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Akram Al-Najj ar, PMP
Proj ect Management Consult ant
PMP
Prepara t i on T ra in ing
Your k ey in Successfu l Pro j ec tManagemen t
Akram Al-Najjar, PMP.Project Management Consultant
[email protected]+20105394312
Source: pmbok guide 2004 Slide 2
Chapt er 7
Pr o j ec t Cost
Managemen t
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Akram Al-Najjar, PMP.Project Management Consultant
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Source: pmbok guide 2004 Slide 3
AGENDA
What is Cost Management?
Cost Management Processes
Some terms to be familiar with!
How does the PMBoK Guide describe
Cost Management?
Discussion
Akram Al-Najjar, PMP.Project Management Consultant
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Source: pmbok guide 2004 Slide 4
Pro j ect Cos t Managem ent
Cost Est im at i ngCos t Budge t in g
Cost Cont ro l
Processes involved in planning, estimating,
budgeting, and controlling costs so that the project
can be completed within the approved budget.
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Akram Al-Najjar, PMP.Project Management Consultant
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Source: pmbok guide 2004 Slide 5
Gantt Chart
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Source: pmbok guide 2004 Slide 6
Planned Value (PV)
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Akram Al-Najjar, PMP.Project Management Consultant
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Source: pmbok guide 2004 Slide 7
Planned Value (PV)
Previously (and still in many places) called
Budgeted Costs for Work Scheduled (BCWS).
A monetary representation of how much work
was scheduled to be done at a point in time.
Example: After 4 months, we are scheduled to
complete Activity 1 and 75% of Activity 2
which are budgeted for a total of $32,000. The
total project budget is $100,000. The PlannedValue at 4 months is $32,000.
Akram Al-Najjar, PMP.Project Management Consultant
[email protected]+20105394312
Source: pmbok guide 2004 Slide 8
Work Plan Status
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Akram Al-Najjar, PMP.Project Management Consultant
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Source: pmbok guide 2004 Slide 9
PV and EV
Akram Al-Najjar, PMP.Project Management Consultant
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Source: pmbok guide 2004 Slide 10
Earned Value (EV)
Previously (and still in many places) calledBudgeted Costs for Work Performed (BCWP).
A monetary representation of how much workhas been completed, using the baseline cost forthat work, at a point in time.
Example: After 4 months, we have completedActivity 1 and 50% of activity 2 . The budgetedcost for this work completed was $24,000. Thetotal project budget is $100,000. The EarnedValue at 4 months is $24,000.
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Akram Al-Najjar, PMP.Project Management Consultant
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Source: pmbok guide 2004 Slide 11
PV , EV and AC
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Source: pmbok guide 2004 Slide 12
PV , EV and AC
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Akram Al-Najjar, PMP.Project Management Consultant
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Source: pmbok guide 2004 Slide 13
Actual Costs (AC)
Previously (and still in many places) calledActual Costs for Work Performed (ACWP).
The monetary representation of the costsincurred at a point in time, regardless of howmuch work has been done.
Example: After 4 months, we have completedActivity 1 and 50% of activity 2. The projectcosts at this point in time are $29,000. The total
project budget is $100,000. The Actual Cost at 4months is $29,000.
Akram Al-Najjar, PMP.Project Management Consultant
[email protected]+20105394312
Source: pmbok guide 2004 Slide 14
Schedule Variance (SV)
New:
SV = EV PV
= $24,000 - $32,000
= ($8,000)
Old:
SV = BCWP - BCWS
The project has
delivered $8,000
less work at this
point in time than
was planned. This
project is behind
schedule. This is a
great way to depictahead or behind on
schedule, even
though it is in
monetary terms!!!
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Akram Al-Najjar, PMP.Project Management Consultant
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Source: pmbok guide 2004 Slide 15
Cost Variance (CV)
New:
CV = EV AC
= $24,000 - $29,000
= ($5,000)
Old:
CV = BCWP - ACWP
The project has
cost $5,000 more
to deliver the work
done so far than
was planned. This
project is over
budget.
