Managing schedule, cost and resources in PM²: forecasting, not merely recording

Twenty-second article in the “Learning PM² Through a Project” series

Saying that a team worked many hours does not show whether a project is healthy. Managing schedule, cost and resources compares what was planned with what has actually been achieved and with the forecast to complete.

In PM², the Project Work Plan provides a basis for this control: deliverables, activities, estimates, schedule, dependencies and responsibilities. During Monitor & Control, that basis is compared with actual progress and updated only through controlled decisions when needed.

The three questions to ask constantly

The three dimensions are connected. Adding people can increase cost; compressing a date can reduce quality or increase risk; moving an experienced resource can block dependent activities.

Baselines: the reference for measuring deviations

A baseline is an approved version of a plan. For managing schedule, cost and resources, the main references include:

Without a baseline, “we are late” is an impression. With one, deviation becomes measurable and discussable.

Effort, duration and cost are not the same

Ten person-days of effort do not automatically equal two weeks of duration: dependencies, parallelism, leave, partial capacity and waiting may lengthen the calendar.

Building a credible schedule

A useful schedule is not a list of desired dates. It connects:

1. deliverables and activities;
2. effort and duration estimates;
3. sequence and dependencies;
4. genuinely available resources;
5. milestones and external constraints;
6. buffers, risks and tolerances.

flowchart LR
  A[Deliverable] --> B[Activities]
  B --> C[Estimates and dependencies]
  C --> D[Available capacity]
  D --> E[Schedule baseline]
  E --> F[Monitoring and forecast]

An unmanaged dependency is a fictitious date. If user acceptance, a purchase or a test environment is needed to proceed, it must be visible in the plan and monitored as a constraint or risk.

Monitoring: physical progress, not consumption alone

Comparing actual hours with budget is necessary but insufficient. Compare them also with genuinely completed value.

A forecast is not an optimistic prediction. It is the best current estimate of final date, final cost and needed capacity, based on available data and already decided actions.

Controlling schedule

When deviation emerges, the PM should not merely colour the report red. They should analyse cause, impact, alternatives and required decision.

The aim is not preserving a date at any cost; it is taking the right trade-off early among date, scope, quality, cost and risk.

Controlling costs

Cost is not just an invoice received. It may include internal effort, consulting, licences, infrastructure, training, purchasing and transition costs.

Useful control considers:

• planned cost or effort to date;
• actual cost or effort;
• genuinely completed work;
• estimate of remaining work;
• forecast at completion;
• impact of known risks, issues and changes.

If a project has spent little because a dependency is blocked, that is not automatically good news: cost may simply be deferred while the date may already be compromised.

Managing resources: capacity, skills and continuity

A resource is not merely a cell to allocate. For each critical activity, consider at least:

Over-allocation is not solved by multiplying percentages. If one person is assigned 60% to two activities in the same period, the plan claims 120% capacity that does not exist.

The Annotatio case: an honest forecast

For Smart Bookings, go-live is planned for 30 June. In mid-June:

• waiting-list development is complete and tested;
• push notifications are 60% complete, with an Android issue open;
• the dashboard has not started because the same person resolved the Android problem;
• the gym representative is available for acceptance testing only from 26 June.

Saying “we are 80% complete” would be misleading. A useful forecast presents:

The PM is not “giving bad news”: they make a decision possible before the date becomes unrecoverable.

Do not confuse these

Three questions to anchor it

1. What are the most likely final date and cost, not the original ones?
2. What is genuinely blocking the critical path?
3. Which trade-off among schedule, scope, cost, quality and risk needs a decision?

Flashcards

Q: What is the difference between effort, duration and cost?
A: Effort is required work; duration is calendar time; cost is the financial value of work and expenses.

Q: Why is a forecast more useful than actuals alone?
A: It indicates the best current estimate of completion, rather than only what has already been spent or done.

Q: When can a baseline change?
A: When a change is assessed and approved according to Change Management and governance.

Exam-style question

An activity estimated at ten person-days is performed by two people at 50%. The PM states it will certainly finish in one week, ignoring a dependency that becomes available only in ten days.

What is the error?

Answer: the PM confuses effort with duration and ignores a critical dependency. Even with theoretical capacity, the activity cannot finish before the constraint is resolved. The forecast must include sequence, dependencies and real resource availability.

Source

The Project Work Plan, estimates, scheduling, schedule control and cost control are covered in the European Commission’s PM² Methodology Guide 3.1.

Next: Business Implementation and transition to operations, to ensure the project does not merely deliver a solution but genuinely enables the intended change and benefits.