DoIT Project Management Advisor
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Stage 3: Plan the Project
 
 
Activities

 

What it is How to Templates/
Examples
 
 
How to: Develop Project Budget

Recommended actions and strategies
The table below lists the steps for developing a detailed budget:

 

What to do

How to do it

1

Refer to your high-level budget from the Initiate Stage

Use the high-level budget created in the Initiate Stage as a starting point.

2

Refer to budget information for similar projects

Consult with the project team, project sponsor and others in the organization who have worked on similar projects and refer to their budgets to identify costs.

3

Identify the detailed labor costs associated with the project tasks

To determine labor costs, apply labor rates to the detailed tasks, staff efforts and durations in the project schedule. Also include any costs to acquire staff for the project.

Note: Remember to budget for project management costs.

4

Identify the detailed material costs

Refer to any procurement plans that include the costs to acquire equipment, materials and other non-staff resources.

5

Identify any ongoing operating costs

If appropriate for your project, determine rates for ongoing operational costs associated with the project’s product or service.
Examples include :

  • Network costs
  • Customer Support costs
  • Software Licensing costs
  • Advertising costs

6

Identify any other specific costs

Look for potential expenses such as training and travel etc.

7

Build in a contingency by assessing the probability of exceeding those costs

Assign a percentage reflecting how much each unknown factor may affect the project as a whole, or a portion of the project.

Assessing unknowns is very important to a successful budget. Without it, the crises that are an inherent and regular part of any project will affect your bottom line.

The budget estimate should have this contingency built in. It is normal for the overall contingency to be between 20 and 30 percent of the total project cost.

 

 

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Updated February 1, 2006 - v1.0