Managing project budgets
Featured in the The Project Management Activity Pack training manual
By Eddie Davies
Category: Management
Credit price: 4 download credits (Single user)
Identified among the symptoms of poorly managed projects are: cash flow difficulties as the project progresses; and the overall cost being well over the estimated budget. Project management has frequently been compared to a juggling act in which managers must keep their eyes on several balls which are in the air at the same time. In reality, it is even more complex as the ‘balls’ are often competing against each other. Decisions made concerning one area will have an impact on the others and nowhere is this more noticeable than in the area of money.
You begin the training activity with a discussion focusing attention on the symptoms of a poorly managed project. The integral part that good money management plays to effective project management is identified, and the overall importance of project and cash flow timing is stressed. The participants then take part in a group exercise which encourages them to identify the benefits to the project manager of developing budgets. You introduce them to the techniques of drawing up a cost matrix. The challenge of identifying all the elements of a project that attract costs are explored in a group exercise. You then demonstrate a step-by-step approach to drawing up a cost matrix. The participants are given the opportunity to practise and develop this skill by working in groups of three to produce a budget for one of their own projects. The work from the exercise is reviewed and constructive feedback given. You then introduce then to the technique of cash flow profiling leading to the production of a cash flow curve (alternatively called an ‘S’ curve on account of its shape). This is discussed with examples and the participants are then given the opportunity to extend their analysis from the previous activity by developing a curve for their own project. You draw the training activity to a close by having them identify the steps a project manager can take when they find there is a difference between their predicted and actual curves. You end the training activity by inviting participants to consider how they might apply their learning to their work. They fill in the learning review diary (where appropriate).
Who is it for: This training resource is intended for use by trainers to introduce participants to some of the key concepts and techniques needed to successfully manage a project budget.
| Resource Type: | Activity |
| Min Group Size: | 4 |
| Max Group Size: | 20 |
| Typical Duration: | 03:00:00 |
| No of Pages: | 23 |
Resources: View standard resources for Fenman training activities
Additional resources: Graph paper, Pencils and erasers, Pocket calculators, Photocopying facilities (capable of copying paper onto acetate would be useful), Two £10 notes.
Purpose: This training resource is intended for use by trainers as an essential ingredient for all training events that are designed to increase participants’ skills in project management. It could also be used on more general management training in sessions that are aimed at introducing line managers to accounting and finance. The training activity assumes some previous knowledge and experience of drawing up a ‘Work Breakdown Structure’ and is designed to follow on from ‘The power of planning – part one’, which develops participants’ skills in this key area.
Download the training activity, Managing project budgets as featured in the Fenman training manual; The Project Management Activity Pack