课程: Project Management Foundations: Budgets

Budget information sharing

课程: Project Management Foundations: Budgets

Budget information sharing

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- I've heard the statement, "Executives don't read," often, even when I was an executive myself. It's inaccurate, but that doesn't mean it's far from the truth. (chuckles) When managing a team of over 450 people, I received over 300 emails a day, and there was no way I could read every word of those emails, not to mention the attachments. So from many people's perspectives, I didn't read. Yet every executive is keenly interested in the financial status of their scope of work. As project managers, we have the tools to produce financial reports and we don't want them to go unread. PMI recommends using information radiators, brief charts that quickly convey your budget status. There are a few charts that I strongly recommend and examples of each of these charts are included in the exercise files. The first is your Spending Over Time compared to your plan. The X-axis is time and the Y-axis is money spent. The orange line is your actual spending and the blue line is your plan. In example one, the orange line is below your blue plan line, so you have spent less than planned. In example two, the actual spending orange line is above your blue plan line. So you've spent more than planned. Consider including a one-line explanation of your budget status. This is important because spending more than prepared isn't necessarily bad. If you've completed more tasks than planned, you could be in good shape. The Spending Over Time chart works well if you're managing an agile project. Combined with a feature burndown chart, which plots the amount of work completed, you can tell a complete story. My second recommendation is to use Earned Value charts if you have the timely data required to use that approach. You plot the earned value or EV and the actual costs or AC on a single chart that tells the whole story. If your EV is higher than AC, you're in good shape. Conversely, if your actual costs are higher than earned value, you've spent more money than you planned for the task you have completed. See the exercise files for Earned Value chart examples. My 3rd go-to chart plots the cost to address risk on your project. A reasonable project will include contingency reserve funds to mitigate risks. This chart is similar to the overall Spending Over Time chart, except it plots the costs you plan to address risks over the actual risk contingency spending. For additional information, you can include the funding from management reserves and your contingency budget. While using these charts is effective, it's important to have detailed cost reports by task and for each purchase because you never know when an executive might decide to read something.

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