Akram Al-Najjar, PMP.Project Management Consultant
[email protected]+20105394312
Source: pmbok guide 2004 Slide 16
Schedule Performance Index (SPI)
New:
SPI = EV / PV
= $24,000 / $32,000
= 0.75
Old:
SPI = BCWP / BCWS
The project is
delivering work
slower than
planned. The work
is being done at
75% of the
expected rate.
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Akram Al-Najjar, PMP.Project Management Consultant
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Source: pmbok guide 2004 Slide 17
Cost Performance Index (CPI)
New:
CPI = EV / AC
= $24,000 / $29,000
= 0.83
Old:
CPI = BCWP / ACWP
The project is
spending money
faster than
planned. Only 83%
of work is being
delivered for the
amount of money
being spent.
Akram Al-Najjar, PMP.Project Management Consultant
[email protected]+20105394312
Source: pmbok guide 2004 Slide 18
Case 1
PV = $ 1,860
EV = $ 1,860
AC = $ 1,860
This is the idealsituation, whereeverything goes
according to plan.
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Akram Al-Najjar, PMP.Project Management Consultant
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Source: pmbok guide 2004 Slide 19
Case 2
PV = $ 1,900
AC = $ 1,700
In this Case, withoutEarned Value
measurements, itappears were in goodshape. Expendituresare less than planned.
Spending Variance =- $ 200
Akram Al-Najjar, PMP.Project Management Consultant
[email protected]+20105394312
Source: pmbok guide 2004 Slide 20
Case 2
PV = $ 1,900
EV = $ 1,500
AC = $ 1,700
But with EV measurements,we see...$400 worth of workis behind schedule in beingcompleted; i.e., we are 21percent behind where we
planned to be.
SV = EV PV =- $ 400SV % = SV / PV x 100 =- 21 %
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Akram Al-Najjar, PMP.Project Management Consultant
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Source: pmbok guide 2004 Slide 21
Case 2
PV = $ 1,900
EV = $ 1,500
AC = $ 1,700
In addition, we can see...Actuals exceed Value
Earned (EV), i.e., $1,500worth of work wasaccomplished but it cost
$1,700 to do so. We have a$200 cost overrun (i.e., 13%
over budget) .
CV = EV AC =- $ 200
CV % = CV / EV x 100 =- 13 %
Akram Al-Najjar, PMP.Project Management Consultant
[email protected]+20105394312
Source: pmbok guide 2004 Slide 22
Case 2
PV = $ 1,900
EV = $ 1,500
AC = $ 1,700
This means only 79 cents worthof work was done for each $1.00
worth of work planned to bedone.
And, only 88 cents worth ofwork was actually done for each
$1.00 spent
SPI = EV / PV = $ 0.79
CPI = EV / AC = $ 0.88
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Akram Al-Najjar, PMP.Project Management Consultant
[email protected]+20105394312
Source: pmbok guide 2004 Slide 23
Case 2
PV = $ 1,900
EV = $ 1,500
AC = $ 1,700
This is the worst kind of
scenario, where allperformance indicatorsare negative.
SV =- $ 400; SPI = 0.79
CV =
-
$ 200; CPI = 0.88
Akram Al-Najjar, PMP.Project Management Consultant
[email protected]+20105394312
Source: pmbok guide 2004 Slide 24
PV = $ 2,600
EV = $ 2,400
AC = $ 2,200
In this case there isbad news and good
news.
Case 3
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Akram Al-Najjar, PMP.Project Management Consultant
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Source: pmbok guide 2004 Slide 25
PV = $ 2,600
EV = $ 2,400
AC = $ 2,200
The bad news is that ourwork efficiency is a bit
low; were getting only 92cents of work done on the
dollar. As a result, weare behind schedule.
SPI = 0.92
SV =- $ 200; SV % =- 8 %
Case 3
Akram Al-Najjar, PMP.Project Management Consultant
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Source: pmbok guide 2004 Slide 26
PV = $ 2,600
EV = $ 2,400
AC = $ 2,200
The good news is thatwere under-running ourbudget. Were getting$1.09 worth of workdone for each $1.00
were spending.
CV = + $ 200; CV % = + 8 %CPI = 1.09
Case 3
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Akram Al-Najjar, PMP.Project Management Consultant
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Source: pmbok guide 2004 Slide 27
Budget At Completion (BAC)
This is the baseline cost of the total project.
