DPM School: Week 4 – Project Budgets

Successfully estimating a proper budget is all about getting the right amount of funding, resources in place, and finding efficiencies where possible to deliver quality in your projects.

By Profit Idowu

On November 30, 2019
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Did You Get Your Estimate Signed?
If you’re a client, a project budget or estimate from the partner or vendor needs to be approved before the work begins. In an agency, almost all work needs to have an estimate associated with it before any production can move forward. Having paperwork signed, stored, and kept safe is just as important as following up on those conversations across teams where the estimate was approved over email, but never signed. It’s not a good feeling (especially on an agency team) when someone in finance sends you a question like, “Hey, I can’t find an estimate for X job or project. Can you send it to me?” And the result, after clearing your whole inbox, is that you can’t find it. When entrusted with leading a project or being the main point of contact, I’m a strong advocate for fully executed contracts on both sides. It’s a small detail, but the details matter.

While creatives are focused on making the next great commercial, banner ad, or AR experience, people in roles like mine are crossing our “t’s” and dotting our “i’s.” Enabling the actions and most importantly, the flow of funds, to get the work made. Design and art direction are crucial, but budgets need to be a priority as well. A key part of that is estimating successfully. Estimating a proper budget is all about getting the right amount of funding, resources in place, and finding efficiencies where possible to deliver quality in your projects despite the cost.

Getting to “A Number”
New Client: “We don’t have a budget yet, but can you just tell us how much it costs so we can get going?”

Every account or project management professional:

via GIPHY

New team, different project, same situation.

What’s next is knocking out a list of questions that’ll help you come up with a proper estimate.

  • Is this project in scope or out of scope?
  • Are there production costs I need to consider?
  • What needs to be noted for me to communicate well with my finance team and my client? (Notes are important: Reconciling which estimate belongs with what during year-end billing can take longer than it needs to with improper documentation and weak notes).
  • Are there talent or residual costs?
  • Are there licensing costs?
  • How much contingency do I want to factor in my estimate?
  • Do we need to travel and should costs be included or separate from this estimate?

The DPM school has us spitting out these deliverables for our assignments within a week. Realistically, you’re not turning around a whole project plan and estimate without checking with the chain of command. Like chatting with your CFO for the proper blended rate to use or checking with your team about how many hours tasks might take. All these questions to approach and the number of hours needed can take much longer than a week to think through and gather. The hard part is getting enough space, collaboration, and enough time to get it done right, but the more senior you get and the more senior the team you work with is—the less time you’ll need to put one of these together.

My project estimate was built with the issues agencies and cross-functional teams have to face day-to-day. Growing demands and not enough resources to match creative output. The hypothetical team I put together was comprised of a project manager (playing the role of an account supervisor, strategist, and customer relationship manager), Lead Designer, two Engineers (back-end and front-end development), and one data entry professional (for the stuff clients don’t like doing on their own) all billed at a blended rate.

  • 172 hours allocated for the Project Manager
  • 69 hours allocated for the Lead Designer
  • 191 hours allocated for Back End Development
  • 158 hours allocated for Front End Development
  • 16 hours allocated for Data Entry

In total, the project to build a new blog homepage and post type would take roughly 605 hours spread over a period of four (4) sprints starting September 1, 2020 through December 4, 2020.

Slack Chatter: Concerns about Estimation
Every week, Alyson prompts the class with certain questions to spur conversation or get us thinking outside of the box. One of the questions this week was, “What are your biggest concerns when it comes to project budgets and estimates?” Here was an answer that was decently thoughtful from my class section that didn’t mention issues with SOW or scope creep:

I’m in a unique role where I’m part of an internal team with internal clients. Therefore, we don’t have to make formal project budgets hardly ever considering we’re all under one roof working for the same team. My biggest challenges are: 1) The definition of done. With internal clients, they often desire more and more as time continues on vs. making a new request. Even if it’s out of the scope for that particular project. 2) Adhering to project timeline. When we have to collaborate with another department, oftentimes they don’t feel obligated to align their work with our approved timeline because their workload takes priority over ours. It’s a constant balancing act, but one we all work to get better at!

Tools for Estimation

  • Microsoft Excel – Probably the most widely used project cost estimator.
  • Google Sheets – Similar to Excel.
  • Eastimate – Free estimating SaaS tool.
  • Simplestimate – Free project cost estimator. Built-in three-point cost estimation and easy sharing functionality.
  • Web Development Project Estimator (Git Hub) – A simple project cost estimator that was created so web designers and site developers can quickly and thoroughly estimate the time and materials required for a proposed web project.
  • Wrike – A complete project management software tool, including cost estimation and workflow management solutions.

Recommended Reading & A Look at Next Week
Along with our video resources, these were the recommended reading resources for additional guidance on project estimation techniques:

Week 5’s assignment is dependent on this one. Connected with the project plan and estimate I produced above. Next week, the theme we’ll cover is centered around Statements of Work and important principles on how to use it to keep a project on track.