How to Budget EPMO/EPPM – Part1?

Calculation of the annual forecasted cost for budgeting purposes for EPMO and EPPM is a challenge for many Project Based Organisations (PBO). I am not talking here about contracted defined projects which is easy to forecast. I am talking here about permanent staff, shared staff and non-project cost budgeting.

We see this also in pre-construction stage where the development of the project studies and design are on progress. We see this mainly in the client’s side, developers, consultants, project management teams, contractors’ pre-contract stage and some type of construction’s contracts.

We see it also in the cost forecast on pre-contract stage in the stages of business development, marketing, proposal preparation, contract negation and also overhead staff during all stages.

The complexity and uncertainty around the forecasted EPMO and EPPM works load assumptions based on current projects and expected projects mixed with urgent emerging works (when it comes), make the budget forecast difficult. It becomes more difficult when the governance of the EPMO/EPPM is not meeting the corporates’ legal and auditing requirements. These requirements which needs clear and transparent financial cost record. This requirments force the management to keep their cost control calculations in Excel or in other financial software which contradicting the main purpose of having an enterprise system. The main purpose of having one enterprise system is to have an agile dynamic live easy decision making to avoid waste and maximise efficiency to meet the management strategic goals.

The solution was always about having all related EPMO/EPPM teams working in one platform or good connected different platforms. It is disappointed that there are still PBOs developing EPMO and EPPM using different platforms with high cost to establish, connect, maintain and operate. It ends up failing with deep regret. So, what’s the solution? Do we have a platform which allow all members of the EPMO or EPPM to work in it live and easy?

Many companies claim that they have the solution. The truth is, it is new methods which not fully guaranteed .

For me the best solution is the one which the team is familiar with. The one which they know with minimum training. The system which is excepted and used by their clients too.

I will share with you videos which provide an approved used solution and system which meet the above requirements. This system is using P6 Primavera EPPM which includes, scheduling, time keeping, cost controls and links to the documents in the server. It might not be the best system but it is the most used system by PBOs with no cost to invest to build EPMO or EPPM. It will allow to develop the maturity of the PBO to adopt the next solution if needed. It allows the PBO to work on EPMO/EPPM level with minimum cost. It allows also to link the schedule activities with their cost which is a must for the budget forecast success.

The videos I provides example will give a sample steps how to do an annual forecast budgeting for shared resources and for all OH staff. It will also provide the forecast update for the first month and second month and how to do it. Please refer to the Training Videos Page to watch the videos.

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Best wishes for you all

Engr, Ziad Albasir

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