- Using the less is more philosophy can work great
for creating project deliverables,
but when building a project budget,
I abandon that philosophy altogether.
The more data you compile, the better your budget will be.
Here's my approach to building a solid project budget.
Project requirements must be compiled,
and you should have a documented work breakdown structure,
or WBS.
According to the Project Management Institute,
the WBS is a breakdown of the team's total scope of work
to accomplish the project objectives
and create the required deliverables.
The WBS is the foundation
around which you'll create your budget.
For each activity in the WBS,
you'll need to estimate the number of hours required
to complete it.
When making the estimate,
you should also note
whether a specific skill level is assumed.
This is important because a senior-level person
may only need 30 hours to complete the task,
but a less experienced person may take 40 hours.
If you have more than one person working on a task,
estimate the hours for everyone.
The unit cost per hour should also be verified.
The costs are usually very different if you assign a task
to a consultant versus an internal employee.
Sometimes tasks are not hours-based,
but they're duration-based.
For instance, it may take three weeks to buy, configure,
and install a machine.
However, you may only need four labor hours
to get this done.
In this case, the task requires a three week duration,
while you only need four hours for completion.
Remember to capture other miscellaneous costs,
such as your project management time, travel costs,
team events, licenses, building leases,
and the tools needed to support the project.
You may also need physical resources,
such as equipment and materials for your project.
This can be hardware, software, raw materials,
or anything necessary to build the solution.
If a tender is required to get materials,
the activities to perform the tender should be included
in your WBS.
This exercise takes effort,
but the result will be a realistic, defendable budget
that delivers the desired project outcomes.
So the more detail you have
in creating your budget, the better.
Well, I'll have to change my tune a bit.
Instead of saying less is more,
I'd say more is more when building a project budget.