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Project Budgeting Lessons

Project Budgeting Lessons. Presentation to IS 230 Fall 2002 Diane Ghorbani. Project Budgeting Lessons Outline. When is a budget needed? What is included? How do you get it approved? What do you do after it is approved Things to watch for Post Mortem on Examples.

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Project Budgeting Lessons

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  1. Project Budgeting Lessons Presentation to IS 230 Fall 2002 Diane Ghorbani

  2. Project Budgeting LessonsOutline • When is a budget needed? • What is included? • How do you get it approved? • What do you do after it is approved • Things to watch for • Post Mortem on Examples

  3. Project Budgeting LessonsWhen is a budget needed? • New Project Idea • Online Banking project • Banking Center Automation • Consumer Lending project • Extension/Enhancement • new release on engineering product • Justification of current activities • lease versus purchase decision on computer equipment • Change required by other activities • HR/Payroll system decisions – vendor support

  4. Project Budgeting LessonsWhat is included? • Starting point (Project Mgt Phase I) • Project Sponsor – who is it and what are their motives • Get team of people who will be key involved at this point! • Determine what areas need to be considered • In-house developed vs Vendor supplied services • Number of locations impacted • Get the basic project definition if you can

  5. Project Budgeting LessonsWhat is included? • RFP – request for proposal • Have team members work on it • Not bad to let a vendor review it • Insist upon consistency in format for response and pricing information • Know how you will evaluate before you send it out • Have top 2 or 3 come on site for presentation • Incorporate RFP response into contract, helps ensure performance

  6. Introduction/overview Section 1.0  TIFS background Section 2.0 General requirements Section 3.0 Response format requirements Section 4.0 Proposed schedule Section 5.0 Response content/format Section 6.0 Current environment Section 7.0  Organizational detail Section 8.0 Technology overview Section 9.0 Management overview Section 10.0 Specific areas Section 11.0 Network management Section 12.0 System administration Section 13.0 Other support services Section 14.0  Selection criteria Section 15.0 General corporate information Section 16.0 Network management Section 17.0 Monitoring Section 18.0 Notification Section 19.0 Reporting Section 20.0 Installation Section 21.0 System administration Section 22.0 Other support services Section 23.0 Help desk services Section 24.0 General support Section 25.0 Value added services Section 26.0 BCA deployment Section 27.0  Pricing Section 28.0 Glossary Section 29.0  Appendices Corporate level details Systems administration table Location tables Network Diagrams RFP – how much is enough?

  7. Project Budgeting LessonsWhat is included? • The Business Case Document • The Cost components • What is in vs out? • GAAP or Cash? • Revenue Assumptions • Understand how it will tracked by accounting

  8. Project Budgeting LessonsWhat is included? • The Model – • Know what can change and build it into model • Build in levels of summarization • Document assumptions clearly • Review • Be sure the team is in agreement • Have an accountant review it • If vendor involved, be sure they review and agree

  9. Project Budgeting LessonsHow do you get it approved? • Presentation at various levels • Understand the approval levels in org • Approval at sponsor level (usually a dept then absorbs costs) • Approval of an operational committee or steering committee (usually costs absorbs across various depts) • Board level approval • If you are presenting, at any level, do some work ahead of time with parties to be sure they are not caught off-guard

  10. Project Budgeting LessonsHow do you get it approved? • Be sure to present assumptions made in the budget • If risks are high enough, present scenarios – most likely case and worst case • In contentious situations, Sponsor may want to hire a consultant to review numbers, present and give recommendations

  11. Project Budgeting LessonsWhat do you do after it is approved? • Determine who will be responsible for reporting on budget versus actual – someone will ask • If you are responsible find out what reports are available for you to monitor • Watch actual activities versus your assumptions – many problems with budgets resolved here • Make sure sponsor knows what the costs are so they can defend

  12. Project Budgeting LessonsMisc things to watch for. • Be sure to consider what cost of outsourcing at all levels of the project is • Watch out for scope changes on the project • Manage the vendors you pick carefully during the project and long-term – especially with problems in IT industry, they may go out of business • KISS – fancy budgets are works of art but usually get little attention, most people want to see logical flow to the answer

  13. Project Budgeting LessonsProject Post Mortem • Online Banking project • Banking Center Automation • Consumer Lending project • new release on engineering product • lease versus purchase decision on computer equipment • HR/Payroll system decisions

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