Budget owners and budget managers

Are project managers accountable for potential overruns in the costs of their projects?

This is a typical question that appears frequently in conversations between PMs. In my opinion PMs must:

  • obtain estimations of the whole costs of the project
  • determine the budget for the project
  • obtain the funds from the sponsor
  • agree with the sponsor on how to control the costs of the project
  • ensure that there is a system to track all the costs of the project and that it is properly used
  • inform periodically all the relevant stakeholders about the actual costs (vs the planned ones)
  • manage change requests and obtain approvals (or not) if additional costs are required

In big organizations there are usually sponsors and executive sponsors.

Executive sponsors are the ones who own the budget.

They provide the funds and guide the project in order that it delivers results according to the strategy. However these kind of people are usually very busy and is not easy to get access to them. It is important to ensure that thay delegate some functions in the ‘simple’ sponsors.

Sponsors are less senior people but frequently more prepared to understand technical details and with enough availability to dedicate time to the project in a regular basis. It is important to identify one of them in your project and to obtain their commitment to support you as a PM.

Sponsors do not own the budget but they have authority to manage it.

They are the ones that can follow with the PM the day to day of the project, read the updated cost reports and even approve some limited additional costs. They make the life of the PM easier and are crucial for the project success.

What is your experience with sponsors? Have you identified these 2 roles in your projects? Do you have this kind of sponsors in your organization?

 

Budget owners and budget managers

3 ways to manage difficult Project Sponsors

The role of the project sponsor is key in the success of a project. The sponsor must ensure the alignment of the project with the strategy of the organization, he must champion the project in front of other senior managers and provide ongoing direction as the project evolves. And his responsibility does not end when the project finishes; he must also ensure that the client makes effective use of the project deliverables to achieve the results planned in the business case.

So the role of the project sponsor is strategic; she must be an enabler to create the conditions for the project team to work successfully and let the project manager the day-to-day execution.

However, many times project sponsors do not have the skills, the experience or just the awareness of their duties regarding the project and how they can affect its final outcome. What can we do as project managers to:

  • detect this risk for the project
  • help the sponsor to fulfil his/her obligations

Find out sponsor’s expectations on the project

In a subtle way, a communications and risk assessment strategy con be prepared so that the PM can adapt his/her approach and communication methods to obtain the maximum support from the sponsor. An effective approach is to ask open questions to the sponsor in your first meeting with him, like: ‘What are your expectations for this project? What kind of risks would you consider? What is the level of priority of this project in your strategy? This kind of approach will allow you to learn more than by asking closed and very focused questions.

Early discovery of the sponsor capabilities and capacities

During the first meetings with the sponsor it is important also to assess his capabilities regarding this role and also his capacity to assume the workload that it involves. It is common that  sponsors are very busy executives who have a full time ordinary activity and the sponsorship of a project is something added to their usual job.

Moreover the interest in the project by the sponsor is critical an should not be taken for granted. Sometimes there are sponsors who are assigned to a project just because there must be a sponsor or because the project outcome is somehow related with their function. This situation will affect the project day-to-day and the involvement of the sponsor in the project.

The sooner the situation is detected the earlier the project manager can start preparing a plan to manage the risks. One possible option is helping the sponsor build his/her sponsorship competencies by framing possible solutions to the problems you escalate and explain the options.

The Project Sponsor as a facilitator

Finally, it is important to confirm that the sponsor understands that he should not interfere in the day-to-day  of the project. The project manager is responsible for this. The sponsor would better be a facilitator that helps the project manager and provides the necessary organizational support needed to make strategic decisions and create a successful outcome from the project.

What is your experience? Have you ever had to deal with a difficult sponsor? What was your strategy?

 

3 ways to manage difficult Project Sponsors