How to set a project budget?

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. 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. 2.Add workshops and administration

   Add 30% of the consulting hours for workshops and administration.

3. 3.Add testing

   Add 20% of the consulting hours for testing.

4. 4.Add documentation

   Add 5% of the consulting hours for documentation.

5. 5.Add assistance UAT

   Add 5% of the consulting hours for assistance with the customer's acceptance testing.

6. 6.Add deployment

   Add 3% of the consulting hours for deployment.

7. 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

1. 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.

2. 9.Set the total budget

   Combine the WBS, standard rates, and risk to create the final delivery budget.

3. 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.