AN031_Project Management / Gestión y

Dirección de Proyectos
Animation budget
Animation budget

Objectives

• To understand the objective of cost management in animation

projects

• To differentiate the diverse type of costs

• To understand the different estimating techniques

• To be able to estimate project costs

• To understand how risks influence the project budget

Animation production Budget and costs

Introduction
Planning Process - Estimating

When planning, remember that:

■ If anything can go wrong, it will

■ Nothing is ever as simple as it seems

■ Everything takes longer than you expect

■ Anything adjustable will sooner or later need adjustment

■ Left to themselves, all things go from bad to worse

Animation production Budget and costs

Introduction
Planning Process - Estimating

■ Activity duration estimating

■ Resource estimating

■ Cost estimating

■ Cost budgeting

■ Risk planning

Animation production Budget and costs

 HOW TO KEEP YOUR ANIMATION BUDGET UNDER
CONTROL
➔ Limit the scope of your production and the number of characters
needed. A story that takes place inside one room with one or two
characters will be easier than a setting in a large expansive
environment with many characters. Likewise, don’t go crazy with the
special effects.
➔ Animation is often priced per second. Think carefully about the
length of your projects, because some extra seconds / minutes may
cost lots of money.
➔ A large portion of an animation budget goes toward modeling and
rigging. Instead of creating everything from scratch you can save
time and money by purchasing stock models that have already been
modeled and rigged. You can find decent characters without
spending a lot of money and use them creating an engaging
message.
➔ Keep the design of the characters and location as simple as
possible. The more detail and realism required, the longer it will take
(and it will be more expensive too)
Animation production Budget and costs
 HOW TO KEEP YOUR ANIMATION BUDGET UNDER
CONTROL
➔ Animate elements and portions of your story instead of the whole
thing. Sometimes you can choose to not animate the complete
character but only their expressions.
➔ Don’t expect perfection. One of the biggest exploders of animation
budgets are revisions and changes. If what was created the first
round is close enough, then move on and save yourself the
expense of unnecessary reviews.
➔ Find an experienced production company with less overhead. At a
large studio there are experts for every step of the process. This is
great if money is no object. When trying to save money it is critical
that you have people that are versatile and can do more than one
thing. They might not do everything as well as a specialist, but
they can do a good job at many different tasks saving you money.

Animation production Budget and costs

Project cost management

• Project cost management focuses on the expenses required to

successfully deliver the product or service to the client in the
agreed time and with the agreed scope and quality

• There is a higher budget hierarchy that includes both income and

expenses

• In the context of a project, the focus is on costs that represent all

of the resources required over the duration of the project, e.g.,
human resources, material resources, external services,
indirect costs and contingency and management margins

Animation production Budget and costs

Project cost management

Cost Estimating

Estimate costs is the process of developing an approximation of the

monetary resources needed to complete the project activities

Cost Budgeting

Developing budget is the process of aggregating the estimated costs

of individual activities or work packages to establish a cost baseline

Animation production Budget and costs

How to do an animation budget?

• What should we estimate?

• Activities, work

• Materials

• Salaries and professional fees (time of PM, designers, etc)

• Professional services (subcontracting, consultants)

• Quality efforts (tests, audits)

• Overheads and structural costs

• Other costs related to project (training, equipment)

Animation production Budget and costs

How to do an animation budget?

• The project budget includes all project activities and work

packages:

• Materials and equipment

• Human resources

• Company costs

• Reserves

• Financial costs

Animation production Budget and costs

 How to do an animation budget?

Animation production Budget and costs

 Determine Project budget
Estimating techniques

Top Down

• Initial estimate; very approximate

• Gives initial view on project complexity
• Project information is still limited
• Based on historical information of previous projects and expert judgment

• Quick • Very approximate

• Minimal cost • Prepared with very limited
• Initial establishment of information
expectations

Animation production Budget and costs

Determine Project budget
Estimating techniques

• Benchmarking / Analogous estimating: estimating on the base of

historical information or similar projects.

• Expert judgement.

• Decomposing: decomposing an activity, estimating the subtasks

and aggregating the results as estimating for the activity as an
unit.

