility of resources being pulled off the project. As a minimum, each time you review the register, it will prompt you to look at the current situation and see whether you need to take any action.
Project Management in the Real World
W A R N I N G
If at any time the project looks like it will have to spend real, tangible money and you don’t know where it will come from, raise this immediately with your sponsor as an urgent issue.
G O L D E N R U L E S
Even if no specific budget is available for the project, cla
rify with your sponsor what they consider to be a reason
able investment in terms of time and work within those doc
umented constraints.