Académique Documents
Professionnel Documents
Culture Documents
Presented By:
Course Outline
1. 2. 3. 4. 5. 6. Project Management Framework Project Initiation Project Planning - Scope Definition Project Planning - Schedule Development Project Planning - Risk Management Project Planning - Budgeting
Knowledge 2008
Section Six
Project Planning Budgeting
Knowledge 2008
Knowledge 2008
Knowledge 2008
Types of Cost
Direct costs
1. 2. 3. Fixed costs Variable costs Other project-related costs
Indirect costs
General & Admin (G&A) Marketing & Sales (M&S) Research and Development (R&D)
Knowledge 2008
Direct Costs
1. Fixed Costs (Task independent)
Initial Costs Project office setup costs Project insurance Project financing Costs incurred across the whole project duration PM & all fixed resources Depreciation of fixed assets Rentals Allocated project contingency/risk reserve
Knowledge 2008 Principles of Project Management 7
Direct Costs
2. Variable costs (Task dependant)
Manpower
Own resources:
Use Fully loaded rates to accommodate other costs needed/utilized by your team: Salaries + benefits + computer + office + training + company car +
Outsourced labor:
Extra costs for utilization of resources computer + office space + training
Knowledge 2008 Principles of Project Management 8
Direct Costs
2. Variable Costs (continued)
Subcontractors Turn-key services (might include equipment/material supplies) Materials Equipment sold in the project and constitute a part of the final product/deliverable Turn-key Equipment Supplies Material consumed in the project Machines Depreciation of temporarily used Company assets Rentals of tools used upon need
Knowledge 2008 Principles of Project Management 9
Direct Costs
3. Other project-related costs
Warehousing Customs and custom clearance Some task-specific insurances Transportation
Knowledge 2008
10
Indirect costs
General & Admin (G&A)
HR, CFO, Supply Chain, Administration
Knowledge 2008
11
Process Orientation
Planning
7.1 Cost Estimating 7.2 Cost Budgeting
Controlling
7.3 Cost Control
Knowledge 2008
12
Cost Estimating
Process of developing an approximation (or estimate) of the cost of the resources needed to complete each the schedule activity.
Difference between cost estimating and pricing:
Pricing: Assessing how much the organization will charge for the
product or service
Knowledge 2008
13
Cost Estimating
Inputs
1. Enterprise environmental factors 2.Organizational Process Assets 3.Project Scope Statement 4.WBS 5.WBS Dictionary 6.Project Management Plan Schedule management plan Staffing management plan Risk register
Principles of Project Management 14
Tools &Techniques
1. Analogous Estimating 2. Determine Resource Cost Rate 3. Bottom-up Estimating 4. Parametric Estimating 5. Project Management Software 6. Vendor bid analysis 7. Reserve analysis 8. Cost of Quality
Outputs
2. Activity Cost estimates Supporting detail 3. Requested Changes 4. Cost management plan (updates)
Knowledge 2008
2.
Enterprise environmental factors Marketplace conditions Commercial database Organizational Process Assets Cost estimating policies Cost estimating templates Historical information Project files Project team knowledge Lessons learned
Principles of Project Management 15
Knowledge 2008
2. Bottom-up estimating
Estimating the cost of individual work items and then rolling up the costs to arrive at a project total
3. Parametric estimating
Using project characteristics (or parameters) in a mathematical model to predict costs (e.g., price per square foot)
Knowledge 2008 Principles of Project Management 16
18
Cost Budgeting
Aggregating individual the estimated cost or of the work schedule activities
Knowledge 2008
19
Cost Budgeting
Inputs
1. Project scope statement 2. WBS 3. WBS dictionary
4. Activity cost estimates
Tools &Techniques
1. Cost aggregation 2. Reserve analysis 3. Parametric estimating 4. Funding limited reconciliation
Outputs
1. Cost baseline 2. Project funding requirements
3. Cost management plan (updates) 4. Requested changes
5. Activity cost estimates supporting details 6. Project schedule 7. Resource calendars 8. Contract 9. Cost management plan
Knowledge 2008
20
Cost baseline
Time phased budget that will be used as a basis against which to measure, monitor and control the overall cost performance on the project
Knowledge 2008
21
Thank You
Knowledge 2008
22