The Money Files

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A blog that looks at all aspects of project and program finances from budgets and accounting to getting a pay rise and managing contracts.

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3 Project Budget Mistakes [Infographic]

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3 Project Budget Mistakes [Infographic]

Categories: budget

I know this is a topic I have returned to several times, but I feel really strongly that project budgeting shouldn’t be hard, and we should all learn from past experiences. In the infographic below, I share three really common budgeting mistakes that I see happen time and time again, especially with project manager who are managing project budgets for the first time.

I’m sure you can think of other errors that newbie budgeters might face. Why not leave a comment below and share some of your tips about what to look out for when creating a project budget for the first time?

For more on the tax issue, take a look at this article, which discusses common budgeting mistakes and especially the tax thing, in a bit more details.

Posted on: November 05, 2018 03:38 PM | Permalink | Comments (16)

Comparing Management Reserves and Contingency [Infographic]

Categories: budget, contingency

Budget “overs” are a way of filling the gaps in your budgeting process and acting as a safety net for when things go wrong, right?

Not exactly.

Management reserves and contingency reserves are two very specific types of “extra” money in your project budget. They both have distinct roles to play in helping the business achieve the deliverables in line with the forecasted expenditure.

In this infographic I summarise the differences between these two different types of funding. Personally, I think contingency reserves are the more useful as they are tied to a specific event so they help improve risk management as well. What do you think?

You can read more about some of the ideas on this infographic in this article.

Posted on: September 06, 2018 04:58 PM | Permalink | Comments (13)

3 Things I Wish I Had Known About Project Budgeting [Video]

Categories: budget, video

I’ve been managing projects for a long time, and I’ve had budget responsibility (at least for the tracking, if not the actual spending) since virtually the beginning. In this short video I summarise 3 things I wish I had known about project budgeting. These are the hard-won tips that I’m sharing so you don’t have to make the same mistakes or wonder the same things!

Read more here: http://www.projectmanagement.com/blog/The-Money-Files/7491/

 

Posted on: May 17, 2018 11:59 PM | Permalink | Comments (5)

Project Budgeting Tips [Infographic]

Categories: budget

Wondering how to manage your first project budget? This infographic I created has some simple tips.

Budgeting tips infographic

You can read more about some of the ideas on this infographic in this article.

Posted on: May 13, 2018 03:16 PM | Permalink | Comments (13)

Simple Measures for Your PMO To Track

Categories: budget, PMO

What does your PMO track about the projects in your business? It’s often difficult to know where to start, especially when some of the measures you might hear about take a lot of data and relatively mature systems in place to start tracking them.

Here are some simple measures that you can track, and at the end of this article are some that are a little bit harder to put in place but are definitely worth the effort.

Number of projects stopped

You can track how many projects are put on hold, cancelled or otherwise stopped. As a number, it doesn’t give you the whole picture, but with some narrative as well it provides some information about how good you are getting as a business at choosing the right projects to do.

% Increase in projects delivering to time and scope

Hopefully you’ll see this number trend up. It speaks to predictability of delivery: how good you are at making sure projects do what they said they would.

% Increase in projects delivering on budget

Hopefully you’ll also see this number trend up. It speaks to predictability of cost: how good teams are at estimating and managing project budgets as they said they would. You could also look at tracking the % of projects with cost overruns and what these are – with a view that it should be going down as maturity improves.

Customer satisfaction

Whether you work for external clients or internal stakeholders, you can ask them how happy they are with your service! It’s easy to track customer satisfaction and the measures can tell an interesting story.

% of Projects on a Red/Amber Status

Measure the number of projects with a red or amber status at gate reviews, stage reviews or at monthly reporting. Alone, this number doesn’t tell you much, and you certainly don’t want to encourage project teams to under-report problems just so their projects aren’t counted in the monthly numbers. However, combined with other measures it can be an interesting (and easy) number to track. You might also want to add the time period that a project has been on the status of red as this would tell you that the issues are not being resolved, or that the project is hitting multiple issues time and time again – also good to know.

Project management skills

If you have a career path, or defined competencies for project managers, you can track the department’s overall growth in skills maturity. Measure competence at the beginning of the year, do your training programme or whatever, and then measure again at the end of the year. It’s a simple way to show that your staff are getting better and that should have an impact on the success of your project management delivery.

Organisational maturity

As you would for project managers, use one of the PMO maturity models or organisational project management maturity models to measure your business’ maturity when it comes to progress. Then take the measure again in 12 months.

This can be subjective, and it feels like ages before you can do the measure again, but it is certainly interesting to see how things have changed!

Here are some other measures, slightly harder to implement.

  • Reduction in benefits loss
  • % of actual benefits delivered compared to what was planned in the business case
  • Reduction in projects started for the wrong reasons (you’ll have to work out what “wrong” means)
  • Reduction in overall resource costs across the delivery portfolio (which is hard to do if you don’t track staff time on projects)

What other measures do you use?

Posted on: February 26, 2018 08:59 AM | Permalink | Comments (10)
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