Determine Technical Budget & Allocate Resources

Determining the technical budget and allocating resources effectively is crucial for the successful development and launch of your MVP. This step involves estimating the costs associated with development, testing, deployment, and maintenance, as well as allocating the necessary resources to ensure the project stays on track. Proper budgeting and resource allocation help in managing financial risks and optimizing the use of available assets.

Why it's Important

Financial Planning: Ensures you have sufficient funds to complete the project.
Risk Management: Identifies potential financial risks and mitigates them.
Resource Optimization: Helps in allocating resources where they are most needed.
Project Viability: Ensures the project can be completed within budget constraints.
Stakeholder Confidence: Builds confidence among stakeholders about the project’s financial feasibility.

How to Implement

Estimate Costs

Calculate the costs for development, testing, deployment, and maintenance.
Include costs for tools, technologies, licenses, hosting, and third-party services

Identify Resources

Identify the human resources needed, including developers, designers, testers, and project managers.
Determine the physical and digital resources required.

Create a Budget Plan

Develop a detailed budget plan that outlines all estimated costs.
Include a contingency fund for unexpected expenses.

Allocate Resources

Assign resources based on the project timeline and critical milestones.
Ensure key roles are filled and responsibilities are clearly defined.

Monitor and Adjust

Continuously monitor expenditures and resource usage.
Adjust allocations as needed to stay within budget and meet project goals.

Available Workshops

Cost Estimation Workshop: Collaborate with the team to estimate all project-related costs.
Resource Identification Workshop: Identify and plan the allocation of human and physical resources.
Budget Planning Workshop: Develop a detailed budget plan, including contingency funds.
Allocation Strategy Workshop: Strategize the allocation of resources based on project needs and timelines.
Monitoring and Adjustment Workshop: Set up processes for ongoing monitoring and adjusting of the budget and resources.

Deliverables

A comprehensive budget plan detailing all costs and allocations.
Clear understanding of resource requirements and allocations.
A contingency fund to cover unexpected costs.
Financial risk mitigation strategies.
Documentation of the budgeting and allocation process.

How to Measure

Budget Adherence: Track actual spending against the budget.
Resource Utilization: Monitor the efficiency of resource use.
Milestone Completion: Assess whether milestones are completed within budget and on time.
Stakeholder Feedback: Gather feedback from stakeholders on budget and resource management.
Financial Health: Evaluate the overall financial health of the project periodically.

Real-World Examples

Slack

Scenario: Created a detailed budget for developing its messaging platform, including costs for development, testing, and cloud services.

Outcome: Managed to launch the product within budget, attracting millions of users and securing additional funding.

Spotify

Scenario: Budgeted for a scalable infrastructure to support its music streaming service, anticipating high user volumes.

Outcome: Successfully scaled to millions of users globally while maintaining budget control.

Trello

Scenario: Allocated resources for developing its project management tool, focusing on essential features and user experience.

Outcome: Efficiently launched the product, which quickly gained traction and was later acquired by Atlassian.

Get It Right

Detailed Estimates: Provide detailed cost estimates for every aspect of the project.
Regular Monitoring: Continuously monitor the budget and resource usage.
Flexibility: Be prepared to reallocate resources as project needs change.
Contingency Planning: Include a contingency fund for unforeseen expenses.
Stakeholder Involvement: Keep stakeholders informed and involved in budget decisions.

Don't Make These Mistakes

Underestimating Costs: Failing to account for all potential expenses.
Over-Allocating Resources: Assigning too many resources too early or to non-critical tasks.
Ignoring Contingency: Not setting aside funds for unexpected costs.
Poor Monitoring: Not regularly tracking budget and resource usage.
Lack of Documentation: Failing to document the budgeting and allocation process for transparency and future reference.

Provided courtesy of Deanne Watt, Chief Product Officer
MiNDPOP Group