Programme Assurance Resources
Long Term Budget Planning For Programmes
The information in this guide is intended for general purposes only. For more specific guidance around your organisation’s projects, please get in touch with our team.
In this section, you will find:
- Splitting out the deliverables and projects
- Building programme budgets in 3-5 year strategy planning
- Aligning planning with broader financial forecasting
- Engaging the help of those accountable for analysing business risks
- Building a picture of the variables that may affect the programme’s roll out
- Establishing and protecting a clear set of outcomes
- Building contingency
- Get assistance from external programme assurance experts
- Where to next?
- Latest Programme Assurance Articles
In this guide, we will cover some key areas of budget planning that can help keep a programme on track, and highlight some common stumbling blocks that you may want to keep an eye out for.
Splitting out the deliverables and projects
There’s a number of issues that we see recurring within a large number of organisations, but one that really sticks out is the mistake of biting off too much at once through an individual project or even a milestone within it. When businesses set projects that are too big and cumbersome to progress through efficiently, there is a high risk of failure, or at least missed milestones and overspend.
By breaking up a big project into smaller ones, each with their own scope, shorter time period and milestones, organisations can have more nuanced control. It’s common for project milestones to incorporate a number of business outcomes, all of which could add value separately. Having a large number of dependencies creates more potential points of failure.
As far as budget planning, shorter duration projects within a programme allows the business to manage budget more effectively. With projects being completed more regularly, adjustments can be made to future projects’ budget and scope to ensure the overall programme is landed within budget.
Building programme budgets in 3-5 year strategy planning
Programmes are strategic and long term in nature. But the budget still needs to be as accurate and concrete as possible. While no business can predict what the state of things will be in a year let alone 5, the estimation of the programme’s overall costs should be as accurate as possible.
The way that programme costs are often compiled is through the breaking down of each phase and determining the associated operational and project costs. We encourage businesses to not underestimate the time and cost of governance and supporting the programme to run effectively – not just the underlying deliverables. Some transformations actually require the establishment of an entirely new senior leader and accountability, so this process is more than simply summing up project estimates.
The budget estimate can only be done as well as the available facts today and smart forecasting. Unforeseen events either internal to the business or external factors (like those of 2020) can knock things off the original path. But if there’s a reasonably stable logic behind the budget planning as well as good contingency planning, then a refining of the budget later down the track is not as major as it might be for an incomplete budget plan.
Aligning planning with broader financial forecasting
The programme and standard daily operations in most businesses become heavily intertwined, with this becoming more and more clear the further the programme’s outcomes are embedded. A programme is simply a coordinated way of improving the organisation – so once those improvements are made, they’re operational costs.
If financial forecasting is making allowances for market forces, competitive risks or any other factors, the programme and impacts to it from this need to be considered also.
Engaging the help of those accountable for analysing business risks
The ongoing analysis of the business and risks that may affect it in some way is part of any large organisation. Many of these risks have a close tie into the financial performance of the business. Things like pandemic, market crashes, technology disruption, competitor activity and reputation all form part of a bigger risk register that can be actively managed and mitigated.
When planning the budget for a long term programme, it’s important to build in the same level of scrutiny under which the longevity of the programme can be assessed. What potential issues or challenges could arise that would negatively impact progress? Understanding what these risks are and how to navigate them is something that Risk Management roles in the business can contribute towards. Other positions in the business like business analysts, finance team and others may also help determine how the programme fits in to the overall risk profile of the organisation.
Building a picture of the variables that may affect the programme’s roll out
Scenario planning helps establish plans B and C should certain things eventuate. Organisations should, through their programme scope and planning, know what milestones can be affected by. There will be variables every day that can influence the course of programmes. What happens if a particular project’s deliverables do not have the intended outcome for the business? Do the programme’s strategic outcomes still get met if a different approach to a particular part of the work is changed?
Establishing and protecting a clear set of outcomes
Building contingency
Contingency is often underestimated, usually because ‘too much’ wiggle room may be seen as a lack of planning, scope or understanding of what’s required. But contingency budget is practically required given the nature of a large transformational programme. So much can change or evolve over time, that without the long term budget having a healthy layer of contingency, the business can be left exposed to either failure or the need to find this budget elsewhere. Best to have as much of a runway as possible.
Get assistance from external programme assurance experts
Budgeting for a programme is an enormous job – something that no one role or even team can be solely responsible for putting together. The period of time to plan a programme out can take months or even a year in some cases.
Having a 360 degree view of the programme and considerations that will affect budget planning can be hard for the business to do internally alone. It’s why the likes of IQANZ as quality assurance specialists can help organisations plan for a successful programme from the very start. Get in touch with our team to learn more about how we can assist.
Where to next?
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Explore our other QA services
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