Part 6: Wrap-up
Determining your project budget has been discussed several times on this website. The reason is that many projects experience budget overruns. Many project managers are still having problems determining a good project budget. Based on these facts, I decided to run a series on budgeting best practices.
In part 1 to 4 we went through the steps to develop a project budget, going from project scope to project budget.
The main thing to remember is that developing a project budget is not a stand alone process. Developing a budget involves the scope, the WBS, the schedule and finally the budget. It is a stepwise process as depicted in the following chart.
I know that in real life we often do not want to go through all the steps. What to do when you are in a hurry, is to work fast, maybe using a preliminary scope and go through the steps to develop a preliminary budget, since it was based on a preliminary scope. However, you should never skip a step.
Also realize that there are also other methods to come up with a preliminary budget, such as parametric estimating. However for project approval you need a good budget, not a preliminary budget.
Yes, good project management, requires some self discipline!