How much we planned to spend by the time we
finished.
Example: After 4 months, we have completed
Activity 1 and 50% of Activity 2 The project
costs at this point in time are $29,000. The total
project budget is $100,000. The Budget At
Completion is $100,000.
Akram Al-Najjar, PMP.Project Management Consultant
[email protected]+20105394312
Source: pmbok guide 2004 Slide 28
Estimate At Completion (EAC)
Based on where we are now, how much will it
cost when the project is done?
The answer depends on whether your past
performance is a good indicator of expected
future performance more
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Akram Al-Najjar, PMP.Project Management Consultant
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Source: pmbok guide 2004 Slide 29
Estimate At Completion (EAC)
If we know that we can finish the rest of the
work as it was originally planned
Use actual to-date plus budgeted amount for the
rest of the work
EAC = AC + BAC EV
= $29,000 + $100,000 - $24,000= $105,000
(1st of 3 methods)
Akram Al-Najjar, PMP.Project Management Consultant
[email protected]+20105394312
Source: pmbok guide 2004 Slide 30
Estimate At Completion (EAC)
If the original estimates were flawed,we should build new estimates for allthe remaining work
ETC is the Estimate to Complete theremaining work.
EAC = AC + ETC= $29,000 + $120,000= $1,49,000
Assume this
was the
total ETC
from a
completely
rebuilt
estimate
(2nd of 3 methods)
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Akram Al-Najjar, PMP.Project Management Consultant
[email protected]+20105394312
Source: pmbok guide 2004 Slide 31
Estimate At Completion (EAC)
If we assume that past performance is agood indicator of future performance
Use actual to-date plus budgeted amount forthe rest of the work, modified by aperformance factor, such as CPI
EAC = BAC/CPI
= $100,000/0.83
= $120,481 (rounded off)
(3rd of 3 methods)
Akram Al-Najjar, PMP.Project Management Consultant
[email protected]+20105394312
Source: pmbok guide 2004 Slide 32
EVM Performance Measures
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Akram Al-Najjar, PMP.Project Management Consultant
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Source: pmbok guide 2004 Slide 33
EVM and Basic PM Questions
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Source: pmbok guide 2004 Slide 34
Present Value
Budgeting technique that debates the futurevalue of money based on inflation, etc.
PV = FV
(1 + r)t
FV = amount of money t years from nowr = interest rate (also called discount rate)
t = time period
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Akram Al-Najjar, PMP.Project Management Consultant
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Source: pmbok guide 2004 Slide 35
Present Value
Year FV PV
0 $50,000 $50,000
1 $35,000 $31,819
2 $15,000 $12,397
Assume a 10% interest (or discount) rate
PV (Year 1) = FV / (1 + r)t
=$35,000/(1 + 0.1)1= $31,819
Akram Al-Najjar, PMP.Project Management Consultant
[email protected]+20105394312
Source: pmbok guide 2004 Slide 36
(NPV) Net Present value
This Means the total benefits (income or revenue) less the cost. To
calculate NPV you need to calculate the present value of each of
the income and revenue figures then add up the present values.
291353Total
002253003
00831002
9110045501
200200000
Present Value at
10% interest rateCosts
Present Value at
10% interest rate
Income or
revenue
Time
Period
NPV =353-291=62
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Akram Al-Najjar, PMP.Project Management Consultant
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Source: pmbok guide 2004 Slide 37
Payback Period
The exact length of time needed to recover an initial
investment as calculated from cash inflows.
Month Costs Total Cost Benefits Total Benefits
1 $5000 $5000 $0 $0
2 $5000 $10000 $0 $0
3 $8000 $18000 $0 $0
4 $5000 $23000 $5000 $5000
5 $2000 $25000 $10000 $15000
6 $0 $25000 $10000 $25000
7 $0 $25000 $10000 $35000
PAYBACK PERIOD is 6 MONTHS
Akram Al-Najjar, PMP.Project Management Consultant
[email protected]+20105394312
Source: pmbok guide 2004 Slide 38
Internal Rate Of Return (IRR)
The interest (discount) rate where the present
value of the benefits exactly equals the costs.
The higher the rate, the better the project.
An IRR of .15 means that you expect theproject to return an average of 15% on your
investment over a given time period (usually a
number of years).