• Vendor bid analysis: quotes from specialists or analysis of bids

received for similar projects.

Animation production Budget and costs

Reserves

• When estimating, there is the temptation to cover ourselves by

building up some extra time or cost

• Reserves: allowance of spare capacity, time or money, built-in into

the estimate to cover if something does not go according to plan

• Contingency: to cover known unknowns (risks)

• Management margin: to cover unknowns (% management)

Animation production Budget and costs

Reserves

• Allowing for reserves is good practice; however be aware of the

following issues:

• If your Sponsor knows that you routinely increase your

estimates by an arbitrary amount (commonly 15%-20%) in
all your estimates, he may ask to take it out or even give
you a budget that is 20% less than the available funds

• If your projects come well under budget, clients may be

cynical of the accuracy of your future estimates, adjusting
expectations accordingly

• If everyone in a particular work stream adds arbitrary

amounts of contingency, we can end up with a hugely
overestimated duration and cost project

Animation production Budget and costs

Some real life examples - Studios

$3,000 animation from a large studio

$3,000 for animation is such a leap in price. However, if you are
considering working with a professional studio, especially those based
in US-UK or AU, keep in mind that this should be the minimum
amount. A 60-second 2D animated video could cost from $3,000 to
$50,000. 3D animation is much pricier, as it could cost $10,000 for basic
animation. Most studios don’t put up their price on the websites.
Since everything is tailored, so is the price. After contacting the
studio and telling them your budget, ideas, and style reference, then
they would provide you with a more exactly how much your animation
cost per minute.

Animation production Budget and costs

Some real life examples
Anime

Animation production Budget and costs

Some real life examples
Pixar

Animation production Budget and costs

Some real life examples
Pixar

Animation production Budget and costs

Some real life examples
Pixar

Animation production Budget and costs

 Determine Project budget

• Step 1: Once the needed human and materials resources have

been identified for each activity, estimate the cost for these
resources.
WBS
Stage Task Human resource Effort [hour] Cost [€/hour] Cost [€] Material resource Cost [€]
1. Stage 1 1.1 First task Project Manager 10 60 600 Optical scanner 3500
Hard. Engineer 1 200 50 10000 1 month 3G data 100
Soft. Engineer 1 200 45 9000
1.2 This seems to be the second Project Manager 30 60 1800 Usability consultancy 12000
Soft. Engineer 1 500 45 22500
Soft. Engineer 2 700 40 28000
1.3 A couple more for this stage
1.4 Okay, that's fine
2. Stage 2 2.1 Another first task
2.2 This stage will be shorter
2.3 Enough

Animation production Budget and costs

Determine Project budget

• Step 2: Arrange previous cost estimation per phase and group

different cost types into categories:
Cost
Resource Stage 1 Stage 2 Stage 3 Stage 4 Stage 5
Human resources Project Manager 2.400 € 2.500 € 4.000 € 6.000 € 2.000 €
Hard. Engineer 1 10.000 € 20.000 € 35.000 € 10.000 € 5.000 €
Hard. Engineer 2 - € 15.000 € 20.000 € 10.000 € - €
Soft. Engineer 1 31.500 € 50.000 € 35.000 € 20.000 € 15.000 €
Soft. Engineer 2 28.000 € 30.000 € 30.000 € 10.000 € - €
Subtotal 71.900 € 117.500 € 124.000 € 56.000 € 22.000 €
Mat. & Serv. Tools 3.500 € 15.000 € - € - € - €
Fungible 100 € 500 € 1.500 € 2.000 € 500 €
Travel - € 500 € 2.000 € 500 € - €
Services 12.000 € - € 25.000 € - € - €
Subtotal 15.600 € 16.000 € 28.500 € 2.500 € 500 €
Total 87.500 € 133.500 € 152.500 € 58.500 € 22.500 €

Project direct cost 454.500 €

Animation production Budget and costs

Determine Project budget

• Step 3: Calculate contingency reserve (first you must carry out a

Risk Analysis). Each company usually sets a maximum contingency
allocation margin as a percentage of project costs. Take 20% as an
example for this maximum.
Risks
Risk type Score [1-5] Weighting [%] Partial [%]
Management 5 30% 30%
Technical 3 50% 30%
External 4 20% 16%

Amount of the
maximum contingency
to be allocated: 76%

Minimum contingency 5%
Maximum contingency 20%

Allocated contingency 15%

Animation production Budget and costs

Determine Project budget

• Step 4: Add the contingency reserve to the project direct costs. This
forms the Project Cost Baseline. The cost baseline will be the basis
for measuring performance.

