Additional Budgetary Considerations

When considering the human resources you' l l use, there are some components that you' l l need to think about during your budget process. First of all, a person' s skill level makes a difference in the amount of money budgeted for a task. A senior developer might make (including fringe benefits) $125 per hour, whereas a junior developer could make $95 and an entry- level one $65. So the level of the resource triggers the cost of a resource for a given task. Obviously, the length of time, the duration, that a task will take contributes directly to its human-resource cost. Likewise, the difference between obtaining the resource contractually versus using an inside person will make a tremendous difference in the cost of a task. Senior developers capable of cranking out the kind of code that you ' re interested in can be in the $250-$450/hr range on a contract basis. The good part is that these kinds of developers usually code very fast and can get done more in less time than a less skilled programmer.

You should budget for project trade-offs such as these. Is it worth your while to contract with a junior-to-midlevel programmer who charges $195/hr and will take 100 hours to write the code, or a senior developer with an impressive resume, one who charges $300/hr but can do the work in 75 hours? The junior will cost you $19,500, whereas the senior will cost you $22,500. All things being equal—that is, when the junior coder finally gets the code written, it' s as good as the senior coder' s, and the extra time won't hurt the project—the trade-off of skill level is worth the money. Analyzing the impact of such trade-offs is a valuable use of your time as a PM.

In another example, suppose that you know you need an enterprise-class server—one with lots of horsepower: six 1.5 GHz Pentium 4 processors, 12 GB of RAM, dual RAID-array controller cards, and a fault-tolerant data vault with 80 GB of storage. One vendor wants $59,000 for the computer; the other wants $50,000. However, the trade-off comes in when you compare the $500 per year maintenance costs for the former box versus $3,000 per year for the latter. You don ' t have to be Isaac Newton to figure out that there' s more value in purchasing the first computer if you intend to keep it for at least three years.

Finally, keep in mind that your finance and accounting office has a certain way that they like to represent things in their budget spreadsheets. Your budgeting should have the same sort of look and feel that they utilize, for easy transfer from your spreadsheet to theirs. If you have all of your cost centers, for example, in row-wise fashion in your spreadsheet, but the finance folks show the cost centers in column-wise fashion, then your friendly financiers are going to be not so friendly because they have to go to the work of converting your spreadsheet to their convention. If they weren't tracking 600 other cost centers besides yours, it might be easy to switch to your way of doing things, but with the huge amount of tracking they do, you' re better off matching them.

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