Budget

Short Tip: The document detailing the costs required for developing the product.

What is it?

It is the document that details the estimated costs for product development.

Why use it?

With products of a predictive nature, it is necessary to identify costs in order to feed other systems and processes of the organization, such as budget planning. In these contexts, the lack of a financial schedule increases the initiative’s risk and may, in extreme cases, cause interruptions in product development.

How to use it?

The identification of costs results from other documents already created, in the following steps:

• Based on the detailed project schedule, make a cost estimate for the execution of each activity planned therein;
  • For each estimate, consult the development team and/or experts about that particular activity, including the necessary human resources;
  • For each estimate, record the calculations performed. It may be necessary for later reference;
  • Don’t forget to include any material resources (acquisitions) essential to carry out the activity;
• Identify some opportunity for cost optimization (e.g., price reduction based on batch purchases for multiple products);
• Consolidate costs over time to have a monthly estimate;
• Draw up a financial schedule on the timeline with estimated amounts. It should be consistent with the other existing documents (detailed schedule, WBS, etc.).