In trying economic times, plenty of businesses will look for ways to reduce costs and slash overheads. Oftentimes, your project management office (PMO) can face cuts, so here is our guide to what to do when your PMO budget is cut.

PMOs can come in the crosshairs of budget tightening because they can be seen as an extra layer of admin or a cost centre rather than a place to generate income. If your PMO has to work with a lower budget in the next financial year, you need to plan how what comes next.

To help you manage with less money, we’re going to look at:

  • Recentring your PMO services
  • Resetting PMO priorities
  • Rethinking your use of technology
  • Retraining your resources

To keep your office delivering what’s expected.

How PMO budget cuts will affect your services

When your PMO was created, the services you offer would have been clearly defined. You’ll have balanced the work your office will do between quick wins, long-term processes, and high-value operations.

You will need to review and rebalance the services that you offer. Assess what you do that is:

  • Essential to PMO and project operations
  • A nice-to-have that may be expendable
  • Bells and whistles that can easily be removed

List what your priority services are and understand the costs of each.

Working with your PMO sponsor to reprioritise

Once you have a deep understanding of your services, you need to have a discussion with your PMO sponsor. You will know what services you want to preserve, but your sponsor may have different ideas about what your office needs to do.

Having your proposed priorities and a list of costs of each service will ensure the conversation will be focussed on the services.

This may also be a good time to discuss how your PMO can be a driving force for cost-cutting elsewhere. Some of your services may actually be able to expand, such as admin support for projects, and reduce costs in individual projects.

Using technology to reduce your PMO costs

If you’re lucky, you’ll be able to use technology to disrupt your PMO processes at a time when you’re ready. However, when your budget is cut, you may need to turn to disruptive technology to be able to preserve some functions.

You should reevaluate the technology that you use now, such as storage, messaging, and scheduling to see if there are more efficient alternatives. Moving storage to a cloud solution, for example, may have some upfront costs but could save your office and your projects money on server maintenance in the long-run.

Bringing in new ways of working with disruptive technology should cut long-term costs and also stand your office in good stead when the good times of budget increases return – you’ll be able to quickly increase productivity with a solid tech base.

Upskilling your team to stretch your budgets further

One of the elements you’ll need to reconsider with less cash to spend is the people working in your PMO office. You may be using freelancers or contractors, which can be expensive compared to in-house talent.

Consider if your team can be trained to do some of the work a freelancer does, for example. You should be looking to offer a commensurate pay increase if you train someone for a more technical task, but it should still be less than continuing to outsource.

As noted earlier, you may also be able to utilise your team members to take on project-related tasks and reduce costs across projects.

How to handle a PMO budget cut

It’ll never be easy to work with less money to spend. You may have had big plans for expanding and increasing your services and now have to put them on hold. Knowing what to do when your PMO budget is cut will help keep your office viable until you start to see increases again.