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The Power Of Personal Project Budgets

If you want your organisation to be as lean and profitable as possible, you need to ensure you’re fully utilising your people.

If your team isn’t working efficiently and you’re over-delivering on projects (spending more time on them than you’re actually being paid for), you can end up hiring more people to deliver work that isn’t even profitable, driving costs up and profits down.

This is incredibly common in project-based companies, but the good news is there are several techniques you can apply that can quickly improve the situation – and your bottom line.

One of our favourite techniques is something we call “Personal Project Budgets”.

Whether your priority is maximising profitability or just keeping costs down and being lean, maximising the productivity of your staff is a key factor and Personal Project Budgets can definitely help.

So, what are Personal Project Budgets, why are they effective and how do you implement them? I’m glad you asked…

What are personal project budgets?

Personal Project Budgets are the project management equivalent of that old saying, look after the pennies and the pounds will look after themselves.

Traditionally, it’s the sole responsibility of the Project Manager to ensure that the entire project is delivered within the overall budget.

However, with Personal Project Budgets you can spread the load by slicing up your overall project budget and giving each member of the team responsibility for their own slice.

For example, let’s say you have a project that requires a Writer, a Designer and a Consultant. As you assign people to those roles, you give them a slice of the budget and make them responsible for it.

Let’s say we want to assign Gemma to the team as a Writer and we’ve budgeted 20 hours for that role on this project. Gemma is given her creative brief and told she has a budget of 20 hours in which to complete the work.

As far as Gemma is concerned, the budget for the project is 20 hours – she doesn’t need to worry about the rest of it. Instead, she can focus all of her attention on delivering her part within budget.

Repeat this same process with each member of the project team, ensuring they understand their brief AND their budget.

If each person delivers their work within their own budget, the entire project will be delivered on-budget as a natural result.

Like I said, look after the pennies and the pounds will look after themselves.

How do you implement personal project budgets?

Of course, it will help enormously if you actually built your budget for the project properly in the first place.

During the sales process, if you calculated your fee estimate by working out how many days/hours you needed by task and role, you’ll already have a clear idea of what the personal budgets should be. It’s then super-simple to push those budgets down to the individuals responsible.

However, if your original quote was a bit more of an overall guestimateyou’re going to need to go back and split it out by role (and hope it works!)

Of course, regardless of the Personal Project Budgets technique, we would always encourage you to quote accurately by breaking your projects down into tasks, time (days/hours), and roles, as doing this can have a massively positive effect on your profitability.

(To learn more about the perils of under-quoting and how to eradicate it, go here.)

Now, once you’ve assigned personal budgets to your team, the next step is to track how they’re doing against their budget – and to enable them to track it themselves. 

This is where timesheets come in.

Interestingly, the biggest obstacle to timesheet adoption (other than most timesheet software being painful to use!) is that people often think the purpose of timesheets is for ‘Big Brother’ to keep an eye on them.

Of course, that’s not the case (at least, it shouldn’t be!) because the real purpose of timesheets is to ensure we aren’t over-delivering and doing work for our clients for free.

The beauty of personal budgets is that your team now have responsibility for their own budgets, so they’ll suddenly discover the importance of timesheets as they’ll need them to ensure that they’re staying within their own budget.

Ideally, if you can give your people real-time visibility of (a) the personal budget they’ve been given and (b) the amount of time they’ve booked so far, then you’ll be in great shape and odds on to deliver the overall project on budget.

Using CMap as an example, when you assign a Personal Project Budget to someone it appears automatically on their dashboard. Then, as they book time to the project using CMap’s timesheet, the “actual” figures will flow through immediately to their dashboard, enabling them to track their progress against their personal budget in real-time.

cmap-my-project-time-dashboard

Figure 1. CMap’s My Project Time dashboard box enables your people to track their progress against their Personal Project Budgets in real-time 

Of course, if you don’t have CMap you can probably do this with spreadsheets instead, but a connected system like CMap definitely makes it easier and more automated.

(If you’d like to discover more about CMap Timesheets, click here)  

Personal Project Budgets are, without doubt, one of the most effective techniques you can employ to better utilise your people and deliver projects on-budget.

It’s also a great way to develop your people, as it gives them more responsibility and more involvement in the commercial side of the business, something they often enjoy.

Overall, the end result will be more effective, more productive and more commercially-minded team memberswhich inevitably leads to more profitable projects. Everybody wins!