The key step to cost budgeting is to determine all the requirements of the project. This must be obtained from the identified stakeholders (both external and internal). This includes defining the scope of work, identifying the specification of materials, estimating the number and skill of labour required. The kind of methodology expected, the quality tolerances expectations and the possible risks associated. Understanding the methodology being employed to achieve the end product also aids in understanding the operational challenges and requirements along with the allied costs. Looking back at similar projects and their budgets is a great way to get a head start on building your budget. At this stage, it is also important to take permits, approvals, environmental or safety requirements into consideration as they may be needed in future stages and can also have an impact on the cost. One must make it a point to capture the assumptions behind each of these requirements in order to allows baseline updates in case of change in scenarios.

Creating a schedule involves determining the timeline for the project and identifying key milestones. Once the budget is locked, you also have an idea as to which sections of the project need more attention and are cost intensive. However, through all the processes, it’s important to factor in any dependencies or constraints, such as weather conditions or material delivery times. This exercise also helps in getting clarity of the required cashflow for the project. The schedule needs to be aligned in line with the organisation’s planned funding strategy.