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\nHow to Anticipate Future Budget Challenges to Your Project\n

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\nWhy is this an issue? Why do you need to anticipate future budget challenges? Because shift happens! Things change or go wrong. And if you don’t anticipate them, your responses will always be reactive.But, as a project manager, your job...\nWhy is this an issue? Why do you need to anticipate future budget challenges? Because shift happens! Things change or go wrong.

And if you don’t anticipate them, your responses will always be reactive.
But, as a project manager, your job is to be in control – and that means anticipating events and acting before you lose that control.

So, you need constant horizon scanning - like a meerkat.

So, what are you looking for, how can you spot it, and how can you respond?

First, what are you looking for?
Here are some of the major causes of budget challenges:
• Changes to requirements
• New stakeholders emerging
(or stakeholders you had not been aware of or had failed to engage with)
• Changes to prices due to:
o Inflation
o Exchange rates
o Borrowing rates
• New risks identified
• Issues, accidents, errors, or failures, requiring re-work or remediation
• Errors on estimation when you created the budget

Second, how can you spot the challenges emerging?
Monitor leading indicators:
• Expenditure vs plan
• Earned Value
• Formal risk register reviews
• Monitor quality of deliverables
• Keep an eye on pattern of change requests
• Monitor the performance of team members, contractors, consultants, suppliers
• Keeping your ear to the ground: listening to stakeholders and taking the mood
• Speaking with team members and hearing their concerns
• Tracking costs of raw materials and forex shifts

Third, how can you respond to budget challenges?
This all comes down to the four constraints of time, cost, quality, and scope. As a result, you can:
• Secure extra budget
• Adjust your project schedule
• Compromise on quality
• Reduce your scope

Or, of course, you can re-engineer the whole project process or deliverable set. Do take a look at our video on Value Engineering -    • What is Value Engineering? Project Ma...  .

However, be aware that this may also have an impact on the benefits profile and value delivery for your project. So, you would need to revisit your Business Case or Project Proposal -    • Project Business Case: Write an Effec...  .\n
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Resource Details

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Media Length
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6:19
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Grade
10th - Higher Ed
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Subjects
Career & Technical Education
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Media Type
Instructional Videos
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Source:
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\nOnline PM Courses\n\n
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Date
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2021
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Language
English
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Audiences
For Teacher Use
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Usage Permissions
Fine Print: Educational Use
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Concepts

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cost, time, speak, engineering
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project budget challenges, future budget challenges, budget challenges, project costs, cost management, project budget, project cost management, financial management, project financial managememt, horizon scanning, budget, project budgeting, budget monitoring, budget control, cost monitoring, cost control, project cost control, project budget control, project management, project cost management process, project manager, project management skills, project budget management, business case, cost money, project, shift, challenge, monitoring, happen, stakeholders, shifts, quickly, horizon, spot, finally, aware, video, quality, impact, keeping, deal, scope, adjust
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