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Akram Al-Najjar, PMP.Project Management Consultant
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Source: pmbok guide 2004 Slide 39
Benefit Cost Ratio (BCR)
Compares the cost to the benefits of different projects. A
BCR of > 1 means the benefits are grater than the costs. A BCR
of < 1 means the costs are grater than the benefits. A BCR =1
means the costs and benefits are the same.
If the BCR of project A is 2.3 and BCR of project B is 1.7
which project would you select?
The answer is A. the project with the higher BCR
Akram Al-Najjar, PMP.Project Management Consultant
[email protected]+20105394312
Source: pmbok guide 2004 Slide 40
Exercise Accounting Standards
Net p resen t V
I RR
Payback Per iod
Benef i t Cost Rat io
$95 . 00
1 3 %
1 6 M o n t h
2 . 79
Pr o j ect A Pr o j ect B
$75 . 00
17 %
2 1 M o n t h
1 .3
Wh i ch you P ick?
B
A
A
A
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Akram Al-Najjar, PMP.Project Management Consultant
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Source: pmbok guide 2004 Slide 41
Types Of Costs
Di rect Cos t s - Cos t t ha t a re d i rect l y a t t r i bu t ab l e t o t he w o rk on p ro j ec t . Exam p les a re t eam t r ave l , t eam w ages,recogn i t i on and cost o f m a t e r i a l used on t he p r o j ec t
I n d i r e ct c o s t s Ov e r h e ad i t e m s o r c os t s i n cu r r e d f o r t h e bene f i t o f m o re t han on e p ro j ec t . Exam p les inc l ude t axes ,f r i nge bene f i t s , and j an i t o r i a l se rv i ces .
Akram Al-Najjar, PMP.Project Management Consultant
[email protected]+20105394312
Source: pmbok guide 2004 Slide 42
DEPRECIATION
ST RAI GHT LI NE DEPRECI ATI ON : t he same amoun t o f dep rec ia t i on i s t aken each yea r , A US $ 1 , 000 i t em w i t h a t en yea r use f u l l i f e and no sa l vage va l ue (how m uch i t emi s wo r t h a t t h e end o f i t s l if e ) w ou ld be dep reci a t ed a t US$100 pe r yea r .
ACCELERATED DEPRECI ATION you on ly need t o k now : T here a re t w o f o rm s o f acce le ra t ed dep reci a t i on Doub le Dec l in i ng Ba lance and Sum o f t he Yea rs D ig i t s .T hey dep rec i a t e f as t e r t h an s t ra i gh t l i ne .Y ou d o n o t h a v e t o k n o w w h a t t h e s e t w o f o r m s m e a n s o r do any ca lcu la t io ns .
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Akram Al-Najjar, PMP.Project Management Consultant
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Source: pmbok guide 2004 Slide 43
LI FE CYCLE COSTI NG : Means t ha t th e cost o f opera t ion and ma in t enance phase t o be cons i de r and manage w i t h t he p ro j ec t cost
PROJECT OPERATIONS ANDMAINTENANCE PHASE
costs costs
LI FE CYCLE COSTI NG
Akram Al-Najjar, PMP.Project Management Consultant
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Source: pmbok guide 2004 Slide 44
PMBOK Chapt er 7
There are 3 major processes:
1. Cost Estimating
2. Cost Budgeting
3. Cost Control
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Akram Al-Najjar, PMP.Project Management Consultant
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Source: pmbok guide 2004 Slide 45
Cost Managem ent
Planning
7.3
Cost
Budgeting
7.4
Cost
Control
Controlling
7.2
Cost
Estimating
Akram Al-Najjar, PMP.Project Management Consultant
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Source: pmbok guide 2004 Slide 46
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Akram Al-Najjar, PMP.Project Management Consultant
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Source: pmbok guide 2004 Slide 47
Cost Est im at i ng
Difference between cost estimating andpricing: Cost es t im a t ing : Assessing how much it will cost the
organization to provide the product or service
Pr ic ing: Assessing how much the organization willcharge for the product or service
Process of developing an approximation (or estimate)
for the cost of the resources necessary to complete
the project activities
Akram Al-Najjar, PMP.Project Management Consultant
[email protected]+20105394312
Source: pmbok guide 2004 Slide 48
Cost Est im at i ng
Inputs Enterprise Environmental Factors
Organizational Process Assets Project Scope Statement
Work Breakdown Structure
WBS Dictionary
Project Management Plan
Schedule management plan.
