I got directed here as part of your IT Project Managers Course. If anyone is thinking about doing the course I can highly recommend it. The lessons are clear and easy to understand. Then there is usually more links in each lesson to do a deep dive. So much extra material and resources, templates etc. I would love to have seen Dmytro's Project Plan for building the course. Must have been huge! (I am not being paid to promote this, just trying to help anyone else who was in the same situation in trying to decide on doing the course or not.)
Thank you for sharing this information. i learn so many thing from this video as i am studying project management now so this information will help me to how to calculate budget for any project i know that is not accurate but as i got an idea what things i need to keep in mind so thank you.
As a residential GC, I always use the same crew. I am able to pin point when my men will show up and take care of the day/weeks tasks in order to keep a proper flow of the job. When doing bigger jobs that require different subs, how do I budget for subs that are typical? Subs that just don’t show up and don’t call in. Thank you,
Hi Jason, Not sure I got the question. However, the idea is always to compare planned values versus actual ones. So, any work will have a planned duration, required materials, and additional expenses. However, you may have different price tags based on what vendor does this job. I think it should be easy to implement in an excel spreadsheet. And if someone doesn't show up, the normal costs don't accrue. So, I would handle it as an outstanding situation and have different substitutions that I can plug in. So, I think in your case, it might be beneficial to create several templates per typical job. You can use them with minor updates. Let me know if it makes sense.
Great advice but how about never even visiting the property in the first place? Get the client to send in a video of the area by Whatsapp and then using this terrific formula to build the estimate - and make it into a template so you don't have to do it again. It gets rid of a lot of tyre kickers and sets expectations for when you do go to seal the deal - and it saves an awful lot of time and money. Its super simple to use and it's free. You will find it if you are interested enough so I won't leave a link.
If you use an internal team for an internal project you don’t usually create a budget like that. You know the exact people or at least the rates inside the company. So, you focus more on estimating the efforts and time they will need to spend on your project. They get paid on monthly basis in any case. If you need to make a certain department to pay for the project from their budget you need to negotiate a small commitment for experienced SME who will do the estimates for the project. Or you just get the needed people on the team and then you estimate the project. You need to negotiate the Scope of the project to fit into the constraints of the available budget. And, yes, if you have access to the internal SME who can help you for free - use them. Let me know if it answers your question.
Ideally, your client should have access to all project information ;). It’s a matter of how an organization makes profit from doing projects. If it’s a fixed priced contract - you don’t show the project budget at all. The company gets a fixed sum. If you can save some money for the project - it’s a better margin for the company. If it’s times and materials - then, it’s better to be honest with your estimates. As long as clients stay happy - they will pay for your services. Profit for the company is in the rates of people and resources. Anticipating your next question. Yes, you need to include risk reserves or "buffers" in project budget. Realistic reserves are easy to explain.
@@calebabraham4755, it depends on the project and the processes inside the company you work in. Generally, I recommend doing as little as possible to get the project to success. And there's no such thing as a Project Management approach that will work well for each case even if you fill it up with all best practices.
You can use risk reserves only for specific risk you assigned this reserve for. If you don’t use that reserve, you need to release it. You want to do it this way, to control how accurate your risk management efforts are. On the other hand, you can use management reserves for the risk that you didn’t identify during planning. If something unexpected happens you can use the management reserves rather than changing the whole project plan. Just keep in mind that, it’s theory, and it doesn’t work like that for all industries.
In general the approach is the same as i described in the video. In most cases, to calculate project budget you need to identify project scope as accurately as possible.
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@Sergey Perun My challenge as well. Especially in the software development industry.
Identifying the scope
Identifying accurate rates and prices, of course!
@@olenafedosieieva6191 Thanks for the feedback!
@@user-kd9bf1qd8h, thanks for the feedback.
I got directed here as part of your IT Project Managers Course. If anyone is thinking about doing the course I can highly recommend it. The lessons are clear and easy to understand. Then there is usually more links in each lesson to do a deep dive. So much extra material and resources, templates etc. I would love to have seen Dmytro's Project Plan for building the course. Must have been huge! (I am not being paid to promote this, just trying to help anyone else who was in the same situation in trying to decide on doing the course or not.)
Thanks for your feedback! I'm really glad you find the course valuable.
Thank you for sharing this information. i learn so many thing from this video as i am studying project management now so this information will help me to how to calculate budget for any project i know that is not accurate but as i got an idea what things i need to keep in mind so thank you.
Glad it was helpful! For sure, you can increase the accuracy with more detailed break down of deliverables and work packages.
Great content! Can I ask what is the software you are using at @3:44? Thanks!
Thanks! It's Merlin Project. www.projectwizards.net/en
As a residential GC, I always use the same crew. I am able to pin point when my men will show up and take care of the day/weeks tasks in order to keep a proper flow of the job. When doing bigger jobs that require different subs, how do I budget for subs that are typical? Subs that just don’t show up and don’t call in.
