According to the standard definition, a project must consist of “a sequence of unique, complex, and connected activities that have one goal or purpose and that must be completed by a specific time, within budget, and according to specification.” [epm5e]. The requirement of a budget is what captures my attention. This requires the calculation of some up front cost, which requires one be in an organization that captures or defines many of the costs that go into a project’s budget. For example the cost of the people that will work on the project.
It seems to me (without having completed full rsearch on the matter) the requirement of the budget serves two purposes:
- an indicator of cost
- an indicator of success
These two items are really views of the same thing. The cost is to have an idea before starting the project of the investment required by the project sponsors. The cost also gives you an idea of what needs recuped, when it comes to something that will be offered for sale (e.g. a commercial software product).
As a success indicator, the budget is used to measure how well the project performed (this is not the only measurement, just one), Under, at and over are the success indicators.
Anyway, what has me musing is this: what if the organization does not define, or even care about, the budget? What does that mean for project management?
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