These five steps can help you put the finances together and create a simple IT project budget summary:
- Break down your project into tasks and milestones. Working with your task list will give you an understanding of what you’ll need to accomplish and help you with project cost. If you already have a task list, that’s fine, and you can start right off. But if you don’t, start writing down everything that your team needs to do.
- Estimate each element in the task list. Now it’s time to give each element that you’ve written down an optimistic (most likely) At this point, identify all the resources (Internal & External Labor) and Hardware/Software you’ll need to perform well and include them into your estimate when calculating the price.
- Add your estimates together. This is probably one of the easiest parts of the project budgeting process, especially if you have a spreadsheet with two columns: Tasks and Costs. Then, you’ll be able to calculate the total fast.
- Add contingency and taxes. Better safe than sorry. Of course, you can’t be 100% confident about the final estimate, as things change all the time. By adding contingency and taxes, you make sure that the IT project doesn’t go over budget and your estimate number is closer to the final costs you eventually spend. If you don’t know how much contingency to add, we recommend going for 15% of the estimate of the total resources
- Get approval. Talking to your manager to approve project costs would be the last thing in the project budget creation process. Make sure you have sign-off so that change management during the project lifecycle can be easier and more efficient.
