Budget Changes

Your project was all set to go. You had all the necessary approvals and signatures. You were formulating your project team and ready to proceed. Then a disaster happened and, overnight, changed the complexion of your company. Sales fell sharply as people curtailed their discretionary spending, and as a result your company' s earnings dropped significantly. Although your project is very high on the priority list—it' s a must-have for the company—your CFO tells you the project ' s budget has to be cut by 30 percent. To whom do you communicate this news?

All players involved need to know about this drastic change: stakeholders, customers, the sponsor, and especially vendors. If you' re too far into the project process, you may have no choice but to go forward with certain contractual obligations. But all of these people need to help you make the reductions that are possible.

Smaller budget changes need to be communicated to those affected by the change—certainly the team members involved, also the stakeholders involved, and always the sponsor.

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