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/
Project Budgeting Tips [Infographic]
Wondering how to manage your first project budget? This infographic I created has some simple tips.
You can read more about some of the ideas on this infographic in this article.
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.
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.
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.
What other measures do you use?
This short video gives you some tips on how to manage the situation when your project funding is reduced. For more detail on what you should do if your project budget is cut, check out this article.
What’s new in Project Cost Management: Plan Cost Management Process – read the first part of this series here.
What’s new in Project Cost Management: Estimate Costs Process – read the second part of this series here.
What’s new in Project Cost Management: Determine Budget Process – read the third part of this series here.
In the last article I looked at what was different about the Determine Budget process in the new PMBOK Guide®-- Sixth Edition. In general, what I’m feeling about the whole knowledge area is that Project Cost Management has been simplified and streamlined, rather than given a total overhaul. Today, I want to look at what’s different in the next process: Control Costs.
Control Costs Process
The fourth process in this knowledge area is Control Costs, and it has been given a spruce up to bring it in line with other processes. However, while it might look different in places, I’m yet to uncover anything radical about how you should approach managing costs on your project.
We have moved into the monitoring and controlling process group.
There were 4 inputs and now there are 5.
The new one is project documents. The lessons learned register specifically gets a mention. I think this reflects an overall understanding in the PMBOK Guide® -- Sixth Edition, that actually we do need to continue to look at what’s working and what’s not throughout the life of the project, not just at the end. I wrote a whole book about this topic, so I’m delighted that it’s finally making it into the mainstream. And, of course, it’s a lot more agile in thinking, than the old way of managing project lesson learned meetings.
Tools and Techniques
The number one T&T from the previous edition was Earned Value Management: now it is Expert Judgment.
I doubt many people will be losing sleep over that!
However, Earned Value is still in there, under the heading of data analysis. Other data analysis techniques that get a mention include:
There does seem to be an overlap with expert judgment here, because the expert judgment examples also include earned value analysis, forecasting and variance analysis. You do need to apply expert judgment to use these techniques, so perhaps that’s why. It reads as a duplication though which I think is confusing.
The project management information system gets a mention as a new T&T, only because project management software has dropped off. PMIS is a more inclusive term, I think, and it makes more sense to use this throughout as it can refer to lots of different types of systems that you can use in your day to day work. PM Software just makes me think of scheduling tools.
Organisational process asset updates have dropped off the outputs. There aren’t any new ones so it means that at the end of this process you end up with:
That’s the last of Project Cost Management process. Overall, I think that the updates have been kind to this knowledge area. The changes have made it a lot easier to adapt the process to your environment because instead of mandating particular inputs or tools, you have the flexibility to use what you need now.
In real life, you’ve always had the ability to use what you need, but the updated standard has given less confident project managers the ‘permission’ to flex their approach as required.
The downside of a more flexible, tailorable approach is that the project manager needs to apply more professional judgment to know what’s acceptable and what is going to work. That’s hard to do if you don’t have much experience. It will be interesting to see how the changes affect people day to day, if they do at all.
What do you think?