Project direct cost 454.500 €

Contingency margin 15%

Project Cost Baseline 523.600 €

Animation production Budget and costs

Determine Project budget

• Step 5: After adding the contingency reserve to the project direct

costs, the management margin is added afterwards in order to cope
with unidentified risks. This yields to the final project cost estimate.
Each company usually sets management margin as a percentage of
project costs. Take 5% as an example for this margin.

Project direct cost 454.500 €

Contingency margin 15%

Project Cost Baseline 523.600 €

Managemet margin 5%

Project cost 549.800 €

Animation production Budget and costs

Determine Project budget

Cashflow

• Financial planning tool used to

monitor project expenditure

• The PM can identify the critical

periods of the project related to
payments

• The PM can plan periods for

invoicing and payments, so it helps
with the overall procurement
strategy

Animation production Budget and costs

Cost Management

Document all your assumptions. Clearly state the basis

on how you have arrived at the estimate

There is no such thing as Accurate Estimates

Estimate will by definition never be 100% accurate

Animation production Budget and costs

 Wrap up - Cost Management

➔ Project cost management focuses on the expenses required

to successfully deliver the product or service to the client in
the agreed time and with the agreed scope and quality.

➔ Estimate costs is the process of developing an approximation

of the monetary resources needed to complete the project
activities.

➔ Developing budget is the process of aggregating the

estimated costs of individual activities or work packages to
establish a cost baseline.

➔ Cost Management Plan establishes the policies, procedures

and documentation that determine, plan, control and manage
the project budget and any deviations.

Animation production Budget and costs

Wrap up - Cost Management

➔ The project budget includes aggregating all project activities

and work packages: materials and equipment, human
resources, company costs, reserves, financial costs.
➔ Top down estimation is the initial estimate that gives initial
view on project complexity when the project information is
still limited.
➔ Botton up estimation is a more detailed estimate, calculated
based on activities and work packages when the project
information is more detailed.

Animation production Budget and costs

 Wrap up - Cost Management

➔ There are several estimating techniques: expert judgment,

parametric, vendor’s bid analysis, three point estimating, etc.

➔ Reserves are an allowance of spare capacity, time or money,

built-in into the estimate to cover if something goes not
according to plan.
◆ Contingency reserve is to cover known unknowns
◆ Management margin is to cover unknowns.

➔ Risks affect project budget because they determine the

contingency reserve.

Animation production Budget and costs

Some extra information for your current and future
projects
➔ CONVENIO COLECTIVO DE LA INDUSTRIA AUDIOVISUAL (EN ESPAÑA):
➔ AUDIOVISUAL INDUSTRY AGREEMENT (IN SPAIN):
https://tace.es/i-disposiciones-generales/

➔ EQUIPO TÉCNICO AUDIOVISUAL - TABLA SALARIAL:

➔ AUDIOVISUAL TEAM FEE TABLE:
https://tace.es/tablas-salariales-2021/

➔ MODELO COSTE FILM ANIMACIÓN (EN ESPAÑA):

➔ FILM ANIMATION COST MODEL (FOR SPAIN):
https://www.culturaydeporte.gob.es/cultura/areas/cine/informacion-servicios/in/procedimie
ntos-administrativos/presupuesto-coste-pelicula-animacion.html

➔ TARIFAS DOBLAJE Y CONVENIO ACTORES (EN ESPAÑA):

➔ DUBBING FEE TABLE AND ACTORS AGREEMENT (IN SPAIN):
https://www.aisge.es/tarifas
https://www.aisge.es/media/uploads/Tarifas%20Generales%20grabaciones%20audiovisua
les%20AISGE%20202420240222222105.pdf

Animation production Budget and costs