Join Bob McGannon for an in-depth discussion in this video Collecting resource-usage information, part of Project Management Foundations: Budgets.
So, picture this. You're heading down the highway. There isn't a lot of traffic, and it's a beautiful day. You have the cruise control on in the car, and you aren't exceeding the speed limit. Suddenly, as you come over the crest of a hill, you see a police car parked on the shoulder of the road ahead of you. What do you do? Even though you aren't the least bit guilty, you tap the brakes and slow down. Thus is the power and influence measurements have in our lives.
The same is true with project measurements. Track costly items carefully. And you and your management team will react more proactively to potential cost changes. One of the most substantial costs on most projects is people. As a result, I recommend paying particular attention to the collection of resource usage information. Here are my recommendations for collecting this vital data. First, strive to understand the culture of your organization. How does management want the cost of resources to be allocated? Here are some common approaches.
Some organizations are focused on capturing labor intervals. They might do this in 15 minute increments, by the hour, the day, the week, or the month. Other organizations want you to allocate people's time against particular budget line items. Still others might want you to allocate it as a capital expense or an operational expense. I have discussed capital and operating expenses earlier, so remember, ask your finance group where they want you to categorize each resource type. Find out your organization's labor allocation policy, so you can factor it into your resource tracking.
The second item to evaluate, when collecting resource usage data, is the timely collection and processing of information. The resource usage data needs to come in on a regular basis so that you can complete your reporting on time. Let's say you have to report back to your steering committee by the first of each month. To get an accurate update, you need information on how the resources in your project are being used and at what cost. In this instance, you shouldn't ask you project team to have the resource usage actuals on your desk by the thirtieth of the month.
This won't give you the time to incorporate the data into your reporting and verify its accuracy. Factor the timing of all information collection into your project plan. Third, consider the scheduling of vendor invoice payments. Some vendors won't charge you until the end of the month. Others won't charge you until they've delivered their product or service. And this might go over a number of reporting periods. Knowing how vendors invoice will help you more accurately allocate funds for a particular period. Lastly, don't underestimate the time it'll take to collate the necessary resource usage information.
Nothing is free. So, allocate project administration time to get this job done accurately, which should include coaching your team members, verifying their input until you're confident they have good effort recording habits. The reality is that things can and do change through a project. You want to know if you're train has a wobbly wheel well before it breaks down, let alone goes veering off a cliff. So, collecting resource usage information on a regular basis can help you control your project.
Increases or decreases in resource usage are typically early indicators of a change of status in your project. So, tracking resource usage information will not only help you maintain a sound budget position, but it could help you proactively address project issues as well.
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- Discovering costing standards
- Examining capital and operating costs
- Assigning costs to resources
- Communicating your budget
- Recovering a bloated budget
- Addressing budgeting issues<br><br>
- The PMI Registered Education Provider logo is a registered mark of the Project Management Institute, Inc.