Cost, Budget and Performance

Cost, Budget and Performance

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When managing a project, you will constantly need to evaluate cost, budget and performance. This is
important in order to be aware of how much the project has already cost the organisation, and how
close you are to meeting or exceeding your budget. You will also need to evaluate whether the project
and the project team are meeting their expectations. A budget template can help you effectively
monitor your project’s cost and budget. A budget template is often completed using a spreadsheet such
as Microsoft Excel, and helps you organise the finances of your project by monitoring employee
compensation, legal fees, professional fees, travel expenses, marketing expenses, office expenses and
overhead costs. Using a budget template will help you keep your budget under control and provide

financial information to your supervisor or other senior leaders at the organisation.

In your Resources for this unit, you will explore various ways to measure elements of a project. A
technique you will explore is the Balanced Scorecard (BSC). The BSC helps measure organisational
performance in relation to the organisation’s strategic goals, incorporating financial measures as well as
business processes. The BSC aims to find balance between internal and external measures; objective

measures and subjective measures; and performance results and the drivers of future results. In the

media for this unit, you can view a graphic of what a BSC entails. All of these tools and techniques can
help a project manager effectively monitor and control projects, resulting in increased potential of
project success.
To complete this Activity:

1. Review your scenario (Appended below the initial scenario presented by us).

2. Develop a budget template for the project in your scenario.
3. Develop a BSC which includes your suggested KPIs in the four BSC categories for the project in
your scenario.
References
Bower, D. C., & A. D. Finegan, (2009) ‘New Approaches in Project Performance Evaluation Techniques’,

International Journal of Managing Projects in Business, 2 (3) pp.435-444.

Bright Hub PM, (2012) Examples of a Project Management Budget, Available at
http://www.brighthubpm.com/templates-forms/61658- examples-of- a-project- management-budget/
Lauras, M., G. Marques, & D. Gourc, (2010) ‘Towards a Multi-Dimensional Project Performance
Measurement System’, Decision Support Systems, 48 (2) pp.342-353.
Lenfle, S., & C. Loch, (2010) ‘Lost Roots: How Project Management Came to Emphasize Control over

Flexibility and Novelty’, California Management Review, 53 (1) pp.32-55.

Pajares, J., & A. López-Paredes, (2011) ‘An Extension of the EVM Analysis for Project Monitoring: The

Cost Control Index and the Schedule Control Index’, International Journal of Project Management, 29 (5)

pp.615-621.

Toor, S. R., & S. O. Ogunlana, (2010) ‘Beyond the ‘Iron Triangle’: Stakeholder Perception of Key

Performance Indicators (KPIs) for Large-Scale Public Sector Development Projects’, International Journal

of Project Management, 28 (3) pp.228-236.

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