Budget Management & Control


Budget Management

Budget managment with MPI will automate, streamline, qualify and speed up the information flow between project managers, department responsibles and top management.

Here you can read about our novel and highly efficient approach to Portfolio Budget Management & Control.

Overview

Who might benefit from Budget Management with MPI?

Organizations who work with a continuous stream of projects of significant value, regarding budget, duration and diversity of resources needed. Where top management, in view of the total size of budget and importance for the future, want to strengthen the control and decision power to reduce losses and assure that the performance is optimal.

CEO’s, CFO’s, CDO’s, CIO’s, CEO’s, budget managers, Project Office responsibles, accountants and management consultants.

We will now introduce you to the the principles and novel elements of MPI and describe the business processes for Budget Management with MPI. We also put Budget Management in context with project planning, resource staffing and project execution.

Project Portfolio Control, driven by projects and resources

MPI – Budget Management comes with a library of preconfigured views for all basic functions.

Implementation is quick and focused on your objectives and preconditions. See examples of views further down on this page.

The basic processes are listed below, referring to the figure above.

Initial system setup

Define content of fundamental data tables and eventual import relevant data from ERP, Excel, projects tools using the MPI data-interfacing engine. Some data will be more practical to type in.

The main tables are:

  • People and other resources
  • Financial account structure replicated from ERP
  • Pricelists and rate schemes for cost and revenue

You go through the different parametertables controlling priority codes, project status, working hours, calendars, etc.

Build templates for projects where you define the mapping of financial accounts to activities and resources.

The initial basic setup can be extended and modified over time as seen fit.

Project data

You can import project data or create them manually using the appropriate template. Define basic data like type, start and end dates, customer, owner, budget, pricelist, etc.

You also can create internal projects, which control the internal cost structure.

Assign resources by role, category, department, team or name.

Monthly project forecast by project managers

The project manager types in planned hours pr. resource assigned month by month during the life time of the project using the Gantt grid. MPI calculates cost and revenue automatically based on pricelist information.

For other types of resources, you might forecast by money or other values.

Actuals are imported from time registration/ERP.

The project manager is assisted by information available from previous monthly reports, base line budget and aggregated values for actuals up to to days date, forecast periods and total.

Indirect cost forecasting by department responsibles

Likewise department responsibles will provide indirect cost forecast on “general projects” with associated resources and pricelists.

Capacity forecasts

Each person has his or hers capacity defined with working hours, holidays and other foreseen changes in availability.

MPI aggregates automatically  available capacity by period, department, category etc.

Department responsibles authorize the capacity per month his department is committed to deliver.

Approval work flow

When the project forecast is approved it is stored and locked as a snapshot so it can be used for later analysis.

Management Information

The important information presented is actual status and forecast compared to base line budget. Is the project and the economy on the right track roughly as planned or not.

Spread sheets, intuitive graphical dashboards with drill down to details are used for presentation to management. Dashboards might include historic data to provide trends and automatic analysis of changes.

Sums by period are made, e.g. from start to end, from start to actual month, from actual month to end etc.

A full budget Profit and Loss Statement can be generated in a minute with reference to the financial account mapping by activity type and resource category.

Reports can be filtered on departments, type of project or any other parameter or combination hereof.

Decision making

When the unforeseen happens or conditions change, management has to decide what to do.

The main point is that decisions about the individual project should never be taken without considering the whole with a global view. There are constraints across projects, which are be considered:

  • Total budget for project work within different domains and cash flow
  • Speed of pay back
  • Constraints in resource capacity for different categories and even key persons
  • Dependencies between projects and sub projects.

Typical decisions to be made are changes in:

  • execution period, start end, duration,
  • allocated budget,
  • resource type and capacity assigned,
  • resource sourcing from external sources or other departments,
  • the worst case, premature termination.

Therefore, it might be a help to work with alternative scenarios.

You can expect significant results.

Savings in administrative costs, improved speed of information.

Consolidated portfolio overview with drilldown to details and other analytics. 

Faster repsonse, faster calculations of consequences from decisions. 

Delivery of capacity as promised. Quicker results and better cash flow.

Platform

Budget Management is built into our generic and powerful MPI platform, which you can read more about on our Product Page.

The general elements include extensive configuration functionality by the end user of “perspectives” / combination of views extended compared to what you will know from Excel with filters, sorting, definition of rule and formulae based calculation, report generator and dashboards.

In addition graphical interactive charts like Gantts, bottlenecks, break down structures etc.,

One central SQL database, functions to import and export data, Microsoft .Net.

MPI is one standard system coming in new versions at least twice a year, always backward compatible.

No need for programming.

This ensures low TCO and top quality.

Configuration

People, Pricelists, Projects & Financial Accounts

Simple model of budget data structure in MPI

Projects define what you want to do. You can limit yourself to the top level or you can extend with sub projects and work break down including dependences as you will have in any project management tool. Such data can be imported. Projects will have different parameter values, e.g. status (released, started, pipeline, strategic option), type and priority.

