This article will discuss project planning processes and the third party budgeting, forecasting, and modelling tools to upgrade your Microsoft Dynamics AX project management experience.

It’s common knowledge that financial planning is such an important element of running a business – and it always has been.  The caliber of your planning processes can sometimes make or break your company, especially in the context of the recession back in 2008.  Company-wide budgeting and forecasting is usually routine and almost always involves multiple players coming together with actual transactional figures and projections for the period you are planning.  But sometimes an organization or a project manager has to plan for a particular task or project.  If you count yourself amongst the consultant, project manager, or other professionals who are tracking and billing hours, overseeing multiple projects, or crafting a bid for a job, project budgeting is something you know inside and out in your career.

I recently have spoken to a few different consultants regarding their various projects.  One was a management consultant who is currently charged with helping an organization upgrade their data access, management, and analyses for richer, stronger decision-making.  He is just starting the project, reviewing the current analytics and trying to identify specific needs for Business Intelligence (BI) solutions – and he is feeling confident about securing the right technology to help this company streamline their processes and achieve their specific data goals.  As project management continues to grow in prevalence, this professional’s experience and our interaction with the topic led to an educational discussion about how his company budgets and bids for projects.  He felt as though most people think that project budgeting is a bunch of guesses and rounded-up figures, but with the right planning solution, it can and should be pretty precise.
Dynamics AX does offer you the ability to budget for projects within the program, but like most accounting systems, you are restricted when you have to produce business user friendly data entry screens to produce or update a project’s budget or forecast, so plenty of companies typically do this manually in Excel.
To compare, regular budgeting is structured around a particular time period, like a fiscal year, while project budgeting is task-oriented.  We’ll use our management consultant pal, Mike, as an example, who is going to analyze the organization’s current BI tools, evaluate their performance management tasks, seek out the perfect software, and implement the solution, for up to 12 months’ time.  Mike’s job with this company is good for showing project budgeting in action, but it also offers a great picture of modern BI implementations.  This article will discuss project budgeting in theory, using Mike’s role as Exhibit A, and I will point you in the right direction of today’s features and functionalities that you should be seeking in modern planning tools.
We’ll call the organization Mike is working with “Corporation, Inc.”  Corporation, Inc. is hoping to overhaul their analytics, specifically hoping to implement modern BI technology.  They are still relying on FRx, even though Microsoft has retired the report writer and any support for the product.  Corp, Inc. is a loyal fan of Dynamics AX, but the native project budgeting functionality doesn’t adequately meet their needs.  Right now, they are designing homegrown budgets in Excel, which their organization has outgrown.  A partner recommended Mike when they were discussing the need for a consultant to affordably overhaul their BI processes, so the project budgeting started.
You will begin the project budgeting process by identifying your project costs.  Project costs are fixed costs and/or billable hours, with most projects involving both.  Mike can design a plan and perhaps work together with Corp, Inc. on the billable hours, but he could also include costs that organically come up during the project, like technology, development, office supplies, training, travel, and so on.  These are usually called soft costs and could be allocated to subcategories, as in direct and indirect costs.  Other categories of cost can be moving and storage, contract work, furniture or equipment, and even budgeting for another amount as a contingency that has to do with the risk associated with projects that can be difficult to plan for precisely.  Every budget involves risk.
In the context of financial planning, risk refers to the variables that come with every project, including money, time, and/or resources.  Depending on the evaluation Mike makes about Corp, Inc.’s BI needs, he might have to log more billable hours to put together a solution for their obstacles.  If bureaucracy becomes a hurdle for approving Mike’s suggestions for BI tools, risk might come in the form of the time necessary to complete the project.  Regarding the acquisition and implementation of new technology, Corp, Inc. has to budget for Mike’s compensation, but they also have to decide where to add a line item for the solution they choose to implement.
Corp, Inc. can choose to allocate the cost of the solution to the project budget – or they can plan for the direct and indirect costs of Mike, assigning the software investment to their own fiscal year budget.  Mike mentioned that Corp, Inc. isn’t very aware of the current price tags of BI software, but they have built some flexibility into their budget for how much they can invest.  Because BI software pricing involves maintenance, support, and/or training as annual costs, Corp, Inc. could wrap this investment into their annual financial plan – or insert the initial cost of acquisition into the project budget, but allocate the yearly fees into the fiscal plan.  The criteria for Mike meeting the company’s BI demands will determine the length of the search process, which could be long, with the costs varying drastically.
Much like how most financial reporting tools can’t produce sub-ledger reports, plenty of budgeting tools don’t come with built-in Project Budgeting functionality because most companies only budget for a fixed period of time.  However, today’s business world does consist of more consultants, project managers, and freelancers than ever – and they depend on project budgeting.  In addition, there are whole industries that are structured around projects, like defense contractors, engineering and construction corporations, etc.  You don’t need to contract a management consultant, like Mike, to overhaul your BI analytics.  You can do your own research by pinpointing today’s perfect solution for assisting you in achieving your goals.  Solver, Inc. is happy to answer questions and generally review BI360’s easy-to-use Excel, web, and mobile BI tools with both real-time or data warehouse integrated analysis, comprehensive budgeting and collaboration as a way to accelerate company performance management for Microsoft Dynamics AX users.