Thank you,
Hi Jason,
Not sure I got the question. However, the idea is always to compare planned values versus actual ones. So, any work will have a planned duration, required materials, and additional expenses. However, you may have different price tags based on what vendor does this job. I think it should be easy to implement in an excel spreadsheet.
And if someone doesn't show up, the normal costs don't accrue. So, I would handle it as an outstanding situation and have different substitutions that I can plug in.
So, I think in your case, it might be beneficial to create several templates per typical job. You can use them with minor updates.
Let me know if it makes sense.
Really explained well, keep uploading more videos
Thank you, I will. Tomorrow there’ll be a new video.
Nice work and presentation, Dmitry
Glad you enjoyed it, Roopesh! Thanks for your feedback.
Great advice but how about never even visiting the property in the first place? Get the client to send in a video of the area by Whatsapp and then using this terrific formula to build the estimate - and make it into a template so you don't have to do it again. It gets rid of a lot of tyre kickers and sets expectations for when you do go to seal the deal - and it saves an awful lot of time and money. Its super simple to use and it's free. You will find it if you are interested enough so I won't leave a link.
Thanks for not making it a spam comment.
This is incredible. Thank you
Glad you like it!
Great, practical advice that easy to digest. Thanks!
Glad it was helpful, Rayn!
you are one of the smartest ! Please do more.
Thanks, Tagel. New video comes out this week
thank you!! it helps me a lot
You're welcome! Glad you liked it.
Project scope is a bigger challenge for me
I have several videos on scope management. Have you seen this one already?
ua-cam.com/video/NvGVy2IIgvs/v-deo.html
@@ITProjectManagers Not yet, the one directly linked was useful, but I'll definitely check it out. Thank you so much 🙏.
yes
Thank you for your feedback, Ammar.
Yes
Great! Thanks for you feedback.
How can we budget the internal team? If all my activities are worked on by internal software team are you saying check with the SME for an estimate ?
If you use an internal team for an internal project you don’t usually create a budget like that. You know the exact people or at least the rates inside the company. So, you focus more on estimating the efforts and time they will need to spend on your project. They get paid on monthly basis in any case.
If you need to make a certain department to pay for the project from their budget you need to negotiate a small commitment for experienced SME who will do the estimates for the project. Or you just get the needed people on the team and then you estimate the project. You need to negotiate the Scope of the project to fit into the constraints of the available budget.
And, yes, if you have access to the internal SME who can help you for free - use them.
Let me know if it answers your question.
Thank you
Hi. Could you please explain how to manage budget in scrum sprints project?
Sorry, I missed your comment. If it's still actual, please write a new one.
Note: leaving this comment to keep track of open questions.
@@ITProjectManagers I am interested in your answer if you had the time ;)
Great video. Your sleeves are too long bro, get your suit taken up by a tailor
Thanks! Yeah, non-standard size. ;(
What kind of budget should we show to the client? Can we show WBS to the client?
Ideally, your client should have access to all project information ;). It’s a matter of how an organization makes profit from doing projects. If it’s a fixed priced contract - you don’t show the project budget at all. The company gets a fixed sum. If you can save some money for the project - it’s a better margin for the company.
If it’s times and materials - then, it’s better to be honest with your estimates. As long as clients stay happy - they will pay for your services. Profit for the company is in the rates of people and resources.
Anticipating your next question. Yes, you need to include risk reserves or "buffers" in project budget. Realistic reserves are easy to explain.
Thank you so much for the reply! Do you recommend doing PERT analysis for Project estimate at start of the project?
@@calebabraham4755, it depends on the project and the processes inside the company you work in. Generally, I recommend doing as little as possible to get the project to success. And there's no such thing as a Project Management approach that will work well for each case even if you fill it up with all best practices.
Thanks
You are welcome, Chetana!
Yes.
Good guess!
7:35 Why do you need management reserves for risk when you already have risk reserves?
You can use risk reserves only for specific risk you assigned this reserve for. If you don’t use that reserve, you need to release it. You want to do it this way, to control how accurate your risk management efforts are.
On the other hand, you can use management reserves for the risk that you didn’t identify during planning. If something unexpected happens you can use the management reserves rather than changing the whole project plan.
Just keep in mind that, it’s theory, and it doesn’t work like that for all industries.
@@ITProjectManagers Thank you Dmitriy!
Nice
Glad you find it useful!
How much % contingency or risk coverage to be kept in Budgeting
Sorry, somehow I missed this comment.
Usually, it’s up to your leadership to decide. In most cases it’s about 5-15% on the budget.
Finding accurate scope may be a challenge
Yes, it’s true. That’s why I created a whole list of video here on Scope Management: ua-cam.com/play/PLjbXjDdSp7vc8EINwG9DQ8pjbu3uJQgsk.html
How do you calculate budget
In general the approach is the same as i described in the video. In most cases, to calculate project budget you need to identify project scope as accurately as possible.
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Thanks:)
yes
Thanks for your feedback, Shagufta.
Yes
Thanks for your feedback!
Yes
Nice catch!