The Project Notebook

Just Think of all the Money That We’ve Saved!

By: Susan Peterson, M.B.A., PMP
Copyright 2013, Susan Peterson, All Rights Reserved
No part of this article may be used or reproduced in any manner whatsoever without written permission of the author.

Organizations continue to enforce relentless cost reduction efforts in the face of global competition. Given the emphasis on minimizing costs, virtually every project manager has had at least one project budget that is woefully inadequate. After so many years of hearing “less is more”, “lean and mean”, and other well-worn clichés, project managers have come to expect that initial budgets will seldom be realistic to achieve expectations. This article explores some legal “creative financing” options to address the challenges of underfunded projects.

The “Right” People

Quantity and quality are not synonyms in the project management world. While selecting the right human resources for a project does not necessarily mean getting the most “expensive” personnel, acquiring those people with appropriate skills and relevant expertise does take concerted effort. It means taking time to carefully review resumes, to conduct meaningful interviews, and to ponder the potential effectiveness of the mix of people on the project team. Of course, the “right” people are typically in great demand to participate on multiple teams. Therefore, a project manager may need to rearrange activities and/or dependencies so that the appropriate people can participate. Typically, a few “good” people can outperform a large number of lesser talented resources in a shorter time period. Rescheduling is well worth the effort when it results in fewer personnel costs as well as a shorter time to implementation.

“Time is Money”

In an attempt to keep costs at a minimum project managers are often given completion dates that are unrealistic. Organizations believe that an aggressive timeframe keeps everyone motivated and does not allow for the cost overruns often associated with lengthy projects. Competitive pressures may also drive a tight time schedule. After all, being “second to market” is not a goal for most companies. In the face of this focus on time project managers need to assess what really needs to be accomplished on a project. This assessment needs to be made before developing the project schedule so that any tasks that are not essential to complete the core requirements can be eliminated. Too often project managers attempt to complete “everything” that is requested. In this futile effort the project may actually not accomplish anything concrete. In such situations the project either has to obtain more money in order to complete anything or has to be severely downsized or even scrapped. Any of the preceding three situations means that money has been wasted. It is better to complete a basic deliverable than to deliver only promises.

“We Can Fix It Later”

Every project includes some interim deliverables prior to the final deliverable that do not turn out as planned. The tendency is to say, “We can fix it later”. However, “later” seldom comes, and so the inadequate interim deliverables do not meet expectations. If an interim deliverable is part of a larger downstream deliverable, there can be a cascading failure effect. (Remember the Challenger’s “O” rings?) Even if the interim deliverable stands alone, its implemented version may not be used or worse yet, may result in a “work around”. The potential for interim deliverable failure needs to be a part of proactive contingency planning with scheduled backup tasks and resources to address those deliverables that truly need fixing now not later.

In summary, there are creative methods to stretch budget dollars effectively. While the tendency is to focus directly on costs, the concepts discussed in the above article represent some other types of actions that can be effective when project budgets are anything but realistic.

Susan Peterson, M.B.A., PMP, is a consultant who manages diverse programs and projects in both the private and public sectors for individual organizations and consortia. She also conducts enterprise assessments of project portfolio management practices. Prior to establishing her consulting practice Susan led major efforts for Fortune 100 organizations throughout the United States. She teaches the Project Management Simulation capstone course in the University of California, San Diego, Project Management certificate program and is a member of the curriculum advisory committee. She can be contacted at

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