Running head: PROJECT COSTING

Project Costing
CMGT/410

PROJECT COSTING

2
Project Costing

Tylers Cable Company (TCC) has developed an allocation and cost of the
resources needed for the new data system to be delivered on-time and on-budget. This
project report will include the allocation of resources for both labor and materials
needed for the project tasks, including cost estimates. The Gantt Diagram in this report
will show the duration estimates for all tasks and their sequencing needed for this
project. In addition, a summary of the projects facts on the number and type of
resources, task sequencing, how the duration estimates were arrived at, and any
financial implications on the budget or costs will be reported. Another member of this
project team will reveal the development of a baseline plan of this project so that all
future variances are captured.
Allocation of Resources and Cost Estimates
A total budget of $20,408.76 will be needed for the resources and staff needed to
complete the project. The first expense will be for the IT Specialist to make a quality
project. The going rate for an IT Specialist is $20 per hour and $30 per hour for any
overtime. Because the company will use the IT Specialist under a year, this position will
include an hourly rate. If the company were to use the specialist for over a year, it would
prove more beneficial to bring the IT Specialist on salary.
Other expenses will include the VPN system, which will be $268.76 and will allow
the company access to ten licenses. This will allow the company to have licenses as
back up and give stakeholders access to check on the program from home. These
licenses will ensure a secure network for company use only as well. The program itself
will cost $5,000 for the rights to use the web-based program. Technician log-ins will cost

PROJECT COSTING

$30 per technician; the company currently has 50 technicians for a total of $1500. When
training begins for the new system we will need trainers, which will cost $15 per hour
plus $22 for any overtime.
For the installation hardware task, the expenses will include the salary for the IT
Specialist, which will total about $1600, plus the VPN, which will total $268.76. The total
for this task is $1868.76.
For the installation software task, the expenses will include the technicians log-in
cost at $1500, the penguin data expense at $5000, and the rate for the IT Specialist to
setup the program, which will cost about $2240. This task will total $8,740 in expenses.
The testing phase includes an expense for the IT Specialist at $800 and the
salary for the trainers at a total of $600. The implementation will initially begin with an
expense for the IT Specialist at $800 and the trainers salary at $600. Finally, the
company wide implementation will include the IT Specialist salary at $4000 and trainers
salary at $3000; this will ensure the program goes smooth and everyone understands
what is needed to use the new system for the company. The total expenses for the
testing and implementation phases will be around $9,800, bringing the total estimated
project costs to $20,408.76.

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Project Gantt Diagram

The schedule for the project begins with the project team orientation. This is
necessary to give the project team an overview of the processes needed to complete
the system upgrade. There will be an evaluation of the companies current resources.
The installation of hardware and software will follow one another. The initial testing
phase will commence. This will test to see if the new hardware and software upgrades
are compatible. The employee training will be conducted to get the employees the
necessary training to be able to operate the new system. The stakeholders will be given
an overview of the entire process and the projected operation of the new system. TCC

PROJECT COSTING

will have a review of the budget to make sure costs werent overrun. Once all of the
testing is complete the initial implementation will begin. First at the main office and then
the entire company will begin implementation.
Project Plan Baseline
The baseline on the project consists of start and finish dates, time
measurements, and the costs associated with the project. The duration of the project
will be 90 days. The budgeted cost for the project is $20,408.76. The following baseline
is a blueprint for the project:
Budget-$20,408.76

Timeline=90 days

Implement-paperless system, company training

Project Team Orientation- all team members in attendance. Overview of project

and project plan.
o Duration- 3 Days- Begins on August 6th and ends on August 8th.
o Cost- $0

Evaluation of Resources
o Duration- 5 days- Begins on August 9th and ends on August 15th.
o Cost- $0

Installation of Hardware
o Duration- 10 days- Begins on August 16th and ends on August 29th.
o Cost- IT Specialist at $1600, VPN hardware at $268.76, total cost
$1868.76

Installation of Software

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o Duration- 14 days- Begins August 30th and ends September 18th.

o Cost- $1500 for implementing techs log, Penguin Data at $5000, IT
Specialists at $2240, total cost is $8740

Testing
o Duration- 5 days- Begins on August 19th and ends on August 23rd. The
testing will occur within the timeline of the hardware and software
installation.
o Cost- IT Specialists with a total of $800

Employee Training
o Duration- 5 days- Begins on August 19th and ends on August 23rd.
o Cost- total cost is $600

Overview to Stakeholders
o Duration- 2 days- Begins on August 21st and ends on August 22nd.
o Cost- $0

TCC Budget Review

o Duration- 2 days- Begins on August 23rd and ends on August 24th.
o Cost- $0

Implementation-Initial
o Duration- 2 days- Begins on August 23rd and ends on August 24th.
o Cost- $800 for IT Specialists and $600 for Training Sups, total cost $1400

Company Wide Implementation

o Duration- 25 days- Begins on September 25th and ends on October 29th.

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o Cost- IT Specialists at $4000 and Training Sups at $3000, total cost $7000

Conclusion
TCC believes the above estimated cost for this project clearly defines the
allocation and cost estimation of resources needed and a project baseline that will
ensure the new system will be implemented on-time and on-budget. This project
estimation includes the labor and materials TCC will need to complete the project tasks,
the estimated costs for the labor and materials, a Gantt diagram showing the duration
for project tasks, and a project plan baseline. This information will enable the team to
move forward with the project, understand the estimated timeline for tasks involved, and
help develop the cash flow needs.