Another very important scope document element is the budget. Within this element, you' l l define your anticipated budget and include several other items of note that are pertinent to the budget:
■ The plus or minus tolerance of the budget—a percentage that stipulates how far off of budget you can vary as you go forward with the project.
■ Contingency funds and/or management reserves—those funds that you are sure you can draw on if you need to. Do not declare these if they' re speculative.
■ The consequences if the budget is not met.
On a very large project, an executive project committee will set permitted cost and time scale limits, and those limits determine the tolerance. A server rollout isn t going to necessarily have an "executive project committee," but a project involving a full-scale conversion to PeopleSoft for the entire organization may. The method by which budget tolerance is determined often depends on the size.
Obviously, the minus tolerance (how far below the budget you can fall) is less important than the plus tolerance (how much over the budget you can go). But the minus tolerance has relevance in the form of safety. You can' t put less concrete in the bridge girders just because by doing so you save $1 per bucket and thus come in way under budget.
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