Budgeting of a Project

Completing the project within budget

Completing the project within budget is one of the greatest challenges that project managers face. Creating a budget that will accomplish objectives is a significantly complex task that requires time. Ordinarily, clients expect projects efficient execution of projects but sometimes cost pressures can emerge in the course of project implementation, thereby undermining the efficiency. Most budget crises arise where the project ends up costing two or three times the budget. Effective budget planning at the beginning of the project and after every stage of implementation ensures that running out of funds when the project halfway does not occur. Upon completion, most projects with proper budgeting come in at or under budget. Therefore, allocating sufficient time during the stage of planning can facilitate certainty in the project schedule.

Setting funds aside for mitigating potential risks

Apparently, setting funds aside for mitigating potential risks that arise during different stages implementation a project minimizes unnecessary delays (Hillson, 2012). The most appropriate budget planning is done by tracking the real costs of each part of the project and comparing it with the estimated costs for accomplishing the work. Consequently, the project management team analyzes the information obtained to establish all the potential deviations, revise the estimates accordingly and take corrective actions that might be necessary to successful implementation of the project. For example, is the project team estimated that designing footbridge over a particular river could cost 700 hours and the bridge ends up costing 650 hours, the team will capture the deviation between the budgeted costs and the actual cost of designing the bridge, revise it as required and take a corrective action in case the deviation exhibits a persistent the trend.

References

Hillson, D. (2012). Practical project risk management: The ATOM methodology. Berrett-Koehler Publishers.