(upbeat music)
- Here's how I'd approach this challenge.
We discussed the desire to use management reserve funds
due to unexpected activities related to in-scope work.
However, your sponsor wanted
to use the contingency reserve funds instead.
Stakeholders frequently get confused
between contingency reserve and management reserve.
You're fortunate if your project has both,
but it's important to understand the difference.
Assuming the unexpected activities required
to produce the work were not identified
in the risk mitigation plans, by definition,
management reserve is the appropriate set of funds
that should be used.
Contingency reserve is intended to address uncertainty
to implement identified risk responses
or to respond to risk events.
I would provide the sponsor-specific examples
of why I believe management reserve should be utilized.
I would also provide examples
of when contingency reserve could be used,
so the sponsor understands the difference
between the two categories.
Ideally, the sponsor will agree
that management reserve is the appropriate category to use.
If the sponsor still wants
to use the contingency reserve funds,
I'd ask questions to understand their rationale.
Maybe there's something else going on
that I need to understand to support their decision.
Ultimately, this is the sponsor's decision, however.
The lesson here is reserve fund definitions
need to be clearly defined upfront
and explained to key stakeholders.
It's important that reserve funds
are defined and consumed appropriately.
In addition, it's ideal if you predetermine the process
by which these funds are approved to be utilized.
The goal is for the project manager
to have quick access to pre-approved funds
once they justify the reason
for consumption of any reserve funds.