What
it is: Develop a High-Level Budget
Description
A high-level budget is a summary of the estimated
costs to complete the high-level project milestones. Generally,
there are three types of costs that can be included in
a high-level budget:
- Labor costs
- Material costs
- Non-labor costs.
Rationale/Purpose
The high-level budget gives the Project Sponsor
an estimate of the total expenditures expected for the
project and serves as a basis to allocate monies to support
the project.
The high-level budget is a preliminary estimate for
the project. The detailed budget estimate is produced
in the Plan Stage when more detail about the project
is known. The detail budget becomes the baseline for
the Execute and Control Stage.
Who is involved
Project Manager
Project Sponsor
Project Stakeholders
Result
This information is included in a separate section
of your project charter often referred to as:
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.
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What to do
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How to do it
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1
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Estimate the cost for each high-level milestone
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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
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2
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Estimate on-going maintenance and support
costs
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Include estimates for on-going maintenance
and support costs if this information is required
for your project.
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3
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Estimate the costs at the level of detail
you understand
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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.
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4
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Identify the project cost by fiscal quarter
and/or fiscal year
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Determine the budgeting period based on the
needs of your customer and the size of your project.
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5
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Document the basis for the cost estimates
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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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Templates/Examples: Develop a High-Level Budget
Introduction
The table below provides several tools and
templates you can use to help identify a high level
budget for your project.
