How to Deal with Project Management Office Budget Cuts

Managing and reporting on budgets can be an integral part of your project management office (PMO). In these difficult economic times, you may find that you need to start looking at how to deal with PMO budget cuts as businesses and clients start to tighten their belts.

You may have to deal with below-inflation budget increases or even actual budget cuts to your office and/or to the projects you work with. This will be a challenging time which will require different ways of thinking and working.

Here, we’re going to give an overview of dealing with budget cuts, looking at:

Actions you’ll need to take when you get the news
Things to work on when project budgets are cut
What you can do when your office budget reduces

We’ll look at how to handle changes in your projects and your office in the coming articles, and also explore reducing the human resources in your charge.

First steps when dealing with PMO budget cuts

Getting the news that you will need to work with less funding for the next forecast period in your organisation is tough. You’ve got plans for new technology, new training, new people — and it’s all going to have to be canned.

We’ll make no bones about it; it won’t be easy to work with less money, but the sooner you adapt to the new reality, the sooner you can develop new processes, requirements, and targets.

In general, you’ll need to have a broad conversation with the person driving the budget cut. If it’s your PMO sponsor, you will both need to be realistic about what can still be delivered and what might need to be pared back. A client cutting a project budget will also need to be guided on realistic new expectations.

You can also look at what is driving costs in your PMO. Do you have the opportunity to disrupt your work with new technology? Can costs be saved with actions like increasing remote or hybrid working?

Finally, you will need to do some work on your project and PMO priorities. This will mean working with your office team and/or your project managers to see where the focus needs to be to get what can be delivered done.

How to deal with budget cuts to the projects you work with

Once you’ve dealt with the bigger picture with your budget cuts, you will need to start taking practical actions to change projects, timelines, and activities. Projects will have a new reality to face with less money to spend.

Some ways you can look to reduce your projects’ spending include:

Changing the delivery deadline — if the headcount in a project reduces, work can still get done, but it will take longer
Adjust the deliverables or expectations — a tech project may not have all the functionality or look quite as pretty for a lower cost
Figure out necessity from “nice-to-have” — not every bell and whistle that was tacked on to the project at the beginning may be needed
Look at sharing resources across projects effectively — experts may be able to be shared if timelines are changed

Dealing with PMO budget cuts

If your office comes in the firing line for reduced spend in the next financial year, you can look at some of these actions to mitigate the change:

Look to software and automations that can reduce the human inputs needed in your office
Change your resource structure — can an expert freelancer pick up tasks when you lose some of your team?
Pool project resources into your PMO, such as having all admin tasks from projects brought into your office

We will look at these options in more detail in future posts.

Working with budget cuts in your PMO

When money is tight, everyone will need to understand that they won’t get what they initially expected from a project. Your PMO may have to deal with a lot of the changes, such as supporting projects making new schedules and adjusting plans and expectations. Preparing for how to deal with PMO budget cuts will mean you can keep BAU as much as possible.