Project management isn't easy - especially when you have to ask for additional funding to cover unforeseen circumstances. Get tips here.
Even with the best planning tools, project management is not an exact science. Although you may have some wiggle room in the budget to cover unexpected expenses, there can come a time when you must ask for more money. Here are some factors to take into consideration when deciding if, when, and how to approach upper management to get approval for additional funding for a project.
Can You Shift Funds from another Area?
Sometimes, it is possible to “steal from Peter to pay Paul”. This is not always the wisest strategy, but it can get you out of a tight spot if your shortfall is not too great. Brainstorming ways to reduce expenses (while still maintaining quality) is something your team should have done already in the planning stages. However, there may still be additional areas that can be trimmed.
When you know that any additional money is liable to come with some very unpleasant strings attached, readjusting how you apply the funds you do have may be the best option. Of course, you will need to be prepared to explain to stakeholders what you have done and why. Stress how your project management team has used innovation and initiative to stay within budget when faced with adverse circumstances. This may help take the focus off of the fact that your cost forecasting was incorrect.
Pros and Cons of Increments vs. Lump Sum Requests
There are two different strategies you can use when it’s time to bite the bullet and ask for more money. On the one hand, you can ask for small adjustments to the budget over a period of time. The upside of this approach is that the “sticker shock” won’t be as high. On the down side, you may earn a reputation for constantly having your hand out for more funding. Eventually, you will run into a brick wall and no more money will be forthcoming. No one will believe you when you reassure them that you really have a handle on the true cost of the project now.
The other option is to wait to ascertain the full extent of the additional costs before asking for help. This means you only have to deal with the awkward questions and potential backlash once. However, if the extra costs are too extensive, you may be turned down flat or face other serious consequences that will hamper your ability to deliver. You may also be asked why you didn’t bring forth the issue earlier on. This is one of those times in project management when you must choose your approach based on how well you can predict the response from the people in your organization who hold the purse strings.