Best Practices for Product Management Budget

When I discovered it was time to discuss the product management budget concept, I cringed, I moaned and I groaned. Why? Not because I think it’s unimportant or something. It’s tremendously important, and it’s a challenge. I just, like so many people who aren’t bean counters or mathematicians, hate financial topics.

Death and Taxes:

Unfortunately, we’re stuck with the responsibility to handle budgets for things like product management, and to present them before the almighty accountants and plead for them to bestow on us the resources we need to keep our jobs tenable.

Well crud, that’s a problem if we’re not financial people at heart, and usually hate to be bothered with numbers and the like, isn’t it? Yes, the product management budget is pretty horrible to think about.

The Silver Lining:

The silver lining of this is that there are no convoluted formulae needed to calculate a budget for product management, for one thing. You will just use simple percentages and ratios based on the various expenses and resources consumed by your department, and then let the accountants figure out the bigger, badder numbers over it.

The Problem:

Yeah there’s a problem here in the form of the percentages and ratios being absolutely never global from one business and scenario to the next. Well, that means that we can’t suggest specific ones, because heck if I know if they’d be applicable to your situation.

The Solution:

Bottom line, there’s not much in the way of a perfect solution to this, so all we can really do is prioritize the things that absolutely must be given their budget no matter what.

One of these is your CRM software and its tacked on functionality, because this is the spinal cord of business these days. The same goes for your BI software, which tracks trends in your popularity and the public opinion of you, which greatly impact decisions in product management.

Another one is adequate personnel that skill overlap and overwork isn’t severe. Watch accountants, because they’re grudging of human resources where they can be skimped off, believe me.

Caveats:

Always budget five percent higher than you really need, because if they push to lower it, and you offer that five percent reduction, they’re likely to jump on it while the offer is lower.

Notice from this that there comes a part of this that is very much like bartering, to get the monetary resources you need from the company’s financial department, to get something done.

Conclusion:

Why do they make it difficult, when your goals and theirs should be the same? You’re on the same team, right? Yes, but being valiant with guarding and meting out the money to all departments is what they are there for.

It’s not unlike controlling fuel flow and consumption in a machine.

So, how do you plan a solid product management budget? Beyond those prioritizations and those warnings, it’s all very much dependent on your situation. I wish I could advise in more detail with that, but what can you do? As long as you know what’s “need” and what’s “want”, and know how to work the numbers to get budgets agreed upon, you’ll be fine.

bnr19

Mark Silver
Mark is the Lead Author & Editor of Spectechular Blog. Mark established the Spectechular blog to create a source for news and discussion about some of the issues, challenges, news, and ideas relating to Product Management.
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