In this case study Justin has been tasked with creating a realistic budget for a new sensor manufacturing process. The bone of contention is that the president of the company REALLY believes in the current manufacturing process and practically wants a guarantee of profitability in order to consider altering the process. Unfortunately, in order to stay competitive the company has to continue to streamline operations. That is where poor Justin comes in. If his budget is too high boss man will not give the go ahead and they risk losing out to the competition. If his budget is too low there could be serious repercussions during the project, possibly preventing completion.
In Practitioner Voices we are reminded again that there are really only five elements or factors to manipulate in a project: time, money, people, quality, and scope (Laureate, 2010). Each of these factors affects the budget bottom line. As Justin approaches budgeting this project he has to consider which elements are most important to his company (i.e., Mr. Boss Man).
Clearly quality and money are the top two considerations. Sensors are extremely price sensitive and competition is fierce. Justin should utilize a bottom-up budget approach itemizing each stage. “Only one stage of the four-stage sensor manufacturing process is being changed” (Portny, Mantel, Meredith, Shafer, & Sutton, 2008, p. 147). Although this is helpful in allowing Justin to accurately estimate three out of the four stages, the “stage being addressed by the project represents almost 50 percent of the manufacturing cost” (Portney, et al., 208, p. 147).
In light of the company culture, I would suggest Justin itemize every possible element utilizing as many cost-saving measures as possible in addition to providing optional budget scenarios. For instance, he could provide Guy with budgets providing comparisons using alternate timelines, experienced personnel, and limiting or expansion of the scope. It would also be very important for Justin to meet with the manufacturing department that would be working on that particular stage and get as accurate a breakdown of the tasks, time, and people that would be required to fulfill that aspect of the project. This would allow Justin to make the estimate as accurate as possible. Lastly, I would also have a budget comparison that included the possibility of minor changes to the other stages, based on the manufacturing department’s information.
Clearly, this would be a LOT of work for Justin; however, in the end it will be covering his butt in either direction. If he gives Guy the realistic, practical numbers then it is up to the President to make the call. If he chooses not to run with the project at least he had the accurate information. Sadly, if he decides against the project and the competition beats him to the punch, Guy could still take it out on Justin. Unfortunately, that is the way it works. In a perfect world, Guy would realize he made the choice and Justin did the best he could.
How might this situation apply to an education or training project environment?
This type of scenario is very likely to occur in both education and training project environments, and possibly more so. Education and training projects involve a lot of different variables, individuals and learning contexts, which is why there is the ADDIE process to begin with. The variables are exacerbated exponentially due to the many different individuals, learning styles and possible modalities involved. In fact, I would be very surprised if the top-down budgeting approach were used in any education or training project environment. That could easily be a recipe for disaster.
Laureate Education, Inc. (Producer). (2010). Practitioner voices: Resource challenges [Video]. Available from http://sylvan.live.ecollege.com.
Portney, S. E., Mantel, S. J., Meredith, J. R., Shafer, S. M., & Sutton, M. M. (2008). Project management: Planning, scheduling, and controlling projects. Hoboken, NJ: John Wiley & Sons, Inc.