The reason for having a project budget is to limit the cost of a project. But, depending on how the budget is developed and organized, it may be a tool for controlling costs…or just a target (or wish). Successful Project Managers prepare their budgets in ways that make them useful as a tool to more effectively control effort and costs. They need to understand the difference between budget that can be controlled and those that cannot.
By planning how and when money will be spent over the project lifecycle, the Project Manager can avoid runaway train” effect: work is done at the last minute which exhausts the budget before it can be monitored and controlled. By leveraging Earned Value techniques, the Project Manager can know how much work has been produced for the money that was spent at any point in time and how efficiently the work was produced, and therefore; more accurately estimate the cost-to-complete and forecast the total project cost-at-completion while there is still time to take action.
Even in the best managed project, something is bound to go wrong. Budget contingency is used to offset the cost impact of risks that materialize, error-of-estimate, variability in outcomes, and Murphy’s Law. But, knowing how much contingency is enough, is a skill the Project Manager must acquire to be able to forecast the cost of recovering the budget when something does go wrong.
During this 6 part webinar series, you will learn techniques to successfully establish and manage your project budget including:
- Four key principles to effective estimating and budgeting
- Use of data streams instead of data points to forecast budget problems before it is too late
- Earned Value Management techniques as a way to simultaneously monitor and control costs and time
- Use the range of probable cost outcomes to compute contingency
- Being able to prepare and organize a budget that can be better controlled
- Knowing how to diagnose a budget problem so that an appropriate action can be taken to a project budget back under control
All webinars in this series align to the PMI Talent Triangle – Technical