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Fool Proof Project Planning Essentials every Project Manager should know!

 

Project Planning Essentials - The Project Specifications and Work Breakdown

The Project Budget Defined

A Project budget is the total sum of money allocated to a project for a specific time.  The purpose of this budget is to control project costs and deliver the project on time.  When drawing up a budget, use these tips to guide and assist you in creating a workable budget that will not only work for you the Project Manager, but your team and stakeholders alike:

  • If you are drawing up a budget for the first time, it would be adviseable to obtain a model from a similar project that you can base your budget on.  Use this outline to create your own budget quickly and effectively.
  • Know what resources are required so that you can work out base costs.  Monitor resources to ensure that they are being used wisely throughout the project.
  • Build in a method to monitor actual vs. budget costs throughout the project so that you can tweak when necessary.
  • Monitoring your budget can be made really easy by using a spreadsheet, such as this Budget Analysis and Forecasting Template (MS Excel, 15 KB) developed by Brad Egeland.
  • Work closely with your team.  Ensure that they are aware of the budget, and that they understand the importance of keeping within the budget and the impact on the entire project.   This will eliminate conflict when changes have to be made.
  • Know the difference between:
    • Direct Costs – Labour, consultant fees, travel, materials, plant and equipment;  and
    • Indirect Costs – Telephone, office space and equipment, insurance.
  • Using Project management software or programs written specifically to set up, monitor and work with projects is always recommended and will relieve many stress factors, as they have built in checks and allow for budgeting and monitoring of budgets throughout the project.
  • Time Management is essential in any project to ensure that you come in on budget.

Which of the following are "Direct Costs" to a project?

  • Telephone
  • Labour
  • Insurance
  • Office Space