if you find during the mid of your project that you have budgeted way more than needed... you can change your Estimate to Complete and get it rebaseline... this is what should be done for under and over budget cases.... rest follow transperancy.... :-)
thanks for you usual helpful response. how about if we find the variance (excess budget) during the later stage of the project, would it still make sense to re-baseline the cost estimates?
We expect PM to be transperant with new learning,,, and if you see that the reserve you kept for risks are not utilized and risks are already avoided... you should release the contingency reserve. The same goes in reverse... like if you need more that also you need to tell. so we need to calculate the Expected Cost at Completion on some milestones... and based on this we should request for rebaseline... now this cost could be more or less than the previous budget... the process remains the same.
But in practice... PMs never report extra budget... they only report when they need more :-) ....
Lorenz,
PMI isn't prescriptive about what to do with unused budget. Best practice is to closely monitor and adjust the budget throughout but if you are fortunate enough to find remaining funds at the end of the project - regular or contingency - they would be returned.
saketbansal
Wed, 10/16/2013 - 08:31
Permalink
if you find during the mid
if you find during the mid of your project that you have budgeted way more than needed... you can change your Estimate to Complete and get it rebaseline... this is what should be done for under and over budget cases.... rest follow transperancy.... :-)
Lorenz
Wed, 10/16/2013 - 10:17
Permalink
thanks for you usual helpful
thanks for you usual helpful response. how about if we find the variance (excess budget) during the later stage of the project, would it still make sense to re-baseline the cost estimates?
how about unused contingency reserves? thanks.
saketbansal
Fri, 10/18/2013 - 02:31
Permalink
We expect PM to be
We expect PM to be transperant with new learning,,, and if you see that the reserve you kept for risks are not utilized and risks are already avoided... you should release the contingency reserve. The same goes in reverse... like if you need more that also you need to tell. so we need to calculate the Expected Cost at Completion on some milestones... and based on this we should request for rebaseline... now this cost could be more or less than the previous budget... the process remains the same.
But in practice... PMs never report extra budget... they only report when they need more :-) ....
Sandy10001
Sat, 08/09/2014 - 00:59
Permalink
PMI is not prescriptive
Lorenz,
PMI isn't prescriptive about what to do with unused budget. Best practice is to closely monitor and adjust the budget throughout but if you are fortunate enough to find remaining funds at the end of the project - regular or contingency - they would be returned.