Developing a Budget

Developing a Budget
As part of the decision to begin a project, managers might have performed an economic
analysis and allocated a specific amount of funding for the project. Thus, the project team
might need only to validate and refine the budget, given the knowledge of the work plan and
staff availability. If no previous budgeting has been done, the team will need to start from
scratch. For this case, estimate hardware and software costs by performing some requirement
assessment and preliminary design. Most system integrator and value-added reseller (VAR)
companies refer to these as presale activities, providing a basis for a preliminary budget.
The WBS, schedule, and resource plan provide the basis for determining the cost of a wireless
project. Before estimating the cost, you will need to assign resources to each WBS task. The
next step is to calculate labor, material, travel, and shipping costs for each task and phase of
the entire project. Again, you might need to perform at least a preliminary requirements assessment
and design before being able to determine costs associated with the hardware and software
of the system being implemented. Be sure to include sufficient travel costs for site
surveys, onsite installations, and periodic onsite post-installation support.
During the execution of the project, you will need to track whether the project is being completed
within budget. To facilitate budget control, assign unique account codes to project
phases and subcodes to each WBS task. During the planning stages of the project, the initial
budget is likely to be merely an estimate. After completing the requirements and design stages,
the team might need to adjust the budget to reflect more precise information. The following are
the major items of a project budget:
• Labor costs
• Hardware and software costs
• Travel costs
• Meeting costs