Truc Pham TrungCEO & Founder| GTARGET CONSULTANT CO., LTDHo Chi Minh, Viet Nam
PMBOK 6th does not mention on this thing. It makes us a lot of confusing. If I am a freelancer, is asked to issue a quotation, for developing an application project. After many iterations, the buyer agrees my proposal ($10,000), so is this the project budget? Saving Changes...
Truc Pham TrungCEO & Founder| GTARGET CONSULTANT CO., LTDHo Chi Minh, Viet Nam
Feb 03, 2019 10:31 AM
Replying to Sergio Luis Conte
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@Truc, besides the academic component, answer is simple: who will pay for that? She/He is who will approve the budget.
Thank you, Sergio. Any place in the 6th mentioned on that? I did not see in the 6th. From my understading, always is sponsor, an internal stakeholder. Saving Changes...
Sergio Luis ConteHelping to create solutions for everyone| Worldwide based OrganizationsBuenos Aires, Argentina
Feb 03, 2019 10:31 AM
Replying to Sergio Luis Conte
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@Truc, besides the academic component, answer is simple: who will pay for that? She/He is who will approve the budget.
You will not find it inside the PMBOK because is outside of the PMBOK scope. Perhaps you will find an answer if you see a table inside the PMBOK (I do not remember the page) related to "who manage the project budget?". The problem with the PMBOK is the term budget that is incorrect because as you see all inside the PMBOK is related to cost which are a component of the budget only. So, as project manager, you will calculate the cost component of the budget, not the budget itself. Saving Changes...
Viraj GandhiProject Engineer| NMDC EnergyAbu Dhabi, United Arab Emirates
Project sponsor approves the project budget. Project sponsor is generally internal top boss of an organisation. Customer as an entity is considered as external party. Customer gives order to organisation and top boss of the organisation allocates budget for project considering margin.
As a freelancer, the project budget+margin will be project quotation presented to customer where margin may or may not be disclosed to customer. For customer as such, approved final quotation will be project budget. Saving Changes...
Thomas WalentaGlobal Project Economy ExpertHackenheim, Germany
There may be different budgets for a single project. Each may be approved by different authorized people.
1. a budget limit may be mentioned in the project charter, this is approved by the sponsor, who represents the organization which delivers the project. It may come from a business or a contract.
2. Project planning results in an estimated time-phased budget (in earned value terms = PV curve ending in BAC), it includes often any contingency reserves, it is promised by the project manager and approved by the sponsor. Changes only as result of an approved change request.
3. Contracted budget, approved by the customer. Initially, and normally, the contracted budget includes management reserves and profits and is higher than the budget limit in the charter, which is higher than estimated time-phased budget. If it needs to change, a formal contract change is to be approved.
4. Funding limit - in the case of multiyear projects, often only a budget is approved for one year, approval by the finance organization. It is prudent to request more funding than the estimated time-phased budget allows. Saving Changes...
Senior Projects Manager | Field & Marten AssociatesNew Westminster, British Columbia, Canada
If $10,000 is what was agreed to then yes, this is your project budget. As who approves it, it depends, sometimes it is the sponsor, othertimes someone else from PMO depending on the organization. Saving Changes...
Stelian ROMANProject Manager| MicroSafetyCarlingford, New South Wales, Australia
I agree with Sergio (as most of the time): you will have the same signature on the budget section of the project management plan or the order and on the cheque.
From the question I assume that your process is very simple: find a client, agree on scope and cost, do the job, get the money. In that case the budget is how much you can afford to pay yourself and/or your developers before you get the first cheque. Saving Changes...
NITIN SINGLAVP - Principal Lead, Islamic Banking and KSA| First Abu Dhabi BankDubai, Dubai, United Arab Emirates
Hi Trunc,
In case of a Buyer-Seller relationship within a Project there are atleast 2 projects being executed - One from the Buyer Side and Another from the seller side.
While in case of a Buyer, it will be the Project Sponsor from within their organization who will be approving the Project Budget and hence paying for your services.
In case of the seller, which is in your case, there will be a unit head or function head who would agree to undertake this project at the cost agreed with the customer. Based on the approved cost, provisioning will be done in your books for the net cost to company and the expected profit that will be realized at the end of the project. This would create a Project Budget for your Project within which the team will be required to deliver the agreed scope and timelines. Saving Changes...
Stelian ROMANProject Manager| MicroSafetyCarlingford, New South Wales, Australia
I believe that many missed the $10,000 budget. That's not a project. It's a service contract between a developer and a client. Saving Changes...
Truc Pham TrungCEO & Founder| GTARGET CONSULTANT CO., LTDHo Chi Minh, Viet Nam
Feb 03, 2019 10:31 AM
Replying to Sergio Luis Conte
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@Truc, besides the academic component, answer is simple: who will pay for that? She/He is who will approve the budget.
As a contractor, your own budget includes both your planned expenses, and the margin you expect to keep for yourself, while the customer's budget includes your $10,000 and contingency funding. Saving Changes...
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