Updated: Jul 9, 2021
Tracking the budget of a project is the most visible high priority task for a project manager. Luckily, it’s also the most automatable process there is since there is almost zero subjectivity when it comes to tracking your budget. The human factor comes into play when determining what to do about budget overruns. When finding ways to automate your budget management here are some key things to look at automating so that your project management team can focus on solving problems rather than collating and adding numbers.
Budget vs Spend Tracking
When watching your budget, you are constantly looking to see what is your actual spend vs your budget. By having a solution that provides at-your-fingertip reporting to show what areas of your project are tracking under/at/over budget will help the project manager determine where their efforts need to be spent to curb any potential (or actual) overages. By being able to drill into specific areas, tasks or phases of the project to identify the problem (or successful) areas of your project when it comes to budget.
Earned Value Management
I am a huge proponent of using earned value management (EVM) to help forecast how your project is going to look when the ribbon is cut and the dust settles. When automating your budget management you should take the time to consider how you can gather regular input from your team members (or yourself if you so choose) on what effort remains to deliver your scoped project. By using this data, stacked up with your actuals to-date, you get a very clear and justified estimate of what your project budget will look like when the work is complete. This allows you to mitigate risks before they become real issues when it comes to tracking your budget. Something as simple as having team members input estimating remaining hours alongside their timesheets. Keep in mind that when using EVM that the output is only as good as the data being input so there may need to be some coaching of team members on how to properly estimate time remaining.
Speaking of timesheets…..it is absolutely imperative that whatever system you select that timesheets are simple to input. People do not like entering timesheets as it is (which can lead to missing or inaccurate timesheets) so ensure that when selecting and configuring an automated system that timesheets are given a lot of consideration. Having accurate time tracking is the cornerstone of strong budget management and when looking to automate that aspect of your delivery methodology it needs to be as simple as possible to get the maximum buy-in from your team members.
Stay tuned for more posts about productizing your implementation focusing in other vital areas of your project delivery!