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Optimal budgeting is one of the main challenges engineering leaders and technical project managers face. When problems pop up mid-project, fixing them isn’t as simple as saying, “I promise to spend less money next time!”
At the same time, complex projects rarely follow predictable paths. Even the well-telegraphed complications you see months ahead of time can still derail projects that aren’t budgeted appropriately in advance.
But unexpected complications can transform a realistic budget into an unfeasible dream. That’s why executives and recruiters are increasingly prioritizing engineering leaders with proven skills in finance management.
One of the advantages that finance management experts bring to engineering budget planning is a nuanced appreciation for the value of a well-managed budget. It’s not as simple as minimizing costs – although that’s a part of annual budget planning that shouldn’t be ignored.
Great budget planning is about strategic resource allocation and risk management. It’s about ensuring the project aligns with business goals, even when it needs to spend money to make money. Planning with business objectives alignment in mind empowers decision-makers to be proactive about communication in planning, so that engineers and product owners can collaborate effectively.
Finance management experts understand the value that engineering and product collaboration can bring to team productivity. Fortunately, it doesn’t always take a finance expert to make informed decisions on resource allocation and approach budget planning as an opportunity for growth.
Here are six of the most effective ways you can optimize engineering budget planning and make the most out of your upcoming plans:
Budget planning is a strategic exercise. You must think ahead and create contingency plans that account for potential disruptions down the line. Many engineering leaders make the mistake of creating strategic plans in a vacuum, based solely on the requirements of the initiatives they are responsible for.
But engineering projects don’t exist in a vacuum. Your organization’s overall strategic objectives and product roadmap can provide much-needed structure to your project’s strategy. The more familiar you are with the organization’s big picture goals, the better you can align budget planning with the overall structure of its plans.
Collaboration is an important part of budget planning because engineers are not the only ones responsible for the success of a product. Every key stakeholder involved in the product’s success has something to contribute to it. Great leaders don’t ignore those contributions, even when they run counter to their expectations.
Presenting a united front to non-technical leaders is crucial to obtaining successful budget and headcount approvals. Coordinate with product owners and engineering staff before presenting plans to non-technical leaders, because those leaders may solicit their opinions. If everyone is on the same page, leadership will feel much more confident about approving the project.
Having multiple contingency plans is a core tenet of excellent project management, and it applies just as well to annual budget planning. Successful engineering leaders know that sometimes things will go wrong, and they plan accordingly.
Material costs may suddenly increase. Staff shortages may delay the timeline. Even previously agreed-upon parameters may suddenly change on you. In these scenarios, having access to additional resources can mean the difference between meeting project goals and failure.
If company needs are changing, you’ll need to demonstrate strong leadership and adjust your team’s focus in response. Emerging technologies like predictive AI can help you identify hidden obstacles to engineering performance and drive insights on opportunities to improve.
Headcount planning is a vital part of the annual budget planning process. Onboarding new specialist talent in the middle of a cycle can be a significant disruption on its own – not counting the unexpected disruption you’re hiring for in the first place!
Avoiding mid-cycle headcount requests is challenging, but not impossible. You may be able to achieve this goal by advocating for technical roles that provide support and maintenance throughout the cycle. These roles may not contribute directly to the product but they can provide a great deal of flexibility to teams responding to changing business conditions and company needs.
Team productivity depends on excellent communication, and the project’s budget is supposed to enhance that – not take away from it. In today’s tech-enabled environment, it’s easy to believe that every problem can be solved with a new software license. Unfortunately, that’s not always true.
Communication is not a product, it’s a skill. Certain tools and platforms can enhance collaboration, but they can’t replace the value of dialogue between team members and stakeholders. Since Agile teams put a great deal of emphasis on collaboration, investing in communication training can pay off particularly well in Agile budgeting scenarios.
Before you can successfully manage an engineering team, you need to be able to observe that team in action. Visibility is especially important for work estimation accuracy during the planning stage since it can provide you with key metrics showing how well resources are allocated and what team dynamics are in play.
Waydev includes a comprehensive solution for resource planning that reports on resource allocation and software delivery velocity. This enables engineering leaders to create more accurate budgets and accommodate resource consumption patterns well in advance.