Project Toolkit

Planning

Resource & Cost Modelling

Resource & Cost Modelling

Planning resources, delivery and interdependencies with cost forecasting.

Resource and Cost Modelling

A resource and cost model forecasts the total cost of resources and materials for a project, along with when those costs will be incurred.

Purpose

Resource and cost modelling enables:

  • Accurate budget forecasting
  • Resource capacity planning
  • Cash flow prediction
  • Variance tracking
  • Informed decision-making

Model Components

Component Description
Resources People needed (roles, skills)
Rates Cost per day/hour
Allocation Days/hours per period
Timeline When resources are needed
Non-labour costs Hardware, software, services
Actuals What was actually spent

Building the Model

flowchart LR A[List
Resources] --> B[Add
Rates] B --> C[Allocate
Time] C --> D[Calculate
Costs] D --> E[Profile
Spending] classDef blue fill:#108BB9,stroke:none,color:#fff class A,B,C,D,E blue

Resource Planning Steps

1. Identify Resource Requirements

| Question | Purpose | |———-|———| | What roles are needed? | Define team structure | | What skills are required? | Match skills to tasks | | How many of each? | Determine quantities | | When are they needed? | Plan timing |

2. Assign Day Rates

Resource Type Considerations
Internal staff Salary cost + overheads
Contractors Market day rates
Consultants Specialist rates
Offshore Location-adjusted rates

3. Allocate to Timeline

Spread resource effort across the project timeline:

  • Consider ramp-up and ramp-down
  • Account for holidays and leave
  • Plan for realistic utilisation (not 100%)
  • Align with project milestones

Example Model Structure

Resource Role Rate Jan Feb Mar Apr Total
PM Project Manager £600 20 20 20 20 £48,000
BA1 Business Analyst £500 15 20 10 0 £22,500
Dev1 Developer £550 5 20 20 10 £30,250
            Total £100,750

Non-Labour Costs

Don’t forget to include:

Category Examples
Hardware Servers, devices, equipment
Software Licences, subscriptions
Services Hosting, support, training
Travel Site visits, meetings
Facilities Office space, utilities
Contingency Risk allowance

Tracking Actuals

Compare planned vs actual spending:

Metric Description
Planned Budgeted cost for period
Actual What was actually spent
Variance Difference (+ = underspend)
% Variance Variance as percentage

Example Variance Tracking

Month Planned Actual Variance
Jan £25,000 £23,500 +£1,500
Feb £30,000 £32,000 -£2,000
Mar £28,000 £28,500 -£500

Cash Flow Profile

Model when costs will be incurred:

  • Front-loaded (heavy early spend)
  • Back-loaded (heavy late spend)
  • Even (spread throughout)
  • Stepped (aligned to phases)

Model Maintenance

Activity Frequency
Update actuals Weekly
Review forecast Fortnightly
Rebaseline At stage gates
Variance analysis Monthly

Common Pitfalls

Pitfall Mitigation
Underestimating rates Use current market data
100% utilisation Plan for realistic capacity
Forgetting ramp-up Include learning curve
Missing cost categories Use checklist
Static model Update regularly

Modelling Checklist

  • All resource roles identified?
  • Day rates confirmed?
  • Timeline allocation complete?
  • Non-labour costs included?
  • Contingency added?
  • Cash flow profiled?
  • Actuals tracking set up?
  • Review schedule established?
Last updated: 13 January 2026
Themes

Resource management

Cost management

Financial

Planning