Project Management Institute

A measure of success

Performance-based budgeting (PBB) is a system that has been successfully utilized in the public sector to curb project costs and manage project portfolios. In performance-based budgeting, a project's expected benefits are defined, and then rigorous metrics are used to quantify the delivery of those benefits. This article illustrates several instances where PBB has been used--such as the recent Labour Party initiatives in Britain, New Zealand's Public Finance Act of 1989, and Florida's public school system--and offers guidelines for the application of PBB to the private sector. The successful use of PBB is dependent upon having sound data collection methods, and an effective measurement process.
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