So let’s consider the other scenario – the scenario where a project manager engages a customer (internal or external) and initiates the entire engagement with them. In this type of situation, still many project managers are inclined to start with the budget first, but that can be a dangerous way to start the planning and estimating portion of the project. Why? Because time is money and everything that goes into the project schedule – every single task, every expensive resource assignment, every deliverable review process and signoff…everything – will cost money and that will affect the budget. That’s why I say, schedule first, then budget.
You can’t run a project on just a budgetBased on my experience on projects and observing my colleagues over the years, the best project managers establish the schedule before finalizing the budget, even if senior management is screaming for the money portion. There may be a need to utilize mind mapping software to plan out how the project is going to get from Point A to Point B and that’s all part of the planning process as well – but it still happens before any significant detail can go into the project budget. It’s truly best to try to determine how much time is really required to complete a project before you let your money – or lack thereof - get in the way of your detailed project planning and real-world thinking.
The experienced project manager can look at a task, understand what’s required, and provide a reasonably realistic guesstimate of the time requirement as if pulling the number from the air. Plus, you have a team of seasoned experts to go over the tasks and either provide very serious estimates or confirm your initial estimates. Be wary of those stakeholders and senior managers who may try to pressure you and your team into planning some unrealistic dates and timeframes or shortened task efforts that are not reflective of reality for the complexity of your particular project. It won’t work and in the end it will still be you explaining why your project is over budget and over time.
The workable schedule verifies the projectBuilding a schedule also verifies the project’s viability. If, when assembling the schedule, time is not on your side, you may need to work out an extension with management or an increase in resources. Working on the schedule might also reveal missing tasks – which in turn affect the budget. And if you were handed a project with the price already set but the project schedule in rough draft mode, then once you’ve mapped out the real project timeline, you can begin to justify the change orders that will likely be necessary to really get the work done. Remember - it’s all interrelated, so expect to adjust budget as you adapt the schedule.
SummaryAs project managers, we are often pressured to think money first, schedule second. I used to have a VP that would ask me to plan out our staff’s approximately $350k budget every year and then she would reject it at least three times until I turned in the number she was looking for. Frustrated, I just started asking her for the number she wanted so I could back everything into it – because I was giving her ‘reality’ and she didn’t want it. It’s a bad way to manage. Work the real timeframes into the schedule, then put together a budget that really works for the project.
Brad Egeland is an IT veteran of 27 years having worked as an application developer, manager, project & program manager, consultant and business strategist and is the author of BradEgeland.com