3-Steps to Analyze Your Next Project’s Budget

How can you tell when something is going to be a good fit? Comparing needs and capabilities can be tough. Thankfully, there’s an easy way to analyze project requirements. This guide helps align expectations with potential-project constraints.

Forecasting how long resources will last is a difficult task for managers because establishing the long-term usage rate proves challenging when the short-term usage is continually changing.

Similarly, it is often a challenge to understand what the budget for an upcoming project might look like because forecasting which areas are most time-consuming and expensive can be ambiguous.  

Fortunately…

This guide helps IT professionals that want to improve analysis of potential projects and decrease project-budget blurriness, unlike relying solely on vendors to predict costs.

Let’s say you want to consider the budget of building a custom application.

For this exercise, we want to find a way to translate your project expectations into project requirements which will better guide budget analysis.

I’ve created a table of project requirements for our practice example.

Step 1: Click here to download your template.

Step 2: In this activity you will start with 18 points.

Step 3: Rate each requirement on level of importance to your firm, but you may only use up to 18 points.

  • The more important a requirement is to your business, the higher the score.
  • 0 indicates zero alignment with business objectives.
  • 7 indicates 100% alignment with business objectives.
  • Try to pick a variety of different ratings, e.g., not all 3’s.

Want to see how I rated my requirements?

Well, since I had 18 points of budget, I could distribute those points to each of the 5 traits until all are exhausted.

Factors of a Successful Project: highlight your choice.

System is Easy to Admin

0              1              2                3                4              5                6                  7

Project is Affordable

0              1              2                3                4              5                6                  7

Users Transition Quickly

0              1              2                3                4              5                6                  7

System Security

0              1              2                               4              5                6                  7

Project is Easy to Manage

0              1              2                3                4              5                6                  7

So as you can see those 18 points that represent project budget were used up quickly. This exercise highlights that we can’t have everything all at once. For my example, the priority is affordability. Now, this information can be used to craft a project that puts budget over scope and time on the triple constraint triangle. The trade off of price priority results in a project that, in order to maintain quality, must have a narrower or shallower scope. As well, the schedule intensity should be expected to be moderate.

 

 

 

This figure represents a project with major focus on budget. With this knowledge, the price range that a vendor provides is more meaningful because you will understand where you fit in their spectrum.

Our R&D Team helps stakeholders who want to analyze project benefits by improving understanding of project-budget expectations and decreasing confusion about project-cost factors unlike navigating free resources online. It’s simple to start, call now (800) 375–3361 x4.