Top-down Planning

As a management style, the approach is called top-down management: decisions are made at the top level and travel down as tasks. The counterpart is bottom-up planning, where the team estimates every work package and adds the values up.

How does top-down planning work?

1. Set the frame. The client or management sets the goal, deadline and overall budget.
2. Break it into phases. The project manager divides the project into phases and places a milestone at the end of each.
3. Distribute budget and time. Percentages from comparable projects split the overall budget across the phases.
4. Break down further and assign. Each phase splits into work packages owned by individual teams or people.
5. Report progress back. The teams report status upward, and the project manager compares it with the target.

Example: top-down plan for a trade fair appearance

Management sets 60,000 euros and the trade fair date. The project manager distributes the budget according to last year's shares (example values):

Each team then breaks its phase down into work packages. If the stand builder calculates 38,000 euros bottom-up, 5,000 euros are missing. The project manager then decides within the triple constraint: a smaller stand, more budget or cuts in another phase.

Advantages and disadvantages of the top-down approach

Advantages

• Available fast: A top-down plan takes hours and is enough for a proposal, a project application or a business case.
• Clear direction: All sub-goals derive from one overall goal.
• Budget control from day one: Each phase has a fixed ceiling.
• Little coordination: Few people decide, and the plan stays consistent.

Disadvantages

• Rough values: Percentages from comparable projects rarely fit the new project exactly.
• Missing expertise: People who do not do the work themselves tend to underestimate the detailed effort.
• Low buy-in: Teams find it harder to stick to targets they had no say in.
• Late corrections: Gaps often only show up during execution, where changes cost the most (see cost of change curve).

Top-down or bottom-up?

Use top-down in early phases, as long as only the goal and budget are fixed. Once the work breakdown structure is in place, check the target with a bottom-up estimate. A side-by-side table of both approaches is under bottom-up planning.

Top-down as a management style

In top-down management, leadership decides, and the lower levels execute and report back. The style suits projects with clear requirements, fixed deadlines and a high need for coordination between many teams, such as regulated projects. Where a project depends on the ideas and expertise of the team, it slows things down. The entry on leadership styles compares other styles.

How do you plan top-down in Merlin Project?

In Merlin Project, you break the plan down from the top:

1. Create phases and milestones: Create the phases as activities and mark phase ends with Insert › Milestone (Alt+Cmd+M).
2. Break down the phases: Add activities under each phase with Insert › Child (Alt+Cmd+G). The phase turns into a group and calculates its duration and time span from its activities.
3. Set effort as a share: In the Inspector on the Plan tab, enter a percentage such as 25% in the Work field. Merlin Project reads it as a share of the corresponding given value of the parent activity.
4. Distribute the budget: Enter the overall budget on the top group under Approved on the Finance tab, Budget tab. On the phases, a percentage is enough: it refers to the approved budget of the parent group. Results: Undistributed shows the remainder you can still allocate.