I have a lot of respect for accountants and their skills with money, but I’d advise against letting them loose on your schedule.
I was told when I first started out in the Project game, that if you want to cost your schedule effectively, you need to schedule your costs.
Sounds like the same thing, unless you’re one of the many PMO managers, like me, who’ve had to spend ages sorting out the mess caused by not understanding the difference.
Let me try and explain.
If you are running a project you can consider a top down approach. That basically means that you know how much money you think you will spend, and roughly allocate the budget to each month accordingly. You aren’t so concerned with the details of every widget, or nut and bolt, just that the cost doesn’t exceed the budget. You have a fair idea when the money would run out, so you know when the project will end. The money is easy to manage in buckets.
Another approach is to work out when you are likely to do stuff, what you will need to do that, and how much each bit will cost. In this way the budget you will need isn’t the “Take the total and divide by 12” top down approach for the year. It now looks at the duration of tasks to determine budget. The schedule drives the cost, not the other way around.
The first method can work for those projects that we sometimes refer to as “cookie cutter”. Essentially these are just sequential tasks that you do every day and you just move them to another place or time. For anything where there is some variability, this can result in some dramatic failures.
By taking a position that the schedule drives the cost, greater emphasis is placed on the things you need to do in order to succeed, not just whether you have the cash. This doesn’t mean you don’t look at the dollars; far from it. It’s just that the dollar forecast is the dependent variable of activity, not the independent control factor that the accountants would have you believe. There is little point in making sure you come in under budget, if you are now 5 years late and didn’t finish building that dream house!
If you focus on the cost only, you’ll miss things. You’ll forget the small yet important stuff. Like the water you need to get good concrete, or the nuts and bolts and crews that hold the door and windows in place. Those little costs that you thought wouldn’t matter can mean big cost blowouts when you have to manage delays as a consequence.
Yes, there is a little more to it than this (I have many scheduler mates who are great at this and can talk for ages on these topics….actually it’s harder to get them not to!) however the value you get from costing your schedule includes the utilisation of resources, and what will happen if things change.
You can’t do this in MS Excel.
I repeat for those of you who now have a guilty expression…you can’t do this in MS Excel. That is more like an artists impression of your hopes for the future than a schedule I’m afraid. It might look pretty in your slide deck, but not much use for ongoing decision making.
You will need a good bit of software (and there are some wonderful Aussie developers out there I can recommend who are world leaders and can help you if you need it.). You will need to connect the bits of your work. The who needs to do what, where and when and for how long bits.
I know it seems like sacrilege to say it….
It’s not about the cost.
Manage the work. Control the cost.
Do that and you’ll most likely find it is cheaper and you get better results in the long run.
And please get a scheduler to schedule, not an accountant!
