How to set a project budget?
ProsessPilotene's budgeting method builds a complete time budget from pure consulting time by adding standard rates and a risk premium. Use this approach in sales and project planning once the deliverable's WBS is ready.
- 10 steps
- Total time: 1 h
- Preparation: 30 min
- Result: A complete time budget for the deliverable, ready to be included in the work package.
Required tools
- Azure DevOps — A WBS with Epics, Features, user stories, and tasks provides the basis for the consulting hours.
- Xledger — Records the finalized budget for tracking hours and forecasting.
Calculate consulting hours and apply standard rates
1.Create a WBS for the deliverable
Break down the delivery into a Work Breakdown Structure and total the net consulting time for development and functional work.
2.Add workshops and administration
Add 30% of the consulting hours for workshops and administration.
3.Add testing
Add 20% of the consulting hours for testing.
4.Add documentation
Add 5% of the consulting hours for documentation.
5.Add assistance UAT
Add 5% of the consulting hours for assistance with the customer's acceptance testing.
6.Add deployment
Add 3% of the consulting hours for deployment.
7.Add up the WBS and standard rates
Combine the consulting hours and all standard rates into a single total hour.
Add risks and set the budget
8.Calculate the risk premium
Add 10% risk, calculated from the total after the standard rates have been added—not from the original WBS total.
9.Set the total budget
Combine the WBS, standard rates, and risk to create the final delivery budget.
10.Invite the customer to discuss the key figures
Share the rates and assumptions with the customer, as these elements drive the price of the delivery.
Discussion
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