Keeping Track of Project Plans, Budgets, and Schedules
Estimating—as it relates to plans, budgets, and schedules—is probably the most difficult aspect of project management. This is because of the many unknowns: details that might change, problems that might come up, or events that might occur unexpectedly. However, a project manager's ability to estimate is among his or her most important skills and plays a key role in any project's success.
There are many tools and techniques you can use to overcome the uncertainties. Here we look at the main ones.
You can never really over-plan a project. Taking sufficient time during the early stages of a project to be sure you know what you are doing, why you are doing it, and when you need to complete it is really important. Detailed planning will help you save time and money, and when you involve all your team members in the process, you will benefit greatly from their experience.
Be wary, however, of making things more complicated than they need be: use simple planning tools for a simple project.
A detailed project plan is the essential ingredient in a successful, pain-free project. The size of your project, its complexity, and deadline, for example, will determine which tools you use to draw up your plan, but here are some of the most useful ones:
This is a useful tool for defining the individual tasks in your project.
- Bring the team together and brainstorm all the tasks that need doing, in no particular order.
- Write them down on sticky notes and put them up on a board or wall.
- Once the team members have come up with all the tasks they can think of, arrange the sticky notes into groups under the major areas of activity.
Next put notes labeled "start" and "end" at opposite ends of the board or wall.
- From left to right between them, arrange the sticky notes in the logical sequence of activities.
- Join the notes with arrows in and out, depending on whether tasks must be done one after another or can be done at the same time (some tasks may have more than one arrow).
- Under each task, write an estimate of how much time it will take.
You have now created a project logic diagram, which should help you identify which tasks are dependent, and which are parallel:
- Some activities are dependent; they depend on others being completed first. For example, you would not start building a bridge before you have designed it! Dependent activities need to be completed sequentially, with each stage being more or less done before the next can begin.
- Parallel tasks do not depend on the completion of anything else, and may be done at any time before or after a particular stage is reached.
Now you can put the tasks into either a simple timetable or action plan, or use one of the next two planning tools to create a more formal structure for how the work should proceed.
Gantt charts are a very popular and useful tool for analyzing and planning small or medium sized projects. They:
- help in planning the tasks involved;
- give a basis for scheduling the tasks;
- allow you to allocate the necessary resources;
- help in plotting the critical path for a project that has a definite completion date.
To produce your Gantt chart, take each of the activities you listed in your project logic diagram and show its earliest start date, estimated completion time, whether it is parallel or dependent, and if it is dependent, the tasks it depends on.
Say, for example, your project is to manage an office move. Your task list might look like this:
| Task | Earliest start day | Length (days) | Dependents |
| 1. Produce new floor plan | 1 | 2 | |
| 2. Pack up current office | 3 | 1 | Dependent on 1 |
| 3. Organize facilities | 3 | 1 | Parallel |
| 4. Move furniture | 4 | 2 | Dependent on 2 |
| 5. Move equipment | 5 | 2 | Parallel, dependent on 4. Any time after |
| 6. Unpack in new office | 6 | 3 | Parallel, dependent on 4. Any time after |
| 7. Set up IT systems | 7 | 4 | Parallel, dependent on 5. Any time after |
| 8. Staff move in | 10 | 2 | Parallel, dependent on 7. Any time after |
You can plot your task list into a chart, like the one below:
| Task | Day 1 | Day 2 | Day 3 | Day 4 | Day 5 | Day 6 | Day 7 | Day 8 | Day 9 | Day 10 | Day 11 |
| 1. Produce new floor plan | x | x | |||||||||
| 2. Pack up current office | x | ||||||||||
| 3. Organize facilities (light, phone etc) | x | ||||||||||
| 4. Move furniture | x | x | |||||||||
| 5. Move equipment | x | x | |||||||||
| 6. Unpack in new office | x | x | x | ||||||||
| 7. Set up IT systems | x | x | x | x | x | ||||||
| 8. Staff move in | x | x |
Once you have plotted your chart, you can see if you need to make any adjustments.
When the project is under way, your chart will be very useful for monitoring progress, as you will be able to see immediately if the project is falling behind schedule and remedial action is necessary to get it back on track.
Critical path analysis (CPA) is a powerful tool for scheduling and managing complex projects. Its main benefit is that it allows you to identify the tasks that must be done on time and in sequence in order for the whole project to be completed (the critical path itself). Then you can fit the other non-dependent tasks around them.
Say your project is to launch a new product, and your task list is as follows:
| Task | Dependents |
| A. Prepare initial designs | |
| B. Make prototypes | Dependent on A |
| C. Test prototypes | Dependent on B |
| D. Finalize design | Dependent on C |
| E. Set up production line | Parallel, dependent on A. Any time after |
| F. Train operators | Parallel, dependent on E. Any time after |
| G. Produce first batch | Dependent on D and F |
In order to work out the critical path, you need to identify the critical tasks.
A task is said to be critical if its duration cannot be extended without delaying the completion of the project.
As a rule, people vastly underestimate the time required to take a project to completion, particularly if they are unfamiliar with the individual tasks to be performed. They forget to allow extra time for unexpected events or delays that are out of their control, and also often simply fail to realize the full complexity of the job. Many people are naturally over-optimistic, so it is all too easy to fall into this trap.
However, it is important to get time estimates as accurate as possible for two main reasons:
- You will save yourself and your team a huge amount of stress.
- You could save yourself or your company a lot of money; if your time estimates are off and you need to have work done at very short notice, you will probably have to pay a lot more for it.
The successful on-time delivery of your project will enhance your reputation as a project manager and can really help your career and your standing if you work in a competitive environment..
Earlier in this checklist, we discussed relying on your team members' expertise and experience to assign lengths of time to individual tasks. But there are additional factors you need to account for when estimating the overall time for the project. Again, these will vary, depending on the type of project you are working on, but they could include some or all of the following:
- detailed project planning
- liaison with other parties
- meetings, both internal and external
- quality assurance and its documentation
- accidents and emergencies
- vacations and sickness among essential staff
- contact with customers
- breakdowns in equipment
- missed deliveries by suppliers
- interruptions
- quality-control rejections
Any combination of these factors may double (or more than double) the length of time needed to complete a project.
Costs, like time, are often underestimated. But if you estimate your time accurately, you will find it easier to be accurate with your costs.
The types of costs you should include in your estimates and in your project plan are outlined below:
| One-time development costs | Ongoing operating costs |
| staff costs (usually the biggest expense); research costs; systems development costs (including software/hardware purchases or licenses); office re-fitting/re-wiring; pilot costs (staff and materials); implementation costs (training, recruitment, communication, etc); third party expertise (e.g. software consultants, marketing agency); state and local taxes on third party services | Direct costs: overhead (the general operating costs associated directly with the project); new supplies or materials resulting from the project; new administration (purchasing, accounting, record-keeping, etc.); costs incurred before the benefits of the project can be realized. Indirect costs: A proportion of the costs of running your business day to day (for example, office rental, vehicles and expenses, existing staff additional duties) |
Critical success factors define how the achievement of project goals will be judged. They must be measurable and unambiguous in order to prevent arguments over their meaning.
For example:
"Relocation of offices must be completed by October 15, 2008"is a good critical success factor; its meaning is clear.
"Work must be completed to a high standard of quality,"on the other hand, is not; it is not clear what"high quality"means and different people could interpret it differently.
Wherever possible, identify the benefits of your project in financial terms so they can be weighed against the costs.
For example, assume your project is to develop a new product or service for your clients. You might estimate that it will bring in an extra X thousand dollars per annum for your organization. Or if the project is to relocate the offices, you might calculate that the new premises will save the company money in terms of rent and utilities.
However, not all benefits can be measured financially, so you may need to find other ways of quantifying them in tangible, measurable terms in order for the success of the project to be assessed. Any benefits that form critical success factors (see below) should be highlighted. These may be equally as influential in getting decision-makers to approve the project as the purely financial benefits.
Regardless of how often you emphasize that estimates of time and costs are just that—estimates—there is the ongoing danger that the word"estimate"gets forgotten as the figures get communicated through the business Everyone thinks you have given them the final"completion date"and"total cost!"
Avoid this particular headache by refining your costs and timescales at various stages of the project—for example, initial ballpark figure, design stage, implementation stage, and launch. Then make sure you keep the people involved—your team, customers, or stakeholders, for example—up to date.
You will likely find that you can improve the accuracy of your figures as the project progresses. For example, your final time and cost estimates could end up being as much as 50% higher or 30% lower than you quoted as your initial ballpark figure.
Complex planning tools are not always appropriate. If your project is relatively simple, a straightforward timetable or action plan is probably sufficient. Over-complicated planning can confuse people and lead to poor communication and muddled projects.
The earlier you do the cost estimates for your project, the more likely it is that they will only be best guesses. For this reason, it is essential that you allow for a significant contingency; as an absolute minimum, add an additional 20% on top of what you think the costs will be. Unfortunately, in most cases actual costs tend to be higher than estimated!
Allowing your estimates to be challenged unnecessarily by external people or circumstances will not make them more accurate and may, therefore, result in damaging your reputation for reliability. Once you have arrived at what you consider to be a realistic schedule or budget, fight for it. Never let the outside world deflect you from what you know to be practical. If someone tries to impose a deadline on you which is impossible, clearly say so and give your reasons.
However, you may need to compromise, since a flat"no"will be seen as obstructive. Look for possible alternatives. For example:
- offer a prototype product or service at an earlier date, with the understanding that you will replace the prototype with the finished product or service at a later date;
- reduce the complexity of the product or the total number of units; future enhancements or more units would then be the subject of a subsequent negotiation;
- demonstrate what other (specified) resources would be required if it is vital that the project deadline be moved up.
4pm: www.4pm.com/articles
Mind Tools: www.mindtools.com
Tools and Examples for Planning a Project: www.washington.edu/computing/pm/tools