Goal: Adjust costs to keep the project on budget

Applies to
Microsoft Office Project 2003
Microsoft Office Project Server 2003
Microsoft Project 2000 and 2002

Assume you discovered a problem with your project's budget. Now what? Once you identify a budget problem, you can take corrective action by using Project to fix the problem and to re-optimize the schedule for cost.

 Tip   This article is part of a series of articles that describe a broad set of project management activities. We call these activities "goals" because they are organized around the project management life cycle: Build a plan, track and manage a project, and close a project. The project life cycle is outlined in The Project Map, where you can find a link to an article about each project management goal. Most of the articles include links to supporting information or procedures that you perform in Project or Project Server. These "goal" articles were designed to help you not only use Project but also better understand project management.

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Cash register

number 1 Determine how quality affects costs     Consider your options when you have to reduce costs.

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When costs accumulate beyond the range of your budget (budget: The estimated cost of a project that you establish in Project with your baseline plan.), you should decide what action to take to keep costs under control. The schedule (schedule: The timing and sequence of tasks within a project. A schedule consists mainly of tasks, task dependencies, durations, constraints, and time-oriented project information.) changes that you make to stay within budget depend on what's most important to you. You can sacrifice quality (quality: The degree of excellence, or the desired standards, in a product, process, or project.) by using less expensive resources (resources: The people, equipment, and material that are used to complete tasks in a project.), such as people with less experience or materials of a lower grade, and you can change the scope (scope: The combination of all project goals and tasks, and the work required to accomplish them.) and simply remove some of the tasks (task: An activity that has a beginning and an end. Project plans are made up of tasks.) that you meant to accomplish.

Or it may be better to spend more on quality resources if those resources help you complete the task or project in significantly less time, which may result in lower costs.

Whatever actions you take to reduce costs, be sure to consider their effects on other tasks, resources, and the project's deliverables (deliverable: A tangible and measurable result, outcome, or item that must be produced to complete a project or part of a project. Typically, the project team and project stakeholders agree on project deliverables before the project begins.). You may also need to renegotiate quality with customers and stakeholders (stakeholders: Individuals and organizations that are actively involved in the project or whose interests may be affected by the project.).

Number 2 Optimize the plan to stay within budget    

Click all of the following that apply:

Number 3 Add notes about cost adjustments     You can keep a record of the decisions you made to keep the plan within budget.

Number 4 Examine the effects of cost optimization     You may want to examine the impact of changes you made on resources, dates, costs, and other projects.

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Number 5 Save a budget with cost adjustments     You may need to add the adjustments that you made to your baseline plan.

Number 6 Communicate the plan to the team     You can communicate the changes you made to the plan electronically or in print.