Show Me the Numbers
The budget conversation nobody wants
Month 1 Status Report — XR Platform
Pulse Works × Kurosawa Digital — Confidential
Overall Status
| Area | Status | Notes |
|---|---|---|
| Scope | GREEN | Scope baseline approved; no changes pending |
| Schedule | AMBER | Rendering engine start delayed 5 days due to resource contention on critical path |
| Cost | AMBER | Budget draft under review; vendor quotes 12% above initial cost estimate |
Key Metrics
- Planned spend to date: ¥6.2M
- Actual spend to date: ¥6.8M
- Contingency reserve: ¥4.0M allocated (of ¥48M total budget)
- Management reserve: ¥2.4M held by Director Kudo
Issues & Risks
- Vendor hardware pricing volatile — final quotes pending
- Tetsu at 140% allocation across three projects; schedule float on non-critical tasks absorbing some impact
Next Steps
- Present cost baseline to Director Kudo for approval by Week 6
- Finalize vendor contracts to lock pricing
- Escalate resource allocation conflict to management
Hina (陽菜) "Ren, the actual spend is already higher than planned. Should we tell Director Kudo now, or wait until the full cost estimate is ready?"
Ren (蓮) He hesitated. The honest number would make Director Kudo uncomfortable. A comfortable number would make the project a lie.
Budget
Definition The approved spending plan for the project.
Components Activity cost estimates; contingency reserve; management reserve; time-phased spending plan.
Related cost estimate, cost baseline, scope baseline
Example The XR platform's ¥48M budget includes all development costs, vendor fees, and reserves — it's the ceiling Director Kudo approved.
Cost Estimate
Definition An approximation of the monetary resources needed for project activities.
Components Labor costs; material costs; equipment costs; vendor quotes; estimation method (analogous, parametric, bottom-up).
Related budget, WBS, activity
Example Hina compiled cost estimates from vendor quotes and team hourly rates — the total came in 12% higher than Ren's initial guess.
Contingency Reserve
Definition Funds set aside to address identified risks.
Components Risk-based calculation; owned by project manager; drawn against specific risk events; included in cost baseline.
Related management reserve, budget, cost estimate
Example The ¥4.0M contingency reserve covers known risks like vendor price increases — Ren can use it without Director Kudo's approval.
Management Reserve
Definition Funds reserved for unplanned changes to project scope and cost.
Components Executive-controlled; covers unknown unknowns; not part of cost baseline; requires sponsor approval to use.
Related contingency reserve, budget, sponsor
Example The ¥2.4M management reserve is held by Director Kudo — Ren must make a formal case before accessing it for unforeseen scope changes.
Cost Baseline
Definition The approved version of the time-phased project budget.
Components Authorized spending by period; excludes management reserve; used to measure cost performance; can only be changed through formal change control.
Related budget, scope baseline, contingency reserve
Example Once Director Kudo approves the cost baseline, any spending above the approved monthly amounts will show up as a variance — visible proof the project is over budget.