You can also use projects are for calculation and control of indirect costs with associated drivers like wages, house rent and whatever.

Roles and other resources constitute the primary dimension for control of capacity, cost and revenue. Resources are generic, e.g. individuals, teams, roles, departments but also materials, equipment and other entities required to perform a specific project or job.

You assign resources to projects on top level or to jobs in a work break down structure. You enter requirements into time cells month by month as hours, pieces or another measure. It could also be money or any other entity directly.

Pricelists and cost/revenue rate tables define the automatic transition from physical entity to money consequence, i.e. planned hours automatically multiplied by the appropriate rate, normally defined per resource category, which results in amount/money for each resource per period. Pricelist also opens for more advanced pricing schemes for automatic calculation of revenue and fixed amounts. All rates can be data controlled.

Financial accounts You use project templates to hold and standardize the link to accounts so that numbers end up in the right boxes when you make reports across projects, e.g. complete Profit and Loss statements. 

Your budget system is ready when the four above elements have been defined. You can read more about our platform and use areas here.

Input

Monthly Forecast

Monthly forecast by project managers for each project by resource type or category and month. The numbers entered are hours and other values. Accumulated values for actuals, already spent time and money, are shown and new total forecasted values are shown together with baseline budget. All values are shown as hours, money etc.

project-budgeting

Example of Project Manager forecasting costs on a project

Project Manager can add other information for management’s attention to the report; comments, logs, risk evaluation, probability, etc.

When figures are ready, the project manager starts a workflow for approval by PMO, controllers or other responsible.

Capacity forecasts

Each person has his or hers capacity defined with working hours, holidays and other foreseen changes in availability.

MPI aggregates automatically  available capacity by period, department, category etc.

Department responsibles authorize the capacity per month his department is committed to deliver.

Capacity forecast on Departments

Rolling Forecasts. Earned Value Analysis

  • Earned Value Analysis (EVA) is used to determine if a project is providing value for money or not. It also discloses cost overruns.
  • EVA concentrates on three basic parameters:
    1. How much work SHOULD have been done so far (PV)
    2. How much money has ACTUALLY been spent to progress the project so far (AC)
    3. What is the VALUE of work that has been accomplished so far (EV)
  • The report consists of two parts: chart and table. Each controlled by settings.
  • Multiple Projet Report generation with selection of different Values

  • Export Project Reports directly as PDF, Word or Print

Cost & Revenue Forecast on Timeline

Cost & Revenue displayed on the timeline. Cost types are grouped.

 Click on the navigation arrows to see drill-down on level of budgeting

Decision Support

Management Dashboards

Consistent. Real-time. Accurate.

  • Intuitive graphical dashboards with drill down to details for presentation to management. Dashboards might include historic data to provide trends and automatic analysis of changes

  • The important information presented is actual status and forecast compared to base line budget

Project Reporting

Budgets, Forecasts, Project Evaluation

Generating a periodic Project Report

Reports for management based on project report forecast and other information. It might be portfolio overview, trend analysis and financial reports for Profit & Loss statement. MPI comes with a number of standard reports which can be modified as wished.

After final approval, the project report is stored and locked with all relevant information for distribution and as source for reports on status and trends.

Project Reports

MPI calculates cost and revenue automatically based on pricelist information.

Profit & Loss statement in MPI Dashboard

MPI calculates cost and revenue automatically based on pricelist information.

For other types of resources, you might forecast by money or other values. Actuals are imported from time registration/ERP. The project manager is assisted by information available from previous monthly reports, base line budget and aggregated values for actuals up to to days date, forecast periods and total.

Profit & Loss

A full budget Profit and Loss Statement can be generated in a minute with reference to the financial account mapping by activity type and resource category.

Reports can be filtered on departments, type of project or any other parameter or combination hereof.

Sums by period are made, e.g. from start to end, from start to actual month, from actual month to end etc.

The important information presented is actual status and forecast compared to base line budget. Is the project and the economy on the right track roughly as planned or not.

Example of Profit & Loss statement with spreadsheet in MPI

The entire organisation will be on the same page.

No more wasted time with duplicate efforts,

and confusion about versions on the same data.

Statistics & Trend Lines

Examples of Statistics & Trendlines

ABC-Diagrams. Portfolio Overview

  • Group and compare your portfolio on 2 dimensions: Status, durations, priorirty, type, risk, resource load, economy, value etc.

Contact us and get started already today.

Marstrand Planning intelligence is powerful and feature rich. But that doesn’t mean it takes forever to see results. We’ve designed it to accelerate time to value. 

Stories

  • Financial & Project management for public companies
  • Budget Control for financial IT Development
  • Budget Management for banking and insurance services

Pricing

Immediate needs first

Additional capabilites as your business grows.

MPI have been designed as one product. From the ground up.

– Seamlessly

– Easily Implemented

– Fully Functional

No Additional Software to purchase ever.

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