Staffing management plan.
Risk register.
Tools & Techniques Analogous estimating
Determine Resource Cost Rates
Bottom-up estimating
Parametric estimating
Project Management Software
Vendor Bid Analysis
Reserve Analysis
Cost of Quality
Outputs Activity Cost estimates
Supporting detail
Requested Changes
Cost management plan
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Akram Al-Najjar, PMP.Project Management Consultant
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Source: pmbok guide 2004 Slide 49
I n p u t s
Ente r p r i se Env i ron m enta l Facto rs , considers:
Marke tp lace cond i t i ons.
Com m erc ia l da tabases.
Organizat iona l Process Assets
Cost es t im a t ing po l i c ies .
Cost est im a t ing tem p la tes .
H is to r i ca l i n fo rmat ion .
Pro jec t f i l es.
Pro j e c t t e a m k n o w l e d g e.Lessons learned .
Akram Al-Najjar, PMP.Project Management Consultant
[email protected]+20105394312
Source: pmbok guide 2004 Slide 50
I n p u t s ( co n t .)
Pro jec t Scope Sta tem ent
descr ibes t he bus iness need , j us t i f i ca t ion ,re q u i re me n ts , a n d cu r re n t b o u n d a r i e s f o r t h epro jec t .
Wo rk B re a kd o wn St ru c tu r e
WBS prov ides the re la t ionsh ip among a l l theco mp o n e n ts o f t h e p ro j e c t a n d t h e p ro j e c t
de l i ve rab les WBS Dict ionar y
prov ide an iden t i f i cat ion o f t he de l i ve rab lesand a descr ip t ion o f the w ork in each WBScompon en t requ i r ed to p roduce eachde l i ve rab le .
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Akram Al-Najjar, PMP.Project Management Consultant
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Source: pmbok guide 2004 Slide 51
I n p u t s ( co n t .)
Pro j ec t Managemen t P lan
Schedu l e managemen t p l an : The t ype and qu an t i t y o fresou rces and t he amou n t o f t i m e t hose resou rcesa re app l i ed t o comp l e t e t h e wo r k o f t he p ro j ec t i s am a j o r p a r t o f d e t e r m i n i n g t h e p r o j e c t c o st .
St a f f i ng m anagemen t p l an .
P ro j ec t s t a f f i ng a t t r i bu t es and pe rsonne l r a t es
(Sect i on 9 . 1 .3 . 3 ) a re necessa ry com ponen t s f o r
deve l op i ng t he schedu l e cos t es t i ma t es .
Risk reg is te r .
T he cos t es t i ma t o r cons ide rs i n f o rm a t i on on r i sk
responses (Sect i on 1 1 . 2 .3 . 1 ) w hen p rodu c i ng costes t i ma t es .
Akram Al-Najjar, PMP.Project Management Consultant
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Source: pmbok guide 2004 Slide 52
Too ls & Techn iq ues
A n al og o u s es t im a t i n g ( Ex p e r t j u d g m e n t ) U se d t oes t i ma t e t o t a l p ro j ec t cost s i f t he re i s a l i m i t ed am oun to f de t a i l ed i n f o rm a t i on
Determ ine Resour ce Cost Rates
B o t t o m - u p e st i m a t i n g Es t i ma t i ng t he cos t o fi nd i v i dua l wo r k i t em s and t hen ro l l i ng up t he cos t s t oa r r i ve a t a p ro j ec t t o t a l
Param e t r i c est i m a t i ng Us ing p ro j ec t cha ract e r i s t i cs( o r p a r a m e t e r s) i n a m a t h e m a t i ca l m o d e l t o p r e d i c tcos ts (e .g . , p r i ce per squar e foo t )
P r oj e c t M an a g em e n t So f t w a r e - PM s of t w a r e an dspreadsheets
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Akram Al-Najjar, PMP.Project Management Consultant
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Source: pmbok guide 2004 Slide 53
Too ls & Techn iq ues
Vendor B id Ana lys is
Reserve Ana ly s is : Cont ingency r eserves a re es t im atedcost s t o be u sed a t t he d i sc re t i on o f t h e p ro j ec tm anage r t o deal w i t h an t i c i pa t ed , bu t no t ce r t a i n ,e v en t s . Th e se e v en t s a r e k n o w n u n k n o w n s a n d a r epa r t o f t he p ro j ec t scope and cos t base l ines .
