Project Budgeting and Estimating: Taking Control of Your Projects

You Will Learn How To

Create an accurate budget for any level of work from individual project tasks to entire portfolios
Estimate tasks using activity-based costing, and aggregate to project budgets
Aggregate individual costs to form a project budget
Quantify risk to justify contingency funding and produce a defensible baseline
Manage the programme budget, allocating funds to projects with the best rate of return
Leverage Earned Value Analysis to determine project status, forecasts and any necessary corrections

Course Benefits

Project managers are under constant pressure to deliver their projects under budget, yet projects in every industry often exceed their original budgets. This course provides the skills to estimate realistic budgets for completing planned project scope. You also learn how to leverage an approved baseline budget to support the organisation's strategic objectives.

Who Should Attend

Anyone who wants to learn about budgeting, including project and programme managers, department managers and team members. Project management experience at the level of Course 296, "Project Management: Skills for Success", or Course 340, "Project Management for Software Development", is strongly recommended.

RealityPlus™

Through an authentic case study-based simulation, you gain experience creating and managing a budget on a large-scale project. Role-playing, individual and team activities include:

Estimating individual task costs using various tools
Conducting peer reviews of individual estimates
Categorising costs
Building the budget baseline
Adding contingency funding
Creating an earned value performance report
Forecasting and recommending next steps
Determining projects to fund
Identifying budget policy violations
Constructing a cash flow
Leveraging lessons learned

Course Content

Introduction to Project Budgeting and Estimating

Preparing realistic budgets
Burning through a project budget
What's in it for me: living within your budget

Aligning Budgets from Small to Large

Structuring budgets and defining roles

Delegating individual budgeting activities
Connecting project, programme and business budgets

Leveraging the four functions of the budget

Planning and justifying the project
Coordinating and communicating between stakeholders
Monitoring progress
Evaluating budget performance

Cost Estimating at the Individual Task Level

Activity-Based Costing (ABC)

Working with the Cost Breakdown Structure (CBS)
Relating the CBS to the budget based on the organisation's standards

Categorising costs

Determining activity-level direct, indirect and other costs
Aggregating tasks up to total individual costs

Project-Level Budgeting

Mapping to the project life cycle

Correlating budget detail to the life cycle stage
Producing deliverables that facilitate phase-gate decisions

Working with estimation tools

Adjusting an analogous estimate to suit your current project
Calculating the budget using parametric Cost Estimating Relationships (CERs)
Increasing confidence levels with three-point estimating

Incorporating project-level cost categories

Accounting for resource commitment levels
Collecting individual cost estimates
Adding in overhead and general and administrative costs

Forming the interim cost baseline

Determining the Total Project Cost
Managing the team's estimation process
Setting the standard of estimation
Conforming to granularity and accuracy requirements

Quantifying Risk and Finalising the Baseline

Analysing quantitative risk

Assessing probability
Establishing the monetary value of the impact

Allocating a contingency budget

Prioritising risks using a Pareto analysis
Locating and controlling contingency
Pricing a mitigation plan

Declaring and revalidating project value

Valuating hard and soft savings
Stating the customer's value proposition for baseline approval

Allocating Programme Funds

Managing the programme portfolio

Conducting project inventories
Prioritising investments
Eliminating low-return projects
Generating the Rough Order of Magnitude (ROM) estimate
Applying PERT analysis to the entire project
Managing incoming project estimates

Forecasting future values

Calculating potential results using decision trees
Making predictions using Net Present Value (NPV)
Balancing costs and benefits for maximum return on investments

Improving the organisation's budgeting process

Applying Kaizen for continuous process improvement
Impacting the organisation's bottom line

Defending your project budgets

Calculating rate of return
Balancing project and opportunity costs
Supporting the strategic mission

Measuring Budget Performance with EVA

Performing budget-based Earned Value Analysis (EVA)
Correcting for variance from baseline
Forecasting budget performance based on actuals
Determining when to rebaseline

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