Building a Project Plan to Support Budget Management

Budget management is a key aspect to overall project management. Many times, projects are judged on budget alone to determine their level of success. To enable and empower project managers to effectively manage and control the budgets on their projects, they need to be given the tools to do so. This includes providing the necessary latitude to construct project plans that allow for detailed budget tracking and management.

Why Is This an Issue?

A lot of organizations (consulting and otherwise) have PSA (project services automation) systems that are designed for project management, organizational financials, human capital management and of course – timesheets. These systems are designed to allow for project managers to set and control tasks that add up to the project budget and also to allow team members on those projects to log time against those tasks. Seems pretty logical so far. Where a lot of organizations run into issues is the conflict between project managers wanting as much detail as possible on their project tasks (where a budget is set and actuals to be tracked) and team members seeing their timesheets cluttered with a massive amount of tasks for which they are to select and log time towards – as opposed to a smaller number of ‘blanket’ tasks that are used to trap hours against a project, but not much use otherwise. When there is not the level of detail defined in a set of project tasks (with budgets and actuals), it’s next to impossible – outside of socializing the issues – to track common trends among project overages, and as such even more difficult to find trends that can be addressed to help improve project delivery (and margins!).

What is the Answer?

This needs to be answered on an organization-by-organization basis. This is not a one-size-fits all solution. The needs of the organization as a whole need to be considered and conflicting priorities addressed. Usually there is some level of compromise made between both sides. To make time entry as efficient and painless as possible but also to achieve a level of granularity with your project plans to allow for detailed analysis is usually the answer. Each project and project type is different but a general rule of thumb that I like to follow is around the 24-40 hour mark for tasks. Too much more detailed than that and you’ll lose your team member buy-in to the process. Too much more high level than that and you lose all granularity and ability to pinpoint specific trouble spots on your project. Discuss this with your organizational leads and see what makes the most sense.

#BudgetManagement #PSAsystem #ProjectManager #ProjectEfficiency

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