Re: Is Budget Cost useful?

I think MS's assumption is that the planning workflow will be such that the PM first calculates a bottom-up cost estimate, then presents it to senior management in order to secure the funds required for the project. The Project Manager is an active participant in the basic decision regarding whether or not there ultimately even will BE a project. That bottom-up estimate is used by Senior Management to compute such things as ROI in order to make a go/no-go decision on whether or not to allocate funds and procede with the project. Management, using projected cost input provided by the PM, determines the resources they are willing to invest and if it's a worthwhile endeavor for the firm to act upon. Once management approves the estimate and allocates the funds, the Baseline becomes the Budget. Management doesn't go to the PM and say "Here's XXX dollars; go and create such and such." Instead they go to the PM and ask "We're thinking about doing such-and-such - if we decide to do it, how much money should we be willing to spend?" The PM deals directly with the Project Sponsor and the other members of senior management, getting involved at the stage when the project is just an idea someone has had as a possible direction the firm ought to take. I think the assumption is the PM is higher in the food chain than many might actually be, positioned one notch down from Senior Management, and has as part of their responsibilities contributing data that is then used at the department head and board of directors level as part of their strategic decision-making process. The "budget" is prepared as part of the decision whether or not the project should proceed, not after the fact when the decision has been made and funds already allocated by some seat of the pants process.

This is not so radical, by the way. I have read several sources that say a top-down budget is not a budget at all - it is instead an allocation of an estimated projected revenue stream. They suggest that the term "budget" should be limited to bottom-up cost projections once the decision has been made to commit those required resources.
--
Steve House
MS Project Trainer & Consultant



"Jan De Messemaeker" <janremovethis@xxxxxxxxxxx> wrote in message news:uNW6neKsJHA.4564@xxxxxxxxxxxxxxxxxxxxxxx
Hi,

To me, and to most customers I work for, a budget is not the baseline.
Baseline is your bottom-up estimation of costs.
Budget is what management is willing to invest in your project.
Only in Utopia are these identical.

So abudget on top of a baseline is definitely useful
But indeed, it took me blood sweat and tears to understand how it works :-))

Greetings,
--
Jan De Messemaeker
Microsoft Project Most Valuable Professional
+32 495 300 620
For availability check:
http://users.online.be/prom-ade/Calendar.pdf
"andrewandrew" <andrewandrew@xxxxxxxxxxxxxxxxxxxxxxxxx> wrote in message news:C2702132-1FBC-4664-AB36-498CE7773E83@xxxxxxxxxxxxxxxx
Try as I might I can't figure out how the Budget Cost feature does anything
useful--the Microsoft documentation says that it's used to set a baseline
that I can track my actuals against. Isn't that what the real baseline is
for? And it's quite a hack to get it to work too--I need to show the PJ
Summary Task, create a custom field to group by, and edit it in the Usage
View. I know most users of MSP don't know how to do any one of these things,
let alone all three.

So I ask--what's the value of this new, convoluted feature?

If I wanted to group resources under a certain budget heading, roll-up their
baseline costs and compare them with their scheduled or actual costs,
couldn't I do just that?

And if it was too much for me to breakdown the budget into a single baseline
cost for each resource, is it really so hard to just make a dummy resource to
hold the budget cost for that category, WITHOUT having to monkey around with
the PJ Summary and the Usage Views?

Someone please illuminate me, I want to love this feature!



.

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