Project Management
Certification & Training

By Dick Billows, PMP, GCA

Summary: Most project managers do not develop a project budget even though it is a matter of a few minutes effort in Microsoft Project. However, budgets are a valuable ally in the scope control battle because they let us quantify the cost of changes to the scope.

Controlling the project budget with project scope

While smaller projects often proceed without a formal budget, with larger efforts and as we cross more departmental boundaries, we usually develop a project budget. Budgets are, however, a very valuable asset for project managers in the scope control process. If there is no budget then the project is "free" to the users or recipients. In that situation, it's very difficult for the project manager to control the scope because the project and its changes have no cost to the people asking for them. When we develop a project budget, we'll include the cost of each hour of work for our project team members as well as the costs being charged by outside consultants, vendors and contractors. Using project management software makes this process much easier during the initial planning stages and has even larger benefits as we need to reflect the cost of changes in our status reports.

Cost & Budget