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Cost of a new novel project?

In budgeting Finance and Accounting | 5 comments

I need to cost a project for which we have no experience. Does anyone know how to set a budget for a project like this? any hints or tips?


  • Jonathan Norman
    By Jonathan Norman

    I have three suggestions:
    1. Make sure your sponsor knows just how novel (and consequently) unknown this project is like to be;
    2. Try breaking it down into chunks to identify the elements that you are familiar with and can cost accurately and those which are totally unknown to you;
    3. Find someone who has done something similar and co-opt them into your budgeting;
    And a final question ... does it need to be quite as novel? Are you over-ambitious with your scope and might you be better to shoot for something less innovative that might fit the requirement (even if that were only a temporary stopgap)?

  • Jean  Binder
    By Jean Binder

    Good answer Jonathan. Another important step would be to assemble the team and estimate the work/duration/costs with them.

  • Jean  Binder
    By Jean Binder

    Thanks Jonathan. Other idea is to assemble your team and do #2 together with the team members.

  • Martin Hopkinson
    By Martin Hopkinson

    A couple of further suggestions to add to Jonathon's:
    1. Use the project concept and definition stages to reduce the implications of novelty, e.g. through research work packages, resisting the temptation to approve the main project delivery phase to such time as you can be assured that the risk is acceptable.
    2. Consider whether you are combining novelty with other risky project characteristics e.g. size, complexity and multiple stakeholders. A small uncomplicated novel project is one thing. A large and complex novel project is another.

  • Mounir Ajam
    By Mounir Ajam

    1. Pray
    2. Whatever you think it cost you - double it or triple it.

    Dale - can you elaborate on the industry at least so we can offer some advice, if possible.

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