Enterprise Project Management MSPM1-GC4000: Project Budget Plan

This project plan focuses on establishing and managing a project budget. It defines the project budget as the total investment needed, including all resources, labor, and stakeholder costs. The plan emphasizes the importance of a defined budget and a spending plan to control resources effectively and prevent financial losses. It covers budget management, including the development of a management plan to control spending and avoid overspending. The plan includes preliminary budget estimations, categorized by wages, materials, equipment, software, travel, consultants, and contingencies. The plan also highlights the importance of considering market price changes and incorporating a buffer for unforeseen incidents. The overall project is estimated to cost $100 million, with the technology augmentation part assigned around 25% of the total budget, which is $25 million. The budget plan also includes sections on procurement, quality, risk, and change management, providing a holistic view of the project's financial and operational aspects.

Enterprise Project Management
MSPM1-GC4000
Edward Kleinert
The Project Budget Plan
The Project Title
The Organization Name or Business Unit Name or Department Name
The Project Solution
Authors Name:
Date:
Student Name:
Course Name:
Course ID Number:
Team Name and Number:
Date:
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Enterprise Project Management
MSPM1-GC4000
Edward Kleinert
Introduction and Purpose
Project budget is defined as the total amount of investment required to conduct the entire
project. The project budget includes the costs of all the materials and resources as well as the
wages of internal and external stakeholders and workers who are assigned to work in the
project. Generally, the overall budget is determined before the start of the project and efforts
are made to ensure the budget is not exceeded at the end of the project.
The main purpose of defining a specific budget for a project is to ensure the resources are
effectively spent in the project in a controlled manner. Without specific budget, unchecked
spending will occur resulting in significant financial losses for the company. Hence, it is
important to define a budget and also develop a spending plan for the budget throughout the
course of the project.
Budget Management
After determining the project budget, it is important to develop suitable budget management
plan in order to ensure the spending is controlled and there is no overspending in any sector of
the project. In any project, budget overshoot can result in significant monetary losses for a
company, which is not desirable. The overall budget consists of prices of material resources,
wages of workers, salaries of stakeholders, conveyances and others. The overall budget
estimation is a long process with the management team members and the project manager
discussing about various budgets and prices before finalizing a complete budget. During the
development of budget management plan, the possible changes in market prices are
considered in order to develop a final budget and also a buffer budget is to be considered in
order to cover for some additional spending due to unforeseen incidents. Once the budget is
developed and finalized, it cannot be changed unless a change is implemented in the project
that requires additional work.
The focus of a project budget management plan is to ensure there is no overshoot and should
involve all the stakeholders to understand their roles in managing expenses in their parts of the
project.
The Project Budget Plan
1. Refer to your high-level budget from the Initiate Stage
2. Refer to budget information for similar projects (If applicable)
3. Identify the detailed labor costs associated with the project tasks
4. Identify the detailed material costs
5. Identify any ongoing operating costs
6. Identify any other specific costs
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Enterprise Project Management
MSPM1-GC4000
Edward Kleinert
7. Build in a contingency by assessing the probability of exceeding those costs
The Preliminary Budget
Preliminary Budget Estimate
Category
Estimated
Cost
Percent of
Total
Wages and Salary $10000000 40%
Materials and Supplies $8000000 32%
Equipment and/or Hardware $2500000 10%
Software and Services $2500000 10%
Travel and Training $500000 2%
Consultants $1000000 4%
Contingency $300000 1.2%
Other $200000 0.8%
Total $25,000,000 100%
The overall project has been estimated to cost $100m but the technology augmentation part
has been assigned with around 25% of the total budget. Thus, the total budget for the
technology augmentation project is $25m and its breakdown is shown in the above table.
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