Chapter 4: Creating the Budget

Overview

This chapter is about money. Have you ever noticed how people bristle when that word is mentioned? In some circles, it s not money; it s finances, working capital, currency, or funds. Whatever you want to call it, it s a large part of what you need to get your project done. Your project will need a budget to create the product or service your project customer expects. The resources you ll need, such as software and hardware, cost money. The labor you need, you know, the developers , database experts , and network engineers time, as well as the brute force required to install the hardware and software, also costs money.

Your project needs a budget to determine just how much money, er, capital, needs to be allotted, and when it needs to be available, so you can reach the project goal. Your project needs a plan to create estimates and predict the total cost of the project. Your project s budget needs proof of why it will cost the amount you say it will, input from vendors , quotes from suppliers, and estimates on work hours committed to the project. And your project needs a time-phased budget that ties the resources needed with the project schedule.

Budgets may seem to be a necessary evil required by any project manager to get a project off the ground and into implementation. In reality, they re needed so the project stakeholders can see how much it will cost to create the deliverable they desire . In addition, a budget is needed to confirm the project manager truly knows what it is he is to deliver. A dreamy project goal is snapped into reality when management wants to hold you accountable for the cost of the project deliverables. With that in mind, let s get started.