GEOG 871
Geospatial Technology Project Management

Project Resources and Cost Management

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Project Resources and Cost Management

Project managers must account for the cost of all resources that will be necessary to meet the scope of the project within the scheduled time. This is a difficult thing to do well. If enough resources are not allocated, the project will exhaust the budget before completion. Some unseasoned project managers, seeking to get funding approval to carry out a planned project, are apt to underestimate costs in order to make the project more attractive and increase the likelihood of approval.  That approach is counter-productive because it often results in a shortfall of necessary funds or staff resources to complete the work. It is much better to fully estimate costs and apply a reasonable contingency to account for project risks that could impact resource requirements. It is vastly better to complete the project under-budget than be forced to "pass the hat" to obtain more funding to complete project work. 

Organizations have many strategies for most effectively using project resources while managing costs. Some government agencies and private companies have put in place a project management office (PMO). A PMO establishes best practices for project planning and management, provides templates for planning and monitoring, assembles a library of information on past projects, and provides support to project managers and teams.

Estimating labor time and direct expenses for projects is challenging--particularly for an organization or an assigned project manager that has limited experience in similar projects. Sound project budgeting can take a considerable amount of research and time, but that is a worthwhile investment. Some general practices that can help in estimating project resources are:

  • examine work plans and budgets for similar, past projects in your organization and consult with personnel involved in those projects;
  • communicate with peers and colleagues in other organizations about their experience on similar projects;
  • do necessary research on direct expense items (costs for travel, computer software, equipment);
  • contact vendors and contractors to get input about potential costs for contracted services (e.g., field data collection) based on their experience in similar projects;
  • use a cost estimation tool (like a formatted spreadsheet) with sufficient detail to capture labor time and rates and all direct cost items;
  • use the cost estimation tool to generate high-cost and low-cost versions and use that as a basis to prepare a final budget.

Estimating resources and preparation of project budgets is tricky but becomes easier as your experience in project planning increases. But in many cases, it is necessary to do some research to gather figures and not just "pull numbers out of the air". The success of your project and of you as project manager depends on doing as effective job as possible with budgeting.  Estimating labor time can be particularly challenging. In most GIS projects, you need to focus on actual work time for project team members, not the duration (calendar time) of a task. For instance, a project may have a task called "prepare geodatabase design". The work and completion of that task may occur over a 2-week period (taking into account some delays, wait time for review and comment, etc.) but the actual labor time might be only 30 hours or less.  The point is that for many GIS projects, team members may not be assigned full-time to the project or a specific task.  Task duration (calendar time) and labor time are related but they are DIFFERENT and measured or tracked separately.