Have you managed a project that failed due to budgeting issues? Do you know that nearly 70% of all projects fail and out of them 55% of projects fail due to budget overruns. Willowtree is a digital first company that helps clients build world class products that gives them the competitor advantage. At Willowtree, we work with clients from different industries, different product needs and different budgeting needs.
For the last few months, my team focused on building a unique DEI tool for one of our clients. The goal of my project was to deliver a high quality web based DEI tool in a limited budget. Tight budget often leads to multiple constraints such as less room for scope expansion, limited resources and inability to extend the project timeline. So essentially, I was running a project with these 3 constraints:
Given that the product we were developing was distinctive and one of its kind and may eventually lead to become a disruptor for DEI related issues, my team had to ensure that despite these constraints, we delivered a world class product, i.e, the quality of the product had to be premium.
Therefore, here are my 5 tips for managing a low budget project successfully:
1. Define MVP(Minimum Viable Product)
When you know a client has a restricted budget, make sure to define the scope of the project at the very beginning so that the client and the team is aligned on expectations and has a clear understanding of what needs to be delivered. This means that the project team and the stakeholders spend enough time to build a deep understanding of the product needs and requirements. Therefore, the first step to effectively manage the project deliverables within the given budget and the timeline is to ensure project requirements are accurately identified, documented and agreed upon with the client stakeholders.
2. Open Communication
As a project manager, you’re responsible to ensure that both the team and the client is informed of any project decisions and is on the same page. Creating a Gantt Chart and defining milestones can help bring alignment across both internal and external teams. Additionally, regular agile team meetings and stakeholder/client meetings will be critical in keeping the lines of communication open and keeping everyone on track and up to date. At Willowtree, project managers also deliver weekly executive reports with the project status, key updates, risks or blockers, mitigation plans and upcoming events/meetings to make sure that the client stakeholders are fully informed and have clarity into the project progress.
3. Creative Resource Allocation
One of the biggest challenges with a tight budget project is that even if the project needs additional resources to speed up the project deliverable timeline, one cannot assign more people to the project. As a result, when timelines are strict and the scope seems less achievable, the existing team is required to stretch their hours to meet the deadlines. As a good project manager, you want to avoid this situation where your team is overburdened and is burnt out. In order to avoid this situation, you can get creative with your allocation of team members on the project. For instance, as my content designer’s and product designer’s deliverables were completed, I requested them to either be allocated at 50% capacity or be unallocated from the project. This allowed me to open up some budget to assign an additional test engineer at 50% capacity to help my team to speed up with the testing efforts. Therefore, it's important that PMs continuously review the no. of people working on the project and reforecast the allocation needs as often as possible to make the most optimum use of the project budget.
4. Avoid Scope Creeps
According to the PMBOK Guide, “scope creep is the uncontrolled expansion to project scope without adjustments to time, cost, and resources.” Nearly 50 percent of projects experience scope creep, and only 57 percent finish within budget while only 51 percent are finished on-schedule. (Source: Goskills.com) Almost all projects at some point face some kind of scope creep and given some favorable circumstances, it is sometimes easy to control the scope creep. However, with a limited budget project, there is zero room for scope creep. Therefore, it's of utmost importance that the project scope is always in control and additional feature or function or requirements requests are not included either by the project team or by the client. By continuously reviewing the MVP, the agreed-upon feature list and the Gantt Chart with the client and the team, the project manager can ensure to avoid any scope creeps.
5. Revisit and Re-forecast
Last but not the least, a project run without effective budget management and re-forecasting can lead to project failures. Therefore, it's extremely important for the project manager to frequently review budget plans, especially for the tight budget projects, to avoid any overruns. One of the challenges on my project was that even though we were successful in defining the MVP and keeping the scope under control, some of the technologies we were using were new to my team members and we were constantly hitting roadblocks which was slowing down the project. As a result, it became even more important for me to keep revisiting the budget to understand how much additional time was needed to deliver the product and the impact it would have on the resource allocation. Therefore, I was reviewing the project budget on a weekly basis and monitoring the project resource usage to ensure that we were fully utilizing the people we had on the project and if we had the right people for the rest of the project. Thus, it’s of utmost importance that project managers regularly revisit resource forecasts and project needs to ensure that the project is on track.
Delivering a quality product within the project budget and timeline is a constant struggle for project managers. The onus is on the project manager to ensure that the project team and the client stakeholders are aligned on the project requirements, deliverables and timelines. If you want to successfully deliver a low budget project on time, it is important that you continuously review the project budget, forecast the resource needs and communicate openly with your team and the client.
