Financial Analysis and Cost Management

Every project manager should understand the business case for his or her project. What fundamentals do I need to know? What is a Return On Investment computation? How can I make good tradeoffs between saving time to market and spending more project money? How can I present the business case to my team in a way that will make it stick and affect the decisions they make? Are there financial metrics for my project that all of my team members will understand without being financial wiz-kids? What financial metrics should be part of my "project dashboard"? How is costing done on large capital-intensive projects?

• Is your project worth the cost? Have you included long-term costs and intangible benefits in your decisions about your project's value? The Cost Benefits Analysis Template walks you through consideration of all the angles, and a careful evaluation of the results.
• Don't settle for a vague sense that the project was a good thing. A Benefits Realization Plan documents the expected benefits of the project, details how they will be measured, and captures those measurements for later assessment and use in lessons learned.
• Our Tools and Equipment List template provides a format for thinking through and documenting the tools (e.g. hardware, software) and equipment needed during a project for testing, prototyping, etc. It helps the team get related costs into the budget, plan the proper timing and quantity availability, and track status
• Our Project Budgets and Cost Tracking template provides formats for documenting the costs to be incurred during a project. Draft budgets are created as the team investigates alternatives and makes project scope decisions. The final budgets document and coummicate the team's estimates for costs to be incurred to develop the requested features/ requirements etc.
• See our book list for some financial analysis and cost management references.