| What
it is |
How
to |
Templates/
Examples |
|
| |
| How
to: Develop a High-Level Budget
Principles for developing a high level budget
Estimating project costs involves a combination
of science, logic, common sense and experience. Listed
below are several guiding principles to keep in mind:
- Focus on the costs factors that depend on the
needs of the specific project. (i.e., a system
development project may have different costs than
a project to install a new network.)
- Refer to cost estimates of similar projects in
the past that were accurate.
- Solicit the opinions and feedback of project
participants to get a broad spectrum of information,
experience and opinion.
Recommended actions and strategies
The table below describes several ways to
estimate project costs.
|
What to do |
How to do it |
1 |
Estimate the cost for each high-level milestone |
Cost can be categorized as labor, material
and other costs as appropriate.
Examples of cost factors:
- Labor - Labor Rates
- Material - Vendor Quotes
- Material - Platform Site Cost
- Other - Training Cost
|
2 |
Estimate on-going maintenance and support
costs |
Include estimates for on-going maintenance
and support costs if this information is required
for your project. |
3 |
Estimate the costs at the level of detail
you understand |
If the project spans a long period of time,
it is difficult to predict the estimate for work
a year or more in the future. In this case provide
an estimate for the entire project at a high
level, and a detailed estimate for work for the
next phase or period of time. |
4 |
Identify the project cost by fiscal quarter
and/or fiscal year |
Determine the budgeting period based on the
needs of your customer and the size of your project. |
5 |
Document the basis for the cost estimates |
Identify fundamental assumptions used to develop,
calculate or explain the cost estimates. For example,
the basis for calculating the labor cost might
be a standard labor rate multiplied by staff hours. |
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Updated February 1, 2006 - v1.0
