The word on the street is that budgets for development projects have been shrinking for years – perhaps even decades. If this sentiment is true, how do so many embedded designs make it to production status each year? Is the design quality for these projects more compromised each year? If the projects are over budget each year, how do the companies that fund these projects realize a high enough return on investment to keep justifying starting new designs? I question the validity of the claim that budgets have been shrinking year-in and year-out for ever increasingly complex designs without some offset occurring somewhere.

Perhaps a development team has a smaller budget for developers, but is it done without an increase for the development tools? I have been watching the development tool industry for years to see where the big productivity gains are coming from. Most of what I have observed is incremental improvements in what tools can offload from developers. Also, I do believe companies have been slashing their training budgets, but somehow the projects still get done (maybe not optimally but well enough to justify doing the project in the first place).

Another way that projects might get by with smaller development budgets is through heavy reuse of earlier designs and/or licensed IP (intellectual property). A trend that I have seen increasing over the years is that semiconductor companies are providing more software with their silicon products so that development teams can concentrate their efforts on the value add features rather than the basic functions. In this case, the overall budget is not shrinking so much as it is being transferred to different development teams.

I do not expect that development teams have generous budgets. I do expect that the budgets routinely require creative thinking from the team members as to how to squeeze 10 to 20% more out of the budget to meet the project requirements – but that is the process by which continuous improvement occurs – I doubt it would occur any other way. Are your budgets sufficient or are they too tight to complete your projects? What would you change about your budgeting process if you had your way? Is it possible for budgets to shrink every year and still be able to produce ever more complex designs?

Tags: Budgets

This entry was posted on Wednesday, March 16th, 2011 at 12:52 pm and is filed under Project Management, Question of the Week. You can follow any responses to this entry through the RSS 2.0 feed. You can skip to the end and leave a response. Pinging is currently not allowed.