[EN] So, What’s Your Budget Sir…? 29 October 2006
Posted by alwi in : berbagi ilmu , trackbackThat would be one of my standard question when negotiating a project. I’m not sure if it’s an ethical question or someone may take this as non professional question.
Why is it whenever I shoot this question, the other party have this tendency to hide the actual budget or try to reason and offer low? Even a colleague of mine –she’s an expert in financial planning– suggested not to mention the actual budget when asked so.
Depends on the situation, it may be a good thing to hide your actual budget. Especially when you are dealing with a salesperson who depends on commission. Bigger sales, bigger revenue, bigger commission for the salesperson. Maybe if you are buying a car or property especially when you are buying with loan.
But it may not be the same when you are dealing with a consultant or project coordinator like me. Actually, I don’t really need to ask this question. If the project is considered normal, eg.: not require special skill, normal timeframe, consume average resources and so on.., I really don’t need to shoot this question at all.
But when a project is considered *not normal*, maybe it need special skill or consume a lot of resources; or has a high risk, tight deadline etc. I might shoot this question.
Why? In such project I may need to manage my resources properly to deliver the project. Maybe to meet the timeframe I need to add manpower to the project, pay overtime or maybe ask the team to learn a new thing.
I need to calculate and allocate proper resources to each project. As an illustration, I give you this formula:
If a client demands high requirements and has low budget, I have to reduce time allocation or resources to deploy on the project. This automatically results to slow delivery. Time and resources can be allocated for other projects. If client give tight deadline, I need to allocate more time and/or resources to the project and without compromising the requirements will results to higher project value. In other case, if a project is low requirements and infinitive deadline…, also doesn’t take much resources…, the project can be free 
One thing that I must tell, on normal projects I always allocate at least 2 team member plus me as the projects coordinator for a certain period/timeframe. In other words, the service fee stays and starting at some number of dollars. So when a client offers low, it will only slow down the delivery time or we have to negotiate some alternatives on the requirements.
Still it’s hard to explain this to clients.
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Xanax….
Xanax….