Cost Plan vs Project Budget

[atommag]

Dear All, 

I am looking in the online documentation for the more detailed definition of what is called as Cost Plan and Project Budget to understand the intended use of these functionalities. 

As far as I understand the finance world: 

* cost plan is an estimate by someone that is able to provide such an estimate

* budget is what is approved to be utilized

Important difference that I see in the documentation is that: 

* cost plan: can be created by project manager

* project budget: can be created by portfolio manager i.e. I would guess that it would reflect amount of money that portfolio committee approved. in case of the iterative funding project budget  < amount in cost plan.  

Could you help to understand? 

Thank you in advance. 

[atommag]

Hello @Ben Barrow 

Thank you for this explanation. This is very clear. 

We are moving in our organization to the iterative release of the funding i.e. we do not approve the amount that is needed for the full project but only for a first iteration and then based on the outcomes more will be released or not. Any experience in such a way of working that you could share?

For example: 

- full estimated cost is 1000 000 for 1 year duration. And the portfolio decision body pre-approve it from overall perspective but not giving rights to spend it all. 

- decision body approved budget of 300 000 for 3 months in FY20. 3 months later (still FY20) next decision is made about next chunk of money for example again 300 000. 

So I am wondering how to reflect this way of working and keep track of the total cost (that was pre-approved but not released) just to be prepared in case approved for more release. 

In the case above: 

-total planned cost in the Cost Plan would be 1 000 000 distributed per months as needed

-budget would be 300 000 in the first iteration and then 600 000 in the second one ... and would increase until reaching the total cost

Any experience/recommendation? Thank you in advance.

[Chris K]

@Ben Barrow any insight on why cost plans have an associated cost type, but project budget lines [project_funding] do not?   Have you ever seen project_funding customized to include a cost type field?

[Sanjiv Sachdev]

Hi @atommag your scenario would probably be best served by investment funding.  This would allow the decision body to release a defined amount to fund the work over a certain time period e.g. three months.  As the funds run out, the project would need to return to ask for more but also demonstrate what has been achieved to date.  

Investment Funding

[LB8]

Why does scenario planning not show the project budget? It appears that the planned cost is displayed rather than the project budget.  And the planned cost is displayed in the planned budget field,

[Vinay3]

Scenario Planning is a Portfolio level tool where a Portfolio manager evaluates the planned costs of the projects they would like to approve for a planning cycle (ex: a year) against their Portfolio target. When the Portfolio manager selects the Demands/projects as 'In Plan' and confirms, the amount equal to the Planned cost for the year will be approved as the Budget for the projects/demands and gets populated as the Budget.

The flow in this case is as below:

1. Project Managers add estimated costs through cost plans to the demands/projects

2. Portfolio Managers uses scenario planning to evaluate the total cost of the projects in plan and Confirms the plan for a fiscal year

3. Amount equal to the Planned costs is allocated as 'Budget' to the demand/Project for the fiscal year