Gathering the Project Funding Requirements

Project funding requirements describe the need for funding over the course of the project and are derived from the cost performance baseline. Funding requirements can be expressed in monthly, quarterly, or annual increments or other increments that are appropriate for your project.

As I said earlier, spending usually starts out slowly on the project and picks up speed as you progress. Sometimes, the expected cash flows don't match the pace of spending. Project funding requirements account for this by using a management reserve (usually a margin or percentage of the cost performance baseline) that's released in increments with the project budget. Figure 5.2 shows the cost performance baseline, the funding requirements, and the expected cash flows plotted on the S curve. The difference between the funding requirements and the cost performance baseline at the end of the project is the management reserve.

FIGURE 5.2 Cost performance baseline, funding requirements, and cash flow

FIGURE 5.2 Cost performance baseline, funding requirements, and cash flow

We've now completed two critical components of the project plan, the project schedule and the project budget. I've mentioned several times throughout the book about the need for documenting, publishing, and communicating project information. As you can imagine, the PMBOK® Guide has a process for communications. We'll discuss it next.

Project Management Made Easy

Project Management Made Easy

What you need to know about… Project Management Made Easy! Project management consists of more than just a large building project and can encompass small projects as well. No matter what the size of your project, you need to have some sort of project management. How you manage your project has everything to do with its outcome.

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