One of our commercial pharma clients did not have practices in place to monitor and manage their budget throughout the year. After overspending their approved budget by 7% one year, the VP of IT recognized the need for a structured cost management system for the organization, so he sought our expertise to develop and roll out a cost management processes and tools to get his IT budget back on track.
What We Did
1. Assessed Existing Budget Practices
We reviewed IT’s existing annual budget and spend processes and identified gaps in regular monitoring, controlling, correcting, and reforecasting. We also conducted sessions with each IT leader to understand their budgeting challenges and requirements and found that IT team members were self-managing their budgets without a unified process to coordinate with Finance tor tracking actuals and communicating changes throughout the year.
2. Developed Cost Management Processes and Tools
We improved their annual budgeting process and developed a number of additional tools to help them monitor and reforecast throughout the year, such as:
- A budget change request mechanism
- A quarterly budget reforecast tool and cadence to provide more accurate projections throughout the year and allow the team to pivot or change plans if necessary
- Budget creation spreadsheet
- Comprehensive deck consolidating all budget data that included project charters with each project tied to specific budget line items
- PO tracking spreadsheet to monitor actual spending against the budget
3. Rolled Out the Cost Management Process and Trained the Team
Lastly, we rolled out the new cost management process and trained team members on how to leverage the budgeting tools. To ensure budget adherence, we established operational governance and even conducted regular meetings with Finance. These mechanisms allowed IT to course correct in real time and ultimately stay within their overall annual budget.
Client Results
By implementing comprehensive cost management processes and tools and engaging all key stakeholders throughout the implementation to ensure their buy-in, we eliminated our client's cost-overrun and helped them come in 4% under budget the following year.
From
0 %
Over Budget
To
0 %
Under Budget