Underspending your budget… not necessarily a good thing

Budget conversations are not relevant unless they are in a context of value delivery. I have often been drawn into conversations where constituents are beaming happily that they are consistently under budget – the only logical followup question is: did you accomplish your project objectives relative to financial and calendar commitments. If not, underspending a budget is a bad thing – just the same way that in a lean environment, under-producing AND over-producing inventory is unacceptable. Another consequence of budget under-runs (if objectives are not being achieved) is that other, equally deserving initiatives may not have been funded given the initial budget allocation. At the end of the day, tangible business objectives must be the drivers, accomplishing them at or below budget a job well done.

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