uthor(s): Elizabeth Harrin

📇 BCS, Year: 2013

More than one-third of projects have a budget of over £1 million so knowing how to handle the finances is an essential part of a project manager’s repertoire. The initial budget is often just a starting point. An incredible 56 per cent of projects are affected by budget changes and that’s not just a one-off financial revision. The average project, if there is such a thing, has its budget revised 3.4 times.

Keeping on top of all this is not always easy, and it is made harder by the fact that project managers themselves don’t always get control over the money. If that’s the case, why should you care about the numbers? The answer depends on where you think a project manager’s role ends. If you believe that your job is to deliver the project according to the scope and quality criteria set out by the sponsor, then it doesn’t matter about tracking hours of effort or money spent. However, the project manager’s role should cover far more than that. Your role is to deliver a project that is fit for purpose and adds some value to the organisation. Whatever you are working on should have a benefit, even if they are not financial benefits. There should be a purpose to what you are doing – someone who cares about the outcome enough to sponsor the project, and a business case that justifies why you and your organisation are bothering to work on this project at all. And that requires you to know a little about the finances of the project.

This section covers how to manage project variables over which you do not necessarily have authority, how to find out who has that authority, and how to manage the relationship with the budget holder. Many projects do not appear to have budgets at all and Chapter 9 looks at working effectively in that environment. This section also looks at reporting, tolerances and contingency.

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