Managing project financials

The capability to plan and budget project costs is a powerful tool to help you make effective project resource decisions. In

, you can create multiple revisions of both preliminary and final budgets and track actual costs against budget. If your IT organization has also licensed , the Project financials are integrated with the capabilities of . After you enter budgets and costs for Projects in , you will be able to create and compare budget scenarios that include costs from one or more Projects and perform various analyses on the budgets and costs that you entered for Projects in .

A budget steps are generally included in a project lifecycle template. The steps typically represent different revisions of a budget across different phases of the project.
For more information about how budgets are integrated in project lifecycle, see Planning a project.

Use case for managing project financials

This section describes managing of project financials use case that you might encounter as a project manager, portfolio manager, or a finance manager. Calbro Services user personas help to illustrate the user scenarios. The typical steps described by these use cases are in keeping with BMC best practices.

Paula is the portfolio manager in the IT department at Calbro Services. She is required to perform business analysis of upcoming IT projects and estimate budget requirements. The budget estimates are for analyzing the requirements and feasibility of the project and if the project is approved, she also needs to estimate the budgets for project implementation. Estimation of the budgets is very important at each stage of the planning process to ensure enough funding is available for project execution and to prioritize the projects for next fiscal period. Allen, who is a project manager, needs to provide actual cost values, identify the cost of ownership and provide a comparison of budgeted cost to actual costs of ongoing projects.

Paula can use the high-level budgeting feature of BMC Demand and Resource Management in the following ways:

1. Start with portfolio planning and analysis phase to determine high-level budgets for the projects and portfolio. Paula uses the overall estimated cost of the budget and uses the budgeting feature to distribute it over the duration of the entire project. To achieve this goal, she completes the following steps:
   • Estimates total cost of the project.
   • Starts a business analysis of the project(s) using the business case project lifecycle template.
   • Provides start and end dates of the projects in the portfolio.
   • Use the budgeting feature in project lifecycle to enter the overall budget value and distribute it equally over the duration of the project.
2. Use the portfolio scenarios to move or prioritize projects in a portfolio based on estimated budgets.
    Based on the budget data and resource availability, Paula can decide to change the dates of the project or estimate alternate budgets for some or all of the projects in the portfolio.
3. Perform portfolio analysis to determine if the business cases can be approved and promoted to regular IT projects.
4. For business cases that are approved and promoted to projects, Paula can assign Allen as project manager. Allen can start estimating preliminary budgets based on estimated costs.
5. Following the project lifecycle, and after gathering further information, Allen can add more details on yearly, quarterly or monthly basis to budget costs and generate final budgets.
6. For ongoing projects, Allen can specify actual values of cost incurred for each month for a project.
7. All versions of budget data that Allen generates are available in the BMC Demand and Resource management interface. Paula can use all the data to perform the following analysis:
   • Use the total budgeted cost (expense and capital) to identify total cost of ownership.
   • Specify actual values corresponding to the total budgeted cost and generate variance between the two.
   • Compare capital or expense only values.
   • Determine operating expenses by adding expenses and depreciating costs.