A Budget Gives You Freedom
In Let’s start with a plan: The Roadmap, we discussed the importance of a project roadmap and how it can give you and your team clear direction on what to accomplish together. However, in almost every organization, there is a near endless amount of projects to be done. After prioritization, the size and number of projects that can be tackled in parallel generally comes down to budget.
Many of us have grown to loath budgets. Whether they are seen as administrative overhead, untrustworthy and always changing targets, or unyielding overlords blocking our business goals, they’re usually met with a fair amount of angst.
Pack all of aforementioned feelings above into a thousand-row, multi-tabbed excel file, and you’re generally left with dubious outdated information at best.
Well, hopefully, your budget tracking is a little better than described. If it’s not, it may be a great opportunity to take a look at Fairview to get a handle on the projects within your roadmap and how you can plan them against an organizational budget and free yourself from the worry of outdated or simply wrong information due to broken excel formulas and silo’d information.
What is important to know?
- How much you have to spend and within what time frame.
- What is the spend for individual projects.
- Exactly when you’re over budget and what is causing it.
- What levers you can pull to bring projects back into budget.
Let’s tackle each of these with Fairview and see how we can quickly get the answers we’re looking for.
How much you have to spend and within what time frame.
Defining a budget is a critical first step. For mature companies, this may involve carry over from the previous year and several financial meetings with the finance department, C-suite, investors, etc. For smaller companies, you may simply want to start with a number that seems palatable and adjust accordingly.
Within Fairview, simply click Settings > Settings Actions > Add Budget. Next, give your budget a name, start date, end date, and amount to cap the budget at.
Click the Save Details button, and voila, your budget has now been created. Projects with assigned resources that have expenses specified will begin aggregating all of the cost against the budget for days worked within the budget timeframe.
What is the spend for individual projects.
It’s easy to see individual project financial information in Fairview, whether it be when viewing projects in a list (Figure 2), or when looking at the details of a project you can view both estimated expense and planned expense in the Budget Tile (right side of Figure 3).
Exactly when you’re over budget and what is causing it.
There are several ways an organization can go over budget, and often it happens in very small changes over time without being very evident. All of the following are sneaky ways that cause budget overages:
- Additional scope added to in-progress projects.
- Execution delays (either technical or critical path complications).
- Unexpected non-labor expenses.
- Shifting resources on and off projects without realizing costs until future net terms or end of month tracking.
- Project shuffling cause execution delays.
With the Fairview Gantt chart, you can immediately see that you’ve overrun the budget and even exactly what day you will be out of money given the current planned expenses.
Notice the red curtain with popover showing this particular budget of $250,000 will be out of budget on 5/18/2023 and the overall planned amount is $310,096.
What levers you can pull to bring projects back into budget.
To get back into budget, you can remove resources, replace resources with less expensive options, reduce project scope and thereby duration, or push some projects out to the next budget period. All changes within Fairview happen in realtime and provide immediate feedback as to whether the budget expenditure has adjusted to an acceptable level.
What’s Next?
Now that you have wrangled your projects and their supporting budget, it’s time to focus on the people themselves. We’ll cover that in a blog post coming soon.
