Use-It-or-Lose-It Budgets: A Guide to Maximizing UIOLI

A use-it-or-lose-it budget presents an unusual business phenomenon. I’ve experienced it from both the client and partner side.

What's a Use-It-or-Lose-It Budget?

As the end of a fiscal year approaches, a use-it-or-lose-it (UIOLI) budget system encourages anyone with budget responsibility to launch projects that would cost money in the coming year with this year’s budget. 

As a marketing VP, the UIOLI concept never made sense from a company perspective. Why not hold the funds and make more strategic and timely decisions when you actually want to launch new initiatives? Nevertheless, I engaged in the practice. Doing so became important in making sure we could maximize our department’s deliverables and serve the business.

Based on my dual client and partner experience, here’s a simple guide to:

• The bad of UIOLI
• The good of UIOLI
• UIOLI Budgeting at Its Best

The objective is maximizing the benefits of UIOLI budget funds during this most unusual time of the year.

The Bad of UIOLI

There are multiple ways to make a UIOLI opportunity unproductive:

• Calling a partner and asking for an invoice the day you need to submit it.
• Making decisions to spend money without a solid sense of the coming year’s priorities.
• Making placeholder bets based exclusively on where you’ve allocated funds before.
• Funding speculative initiatives with partners who might not be able to flex with you.
• Spreading the UILOI dollars without regard to how much units of work typically cost with a partner.

Avoid all of these moves. Always.

The Good of UILOI

Creating a solid strategy for a use-it-or-lose-it budgeting scenario involves a few simple steps:

1. Realistically look ahead to the coming year’s demands

Evaluate where you expect to have the most demand in the coming year that could squeeze your budget resources. Additionally, consider areas where an early jumpstart on funding an initiative could provide the greatest leverage for delivering results.

2. Look at the broader company plan

Compare your list of potential initiatives for funding to the organization’s upcoming plan. Identify opportunities where you can make UIOLI budget selections that will deliver as much strategic value as possible.

3. Explore the right types of partners to include

Consider the best way to maximize your partner impact with UIOLI funding:

• What are the typical engagement sizes among vendors compared to the available funds you have? You don’t want to wind up funding 55% of a project that’s going to create a budget strain to complete it in the next year.
• Do you want to select just a few partners for UIOLI funding to secure significant early focus and exploration from them? Larger financial commitments create more attention among both parties to move ahead with the work.
• Alternatively, could spreading the budget in smaller amounts among more partners provide greater flexibility and options as plans and the environment change in the year ahead? If you have a variety of efforts, spreading the resource commitments could be helpful.

If you expect you’ll wind up with use-it-or-lose-it dollars, discuss the possibilities with targeted partners as early as possible. This creates the opportunity for them to do preliminary thinking about what they can accomplish for you versus simply creating an invoice with a generic engagement name and the promise to figure it out later.

UIOLI at Its Best

For the best use-it-or-lose-it budget scenarios, embrace these additional steps relative to external partners:

• Prioritize partners where you have a track record

• Give partners time to respond with documented thinking

If at all possible, counteract the request to simply send you an invoice. Provide partners time to prepare at least cursory scopes of work or engagement briefs so that you both have documentation once you actually reach the new year.

• Select the most flexible or multi-dimensional partners

Plans change. Selecting partners that you know can serve you in multiple ways is smart and strategic. Think about partners who can provide consulting and training, or partners who can generate creative ideas while also executing initiatives that they didn’t originally envision.

Maximizing Your UIOLI Decision Right Now

Are you actively figuring out ways to maximize your UILOI budget? Brainzooming would love to be a part of your next year’s initiatives to:

• Address and update strategy plans for the entire organization or for any area
• Develop your leaders through books, workshops, and keynote talks
• Unlock amazing productivity from internal and external audience gatherings

Reach out to me at mikeb@brainzooming.com or call 816-509-5320.

Brainzooming is flexible and can quickly share an engagement brief to set the stage for getting the most from this year’s funding in the year ahead! – Mike Brown