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Copyright
The information contained in this document represents the current view of Microsoft Corporation on
the issues discussed as of the date of publication. Because Microsoft must respond to changing
market conditions, it should not be interpreted to be a commitment on the part of Microsoft, and
Microsoft cannot guarantee the accuracy of any information presented after the date of publication.
This White Paper is for informational purposes only. MICROSOFT MAKES NO WARRANTIES,
EXPRESS, IMPLIED OR STATUTORY, AS TO THE INFORMATION IN THIS DOCUMENT.
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group of companies.
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Table of Contents
Introduction...................................................................................................................1
Purpose............................................................................................................................1
Audience...........................................................................................................................1
Additional Considerations.............................................................................................14
Work Resource Rates......................................................................................................14
External System Integration.............................................................................................14
References....................................................................................................................15
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INTRODUCTION
Purpose
This document is intended as a “how-to” guide for budget and cost modeling using Microsoft Office
Project Server 2007. Microsoft Office Project Server 2007 is a great tool for coordinating and
managing project schedules and resources. While many users know the schedule and resource
management capabilities of Project Server 2007, most users are not familiar with the budget and
cost management capabilities of Project Server 2007. With Project Server 2007, you can set a
budget to a project, and track costs against the set budget. You can also group the projects so
that budgets and costs can roll up to a program or portfolio level.
The budget and cost tracking model was used at a federal government agency client site and it can
be applied at many organizations. The model enabled the agency to use Project Server 2007 to
track budgets and costs at a program level in a central location. Previously, the agency had to
access several separate systems (budget in one system, resource costs in another system, fixed
costs in yet another system, etc…) in order to get all of the necessary information to see a clear
picture of the program. Project Server 2007 enabled them to very easily capture and report the
budget and cost information from one central location in addition to providing them day to day cost
and schedule visibility out of the box.
Audience
EPM Community including customers. This document is based on actual customer experience
and is intended to be used as a guide for any organization that wants to do budget and cost
modeling using Project Server 2007.
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EXAMPLE SET UP
An example configuration will be used to better illustrate the budget and cost management
capabilities of Project Server 2007. In this example, FOO is a software company. FOO makes
COTS and custom software, and they have offices in North America and Europe. This guide will
provide step by step instructions and explanations to create and analyze views such as displayed
below.
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Department
The Department lookup table and custom field represents whether the example project is a custom
development software project or a Commercial Off The Shelf (COTS) software project. This field is
used in the example to group and aggregate totals including budgets and costs.
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Location
The Location lookup table and custom field represents the location of the software project such as
United States or Canada. This field is used in the example to group and aggregate totals including
budgets and costs.
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Budget Variance
The budget variance field is a calculated field to measure the difference between the budget cost
and the planned cost. A positive budget variance number indicates that the current planned cost is
less than the budget cost. Conversely, a negative budget variance number indicates that the
current planned cost is greater than the budget cost.
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Budget Indicator
The Budget Indicator is a stop light indicator field keyed on the value of the Budget Variance field.
If Budget Variance is a positive number, then the indicator will display green. If the Budget
Variance is a negative number, then the indicator will display red. This indicator can quickly show
what projects may need more attention with regards to cost management.
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Cost Resources
The following cost resources were set up to capture and track the different types of costs in
addition to the resource labor cost. You can add more resources or use less depending on the
needs of your organization. You can also set up a budget category custom field with values such
as hardware and software and then set each resource to the corresponding budget category in
order to aggregate types of costs.
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Budget and cost can be managed and tracked at the individual project level.
The basic steps to manage budget and cost at the project level are:
1. Set project budget at the project summary row (you must be in Task Usage view). For
detailed steps to creating a budget for your project, go to:
http://office.microsoft.com/en-us/project/HA101632951033.aspx?pid=CH100666641033
2. Enter costs for resources and assign resources to tasks. You can have cost rates and
per-use costs for work and material resources, as well as costs for cost resources. For
detailed steps to entering costs, go to: http://office.microsoft.com/en-
us/project/HA101921281033.aspx?pid=CH100666641033
3. Compare budget to cost. You can compare the baseline cost to the current planned cost or
the actual cost. In addition, you can compare the current planned cost to the budget cost.
You can track at the project summary level or at the task level.
Project
Budget
Cost
Resource
Work
Resource
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View Setup
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View Setup
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Data Analysis
Data Analysis views can be created to provide further analysis of budget and cost data. The
example below, Budget vs Cost Analysis, illustrates a data analysis view that shows budget vs
actual cost comparison for 2009 aggregated by department. The comparison is further broken
down into the 4 quarters of 2009. This view can also provide project level analysis within the
department as well as drilling down further into the months or weeks level.
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ADDITIONAL CONSIDERATIONS
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REFERENCES
Microsoft Enterprise Project Management home page: http://www.microsoft.com/epm
EPM Connect: http://www.epmconnect.com/US/Pages/home.aspx
Microsoft Enterprise Project Management Solutions :
http://www.epmconnect.com/US/pages/epmsolutiontour.aspx
Microsoft Project Server TechCenter (TechNet): http://technet.microsoft.com/en-
us/office/projectserver/default.aspx
Microsoft Project Developer Center (MSDN): http://msdn.microsoft.com/en-
us/office/aa905469.aspx
Microsoft Project 2007 blog – http://blogs.msdn.com/project
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