It is very common that project managers keep the tasks schedule and project costs in different tools. But this leads to additional work to track the project. As well as possible mismatch between your task status and the cost profile.
In this post we will discuss recording costs in Microsoft Project, but many project management tools allow you to maintain a rate card and track costs. So the concept discussed can equally apply to all good planning and PPM applications.
Creating the plan with project costs in mind
When creating the project plan you will have an outline of the tasks involved. Then assign resource to each task. For discussion let us assume we are looking at a waterfall approach for our example project. You then use the cycle of defining the detail for the project. Followed by designing the solution. Then building a solution and finally deploying that solution. Creating the plan structure and tasks and assigning resources means you then have most of the information to create a budget schedule.
So why duplicate that effort to use a spread sheet to maintain your project budget. You also risk a mismatch between your schedule and your cost tracking by having them in separate places. Applying a cost rate is easier to achieve if your planning tool provides a rate card and cost breakdown.
Tracking you Project
Where you have costs information, resources and schedule maintained in the same place you can track all these elements at the same time. Not only does this avoid needless duplication it mean your data will be aligned in your project. This approach also provides a good return on your effort, when rates need to change, or the project has to be changed to address a risk, issue or change request.
Does this approach have merit for agile projects
Although this discussion has focused on waterfall approach to your project it can be applied to agile projects . Your budgeting and tracking process may not be mapped in the same way. You are likely not to assign fixed and rigid estimates to tasks in the agile plan. The plan structure itself may not have the same detail schedule as a waterfall schedule. But there will be a level of plan that you can track sprint status and record time taken. This can lead to reporting costs in the same plan as your schedule. Microsoft Project now allows better use of agile task boards and planning for sprints, at the same time as allowing project managers to maintain a high level view.
In summary it can offer major benefit to the project team and project manager to include cost recording and tracking with the schedule. Why would you want to keep them apart and incur extra work and reduced data quality.