How to Create the Ultimate Project Budget and Reporting Schedule
Effective project management is essential for every organization that bills out work. That is, if you are hiring consultants, contractors, or part-time workers, you need to understand two critical aspects of project management: budgeting and reporting.
Two aspects of project management that are vital to success are the budget and the reporting schedule. These two aspects involve the money involved in the project and those responsible for saving and earning the money for the business. The role of the project manager is to establish a budget and implement a reporting schedule complete with the responsible parties. Here are a few tips for setting up a budget and reporting schedule for your next business project.
Establishing the Project Budget
The budget is something every executive places at the forefront of their business plan. The best way to sell your project and ensure its success is to properly establish the budget as well as the reporting schedule. Your team will want regular updates throughout the process especially if the project is something new to your business.
Even if you are a company that has yet to nail down the process of budgeting, Gartner recommends that you start somwehere. According to Gartner, “If you are a project manager whose organization is starting its agile transition, you need to know how to run the first few projects. By defining a minimum viable product and fixing duration, project managers can ensure that agile projects will almost always be on time and on budget.” Everyone has to take a first step towards creating processes and establishing business practices.
What is A Project Budget?
According to Gartner’s Simple Project Budget Model, “Project budgets are required for initial funding and outlining early estimated costs by resource categories, such as labor, hardware and software. This model outlines the cost components associated with a simple project and forms a starting point for building a first-cut project budget.”
The 10 Most Common Project Budget Mistakes
CIO.com surveyed project managers and IT execs to determine the most common mistakes involved in creating a project budget. Make sure you steer clear from these mistakes before you get your project rolling.
1. Not Assigning the Right Person the Manage the Project
2. Failing to Get Everyone on the Team Behind the Project
3. Not Getting Executive Buy-In
4. Putting Too Many Projects Into Production At Once
5. Lack of Regular Communications/Meetings
6. Not Being Specific Enough with the Scope/Allowing the Scope to Frequently Change
7. Providing Aggressive/Overly Optimistic Timelines
8. Not Being Flexible
9. Not Having a System in Place for Approving and Tracking Changes
10. Micromanaging Projects
If you’ve worked with a team of business executives you know they think about profit. The budget of a potential project is important to understand for two reasons:
1. It’s important the project will yield profit for the business.
Profit doesn’t necessarily have to happen immediately after the project is complete, but there needs to be a reason for the project to occur.If you’re working on a new website design project, it will need to be beneficial for the business. The website should deliver high conversion rates if you’re selling something or a higher number of quality leads if you’re looking to acquire new customers via the online channel.
2. The project budget needs to be competitive.
Business executives want each project manager to do their homework when it comes to bidding out projects. As the manager, you need to talk to various folks in the industry to get a number of different quotes. You’ll want to focus on what each firm brings to the table that is different. One way to ensure your project is approved in the first place is to do your homework with the offers from various companies. Even after bringing in different quotes you’ll want to ask if there is room in the budget before you agree to take the offer to your team.
Every business leader wants to know they’re getting the best value for their money. This doesn’t always mean the cheapest offer out there, but it does mean the offer with the most value.By looking at various options you’ll ensure your project has the best chance for success. You’ll also be able to better set the budget up front as you’ll know more about how much each aspect will cost.
Setting Up the Reporting Schedule
The reporting schedule is something that should be set up from the beginning, but it’s easy to overlook. There is a lot of focus on establishing the budget with a project, but the reporting schedule is just as important.
What is A Reporting Schedule?
According to Project Management Online, “A Project reporting [schedule] is one element of the project controlling process and project governance. Its purpose is to ensure that the objectives of the project are being met by monitoring and measuring progress regularly to determine variances from the plan. When variances are identified, then corrective action can be taken.” A reporting schedule will help the project succeed for two main reasons:
1. A timeline will allow all parties to plan.
Everyone involved in a project likely has certain goals for a project. Along with these goals there are probably time needs. It’s important to have communication of a timeline before a project is started. You’ll need to establish the needs from each party.
In the website project example there are needs from both the designer and the hiring business. The reporting schedule will involve initial designs from the designer, but the business will also have a deadline to provide content for the website. Sometimes the content is needed before the project can even be started. It’s important to establish this timeline complete with deadlines and roles so the project stays on schedule.
2. A reporting schedule ensures responsibility throughout the project.
As mentioned with the design project, the designer will be responsible for delivering designs throughout the life of the project. In turn, the business will need to provide feedback and content in order for the project to stay on schedule.
It’s important to layout the entire timeline of the project complete with reporting dates and responsibilities. People respond better when they know they are required to do something and to have it done by a certain date. This is good for you, as the project manager, because your team will question the timeline if things are behind schedule. The reporting schedule allows you to have answers for those questions.
In order for projects to succeed there needs to the establishment of a proper budget. This involves doing some research on what the options are for a certain business need. Value is more important than total price level. Most people aren’t cheap. They just want to get good value for their investment.
The second need in all projects is a reporting schedule. It’s important to have a timeline created so you – the project manager – can report back on the progress. A reporting schedule needs to have defined roles and due dates. When people know they have something due they are more likely to complete their own tasks. When each person completes their tasks the project has a high chance of success. Make sure your next project has a proper budget and a reporting schedule and you’ll be setup to have a successful project.