Cost o f Qua l i t y :Cost o f qu a l i t y ( Sect ion 8 .1 .2 .4 ) can a lsobe used t o p repa re t h e schedu l e ac t i v i t y cos t es t i ma t e .
Akram Al-Najjar, PMP.Project Management Consultant
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Source: pmbok guide 2004 Slide 54
O u t p u t s
Act i v i t y Cost es t im a tes Qu a n t i t a t i veassessm ents o f th e cost o f r esources (e .g .,u n i t s o f cu r re n cy o r s t a f f h o u rs )
Types o f es t im a tes
Or d er o f m ag ni t ud e ( - 2 5% / + 7 5 % )
Bu d get est im a t e ( - 1 0% / + 2 5 % )
Def in it iv e est i m at e ( - 5 % / + 1 0 % )
Suppor t ing de ta i l Desc r i p t i on o f es t i ma t ed scope o f w o rk
Docum en t a t i on o f t he bas i s f o r t he es t i ma t e
Docum en t a t i on o f any assum p t i ons made
Range o f poss ib le resu l t s
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Akram Al-Najjar, PMP.Project Management Consultant
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Source: pmbok guide 2004 Slide 55
Out pu t s ( con t .)
Request ed Changes
The Cost Est im a t ing p rocess may g enera terequested changes tha t m ay a f fec t the costm a n a ge me n t p l a n , ac t i v i t y r e so u rce re q u i rem e n tsa n d o th e r co mp o n e n ts o f t h e p ro j e c t ma n a g e me n tp lan. Requested chan ges are processed for r eviewa n d d i sp os it i o n t h ro u g h t h e I n te g ra te d Ch a n g e
Cost m anagement p lan
Descr ibes how cost v a r iances w i l l bemanaged
Par t o f the overa l l p ro j ec t p lan
Cost Estimating
Akram Al-Najjar, PMP.Project Management Consultant
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Source: pmbok guide 2004 Slide 56
Cost Budge t in g
Aggregating the estimated costs ofindividual activities or work packagesto establish a cost baseline.
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Akram Al-Najjar, PMP.Project Management Consultant
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Source: pmbok guide 2004 Slide 57
Cost Budge t in g
Inputs Project Scope Statement
Work Breakdown Structure
WBS Dictionary
Cost estimates
Supporting Detail
Project schedule Resource Calendars
Contract
Cost management plan
Tools & Techniques Cost Aggregation
Reserve Analysis
Parametric Estimating
Funding Limit Reconciliation
Outputs Cost baseline
Project Funding Requirements
Cost Management Plan (Updates)
Requested Changes
Akram Al-Najjar, PMP.Project Management Consultant
[email protected]+20105394312
Source: pmbok guide 2004 Slide 58
I n p u t s
Pro jec t Scope Sta tem ent :
W BS I d e n t i f i es t h e p ro j e c t e le me n ts t o w h i chth e costs w i l l be a l loca ted
WBS Dict ionar y
Cost Est im ates
Cost Est im a te Suppor t in g De ta i l
Pro jec t schedu le Used t o ass ign costs t op ro j e c t e le me n ts f o r t h e t i m e p er i o d w h e ncosts w i l l be incur red
Resour ce Calendars
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Akram Al-Najjar, PMP.Project Management Consultant
[email protected]+20105394312
Source: pmbok guide 2004 Slide 59
I n p u t s
Contract
(Se ct i o n 1 2 .4 .3 .2 ) i n f o rma t i o n r e l ate d t o w h a tp roduct s , serv i ces, o r resu l ts have b eenp u rch a se d a n d t h e i r co st s a re u se d i ndeve lop ing the budge t .
Cost Management Plan
Th e co s t m a n a ge me n t p l a n co mp o n e n t o f t h ep ