How can you adjust your budget for a project scope change?

1 Assess the impact

The first step to adjust your budget for a project scope change is to assess the impact of the change on the project. You need to analyze how the change affects the scope baseline, which is the approved version of the project scope statement, the work breakdown structure, and the work breakdown structure dictionary. You also need to consider how the change affects the other project constraints, such as time, cost, quality, risk, and resources. You can use various tools and techniques to estimate the impact, such as expert judgment, analogous estimating, parametric estimating, bottom-up estimating, or three-point estimating.

2 Update the budget

The next step is to update the budget based on the impact assessment. You need to revise the cost baseline, which is the approved version of the project budget, and the cost management plan, which describes how the project costs will be planned, estimated, controlled, and communicated. You also need to update the project funding requirements, which specify the amount and timing of the funds needed to complete the project. You can use various tools and techniques to update the budget, such as cost aggregation, reserve analysis, earned value management, or to-complete performance index.

3 Obtain approval

The third step is to obtain approval for the updated budget from the appropriate authority. Depending on the project governance structure, this could be the client, the sponsor, the steering committee, or the senior management. You need to prepare a clear and concise budget change request, which documents the reason, scope, impact, and justification for the budget adjustment. You also need to present the updated budget in a way that highlights the benefits and value of the project scope change, and addresses any concerns or objections from the stakeholders.

4 Communicate the change

The final step is to communicate the change to all the relevant stakeholders, both internal and external. You need to inform them about the updated budget, the rationale behind it, and the implications for the project. You also need to update the project documents, such as the project charter, the project management plan, the project schedule, the risk register, and the stakeholder register. You can use various tools and techniques to communicate the change, such as meetings, reports, dashboards, newsletters, or emails.

5 Here’s what else to consider

This is a space to share examples, stories, or insights that don’t fit into any of the previous sections. What else would you like to add?