Estimating Costs and Allocating Resources

Instructional design project managers may sometimes feel like they are performing a juggling act balancing all key elements of a project at the same time. 

Resources:  Workers, software tools and learning materials.
Time:  Task durations and dependencies and critical paths.
Money:  Budget costs, training budgets and profits.
Scope:  Size of Project, learning goals and requirements.

”It is absolutely imperative that project managers understand any changes to the project will have a dynamic effect on budgets, either time or resources” (Reh, 2011). While there is no magic formula for managing a budget, the 80/20 rule can help ID project managers become more effective. “Project managers know that 20% of the projects work (first 10% and the last 10%) will consume 80% of your time and resources” (Reh, 2011).

Actually, this 80/20 rule can be applied to almost anything you deal with in life. This rule helps to remind us about focusing on 20% of what matters throughout our daily tasks as project managers.  Instead of wasting time on 80% of your time and energy on things that do not matter, concentrate on the 20% that is really important on the project.

Remember, if your project runs off track and over-budget the project will not be considered successful even if it meets the needs of end users.  This is why project managers need to carefully manage and control their budgets. There are four strategies that will help project manager maintain control of your project’s budget to prevent massive cost overruns (Westland, 2011). Most important, project managers need to put aside 20% of the project’s budget aside into a reserve back-up fund in case of unexpected circumstances because they’re a lot of unknown factors that can create variances and control changes within a project’s budget.

1. Monitor your budget- A project can start heading out of control quickly without frequent oversight you would not be able to see if the budget is starting to head in the wrong direction.  It is easier to manage a project that is going 10% over budget then letting it get out of hand trying to correct it later in the project phases with a 50% overrun.

2. Watch your resource usage- The work staff can contribute to much of your project’s budget so it is important to keep track of the number of people currently working on a project, as the project moves though phases less or more people will be needed to complete project tasks. Project managers should review the number of people currently working on a project and the project's future resource needs regularly to help keep your project budget on track.

3. Keep team members informed- By informing the team is to empower your team to become more involved and take ownership as part of the project. Keeping the team informed about the budget status, will help them watch their project charges and they will be less likely to waste unnecessary extra time and man hours.

4. Keep an eye out for scope creep- This is a leading cause of project budget overruns. “As unplanned work finds its way into your project, billable hours mount and the project budget can get out of control” (Westland, 2011). Project managers must carefully manage changes that were not part of the project’s initial budgeting requirements. Project change control will need further authorization for additional project funding to cover the cost of extra time and work.

A projects budget is a living piece of a project, something instructional design project managers must review with their teams and their stakeholders on a regular basis. By keeping a watchful eye on the project budget will keep both stakeholders and management happier because it is critical to building a strong foundation for the project.

-Mary Layne

Resource

Reh, J. (2011). Project Management 101  Part 1: Basic Project Mnagement Outline. Retrieved December 1, 2011 from http://management.about.com/cs/projectmanagement/a/PM101.htm

Westland, J. (2011). Project Management: Four Ways to Manage Your Budget. Retrieved December 1, 2011 from http://www.cio.com/article/684978/Project_Management_4_Ways_to_Manage_Your_Budget