5 Practices For Managing a Sustainable Project Budget!

As I learned in project management and business analyst course, let’s go over what I consider to be my own five essential techniques for developing and managing a sustainable project budget.

1. Reviewing the project pricing.

You’ll want to start with whatever the salesperson or account manager left off with when setting the budget from the beginning of the project. Because that’s where the project’s cost originated. It’s taken some time, thought, and effort to come up with at least a high-level list of requirements, timeline, resource plan, budget, and pricing, and it’ll be the ideal starting place for the project manager. There’s no reason to start at the beginning… it’ll just annoy a project customer who is eager to get started.

2. Revising the schedule with real resources.

You may not have a full team yet, but you can assess the draught information from sales and derive your resource plan for the project based on what they put together, any statement of work (SOW) you may have, documented assumptions, and the draught project schedule and high-level tasks that were put together.

3. Converting the resource plan into project dollars.

As I learned in project management and business analyst course, it is then time to put those ideas, draught figures, and historical data to work. For example, on a technical project, if you have a Functional Design Document (FDD) to put together and know that it usually takes 60 hours of work for a Business Analyst and 40 hours of work for a Technical Lead to put together and produce, plus another 20 hours for team member peer review and 4 hours for customer discussion, you’ll probably come up with a price of around $20,000+ at the going rates on projects for this.

A Technical Design Document (TDD) from which the dev resources will actually create a tech solution will most likely be priced similarly. You keep doing this until you’ve created a reasonably full resource plan and, as a result, a reasonably complete starting project budget. What if the pricing is significantly different?You hope that doesn’t happen, but it could. You may have put in up to $1,130,000 in effort, but the project was only worth $750,000 when it was sold. You’ve created an issue for yourself. On a tech project, the client should give an estimate and maybe a “not to exceed” price, but it should be presented as a time and materials project. That’s the best case scenario, but you still have to explain to the project customer a possible 51 percent higher price (($1,130,000 — $750,000) / $750,000) and assist them up off the floor.

4. Maintaining the budget and forecast.

After then, there’s the weekly process of monitoring, evaluating, and adjusting the project budget projection. You could put it together and forget about it, but that’s a prescription for catastrophe. Make linkages in accounting, and do whatever you can to have quick and simple access to weekly project billing and financial information, which you can then put into whatever platform you’re using for project financials and resource planning.

5. Making sure your team is charging accurately to the project.

Let’s assume we’re operating in a matrix setting where project resources are sought and borrowed on a project-by-project basis, and that these resources don’t work for project managers but for department managers (like application development managers for the technical development resources). For job and performance assessment reasons, every resource wants to seem to be 100 percent — 120 percent productive. Every department head in charge of these assets desires the same thing. What exactly does that imply? That implies you, as the project manager, are aware that each resource intends to log 40–50 hours each week on their timesheet. Those hours have to be put to good use.

Want to learn more about the same? Enrol in a business analyst or project management certification training program today!