The Europeans discovered America by accident. When they sailed over the ocean, they sudden stumbled upon some land. The first times they encountered the native inhabitants they used rum to keep from being scalped. On their next journey they came prepared; they brought beans and mirrors to trade with the Indians.

So, the Europeans gave generously the mirrors and other colorful shiny stuff in exchange for the land. However, there was so much land and so much tribes to encounter, they had no idea how much to take with them. After some experience, the Spanish, Portuguese and the Dutch could give a good estimate how much to bring with them to take all the land. They evolved even some kind of metric: five beans for 5 square miles of land. The confiscation of land took a pace never seen before. Later on, they discovered that they could not take all the beans and mirrors they needed, so they took guns instead.

The less important lesson history is trying to teach us here, is that if you come prepared you are more efficient.

Show me the money… the project budget

To be able to give some statement on the financial state of a project, you first have to got a clue about the expected total amount you will spend, and to know where your costs are: which parts of your project require money?

To create such an overview, or to check an already existing project budget, you should take the WBS you constructed for the project. For every task (or group of tasks) you determine who will do it, and what is needed (in material) to do the job. E.g. "Programming the interface" will be done by Dick and he will need a PC, programming environment and a room to work in. For each person and material you need the units (man day, square feet, etc.) and the cost per unit. For the previous example you can get the following table:

For your project budget you have to cluster the costs that are similar in type. So hardware, software, infrastructure, personnel project costs (you know, the cost of Dick and the like) and training for example. This is to avoid having 20 pages of costs to get an overview of the budget, it's a kind of summary.

For more issues related to a software project budget, please read my total cost of ownership guide.

This entry was posted on Saturday, August 4th, 2007 at 12:23 pm and is filed under Progress.