Has it ever happened to you, where once the budget is approved one is conceptually forced to spend that amount? That is, use it or lose it with no chance of getting approval again. Or it would be hard to get funding the following year because of the notion that “you didn’t use it the last time, you don’t need it.”
However, the folks probably have been dealing with this dichotomy for ages in most of the big corporations.
Make a Dummy Proof Presentation
Any budget and funding approval begins with a deck. The teams need to go through various iterations internally to ensure the language in the presentation does not sound too technical or academic. “Make it look simple that an eleven-year-old can understand” is a common motto in such cases.
At times I wonder, how an eleven-year-old would understand the complexity in simple non-technical language for the projects, like, HR Case Management, Implementing Single Sign-On via one federated solution versus others, or Automated Provisioning of Application or Web Instances.
Nonetheless, the teams need to try their best – with some artistic language skills and versatile vocabulary – to ensure the folks sitting on the board or committee of financial approval can understand the need and urgency of the proposal.
Execute a few dry-runs to ensure the presentation includes the critical ingredients to impress the board members. (Know your audience – A political ploy to figure out who is on the board and what do they value the most.)
Shouldn’t the Finance & Accounting departments be happy that the team did all the due diligence in coming up with an appropriate budget proposal?
Proactive Review and Adjustments in Tandem with Changing Priorities
Now, usually, teams work and juggle with a lot of moving parts during a financial year. The agile process keeps them shifting and adjusting priorities frequently on the ground.
The same agility is also needed, in a proactive manner, for the adjustments in the course of the funded projects.
In a conventional use case, some projects would run in parallel, and some may have a sequential order on the roadmap. Also, there might be some ongoing operational tasks and activities that may require a base budget.
The teams need to ensure that the base operational tasks of keeping the railroad running are always the primary focus. That said, one must assess the funded project(s) frequently to ensure it is still valid and would add the needed business value proposed initially.
(Assumption: A benefit of the doubt that the folks on the financial approval board did their due diligence when they approved and funded the project.)
Maybe some outside factor is making the plan ineffective. Or perhaps another group did something that makes it a redundant solution. Or maybe 80-20 rule is making it pushed further down the priority list, and another project (or new activities) can make better use of those funds to support the organization.
Irrespective of the situation, one must not be afraid of communicating and filing a Change Request with PMO or Budget Committee (or relevant board) along with appropriate rationale.
After all, the corporate interest should supersede any specific team or group’s internal mission. There is no better way than a proactive reassessment of the validity of the pre-approved priorities.
Consequently, the approval boards and committees should applaud the forthright open and honest behavior of cost savings and funding adjustments; rather than punishing it by making a red mark on the virtual credit rating of the team for future funding and budget approval.
Cost Savings – Negotiation
During execution of the project, a complacent tendency is to approve the statement of work (SOW), work order (WO), invoices, relevant timesheets and expense reports as long as the overall cost is within the approved budget.
I would go against the norm and try to negotiate (or renegotiate) the rates wherever applicable. Even in the case of government contracts, I’d try to reason with the bloated template fees that vendors push as gospel in the name of “policy.”
Just because as a good corporate citizen one did an excellent job in preparing a proposal, which got approved – one should still try to control costs complying with a famous saying, “deliver under budget and ahead of schedule.” One crazy idea, consider a percentage of the money saved as a bonus for the teams (agreed there are chances of abuse – hence having controls at every level will help).
In fact, I recommend internalizing the functions – bringing the knowledge and skills to the core team and base budget. The idea is to deliver and support the company, corporation, or (government) agency that one has allegiance to with a balanced approach of cost-effective and efficient solutions in an ethical manner.
Probably, in my utopian world corporate divisions would apply the business thinking to achieve the continuous improvement and the excellence that the leadership espouses.