managing-budgets

You will have budget constraints in one or more of

Info iconThis preview shows page 1. Sign up to view the full content.

View Full Document Right Arrow Icon
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: what these constraints on our resources are because they impact the amount of work that we are able to do, the amount of time we have available, and the cost of completing the project. Knowing what resource restraints you have is important when you are planning a budget so that you make a realistic plan. For many of us, estimating and understanding the use of external resources (contractors, suppliers, government officials, etc.), is easier than estimating and understanding the requirements and cost of using our own internal people or resources for a project. To demonstrate this, let’s look at the costs involved with the use of people as a resource. Time is money since everyone is probably paid for what they are doing at your organization. You also may not have the needed expertise inside your organization to successfully complete a highly technical or specialized project. So your costs for people could include: The cost of a ‘fill-in’ employee for each person while they work on the project The cost of lost productivity on other projects for each person working on your project The cost of training involved for them to be able to work on the project The cost of hiring a technical expert or support staff There are also a finite number of hours in the day and a limit to the amount of work that you can accomplish in that time. The amount of work that you can achieve is dependent on the number and complexity of the project’s objectives as well as its performance criteria. For example, if you have one objective and you’ve been approved to just get it done to a minimum satisfactory level, chances are that will be a lot less work than if you were told the objective must be completed to a superior level of quality or if you have multiple objectives that need to be completed. There is usually going to be a tradeoff between your resources, the time you have to use them, and the work output that you can produce. You could also say that the amount of work that is required is dependent on the number of resources that are needed and the time that is needed to complete the objectives. This could be a literal calculation, such as: Number of resources x Time worked = W...
View Full Document

This note was uploaded on 06/07/2013 for the course BA 201 taught by Professor Cuongvu during the Fall '13 term at RMIT Vietnam.

Ask a homework question - tutors are online