7.3 Determine Budget
Process Definition
After activity cost estimates and basis of estimates have been determined, the project manager must aggregate those costs into a total project cost baseline. This produces the total project funding requirements and a time-phased cost performance baseline.Process Assessment
Developing time phased budgets are one of the most difficult exercises in project management. And if you are not doing earned value management I see little value in developing them. If you have a short duration project, a lump sum budget is usually sufficient. If you have a long term project you might provide initial project cost estimates, followed by annual budget requests. But a detailed, resourced schedule-based time-phased budget is expensive to develop, and expensive to maintain over time as resource and duration requirements change. I try to avoid these.
Figure 17. Determine Budget: Inputs, Tools and Techniques, and Outputs. Reprinted from "A Guide to the Project Management Body of Knowledge (PMBOK Guide), 5th Edition" by Project Management Institute, 2013, p. 208. Copyright 2013 by Project Management Institute, Inc. Reprinted without permission.
- Expert Judgment: This 612 technical proposal project discusses several of the tools and techniques for developing a cost baseline.
- Fence Cost Baseline: Project funding requirements, an output for this process, for a fence installation project.
- SpacePort Project Funding Requirements: This document summarizes both the funding requirements and a time-phased cost performance baseline for a spaceport development project, both outputs of this process.