2.0 Build the Schedule and Budget
The project schedule and budget is created along with the Project Charter from Step 1.0. The schedule is a vital tool to ensure that the project team knows what they need to do.
The budget represents the amount of money available to spend on the project. Depending on your organization and how you do your accounting, the budget could contain only the external costs of the project (contractors, hardware, software, material, etc.). Some organizations also include the costs of internal labor in the budget. These organizations typically have some type of chargeback process to allocate the internal costs back to the sponsor or sponsor department.
The Define the Work step ensures you have an agreement with the project sponsor on the work that should be completed. In this step the project manager determines how the work will be completed. Depending on the size of the project, it is possible to use a project management package like MS Project, a spreadsheet or you could even just keep track of the activities in your head.
The Relationship Between the Schedule and Budget (2.0.P2)
The TenStep® Project Management Process has always tied the schedule and budget into a single integrated component. Of course the two concepts are different. The schedule shows the activities required to build the deliverables of the project. The budget shows how much money the project will require.
The TenStep process realizes that these are two fundamental processes are key to the project success, and in many organizations represent the two fundamental components of project success – did we meet expectations for schedule and budget? The two elements of project management are usually linked.
If a project is behind its schedule it is generally over budget as well.
If a project is over budget it is usually trending over its deadline as well. (Of course there are exceptions, but the two elements usually have a common trend.)
If you have underestimated the amount of work, you are generally going to have underestimated both the schedule and the budget element.
The effort hours applied from human resources on the project are going to impact both the schedule and the budget.
They are two integrated elements of the overall triple constraint, which links the schedule, budget and project scope. If the scope of the project is increased (or decreased), the schedule and budget elements need to increase (or decrease) as well.
Project manager experience usually shows that the schedule and budget elements of the project are closely tied.
The Relationship Between Defining and Planning the Work (2.0.P3)
Defining the work is step 1 of the TenStep process and creating the schedule and budget is step 2. However, this numbering does not imply that these are sequential. You will usually find that you cannot complete the Project Charter without starting to lay out the overall project schedule. In many cases, these two deliverables need to be worked on in parallel. As you gather information around scope and deliverables, you will need to start laying out an overall timeline and budget so that you can get your hands around estimated effort and duration. As you get more “definition” information, you will fill in more detail on the schedule. When the deliverables, scope, assumptions and approach are complete, you should have enough information in the schedule to estimate the necessary budget, effort and duration - which in turn are used to complete the Project Charter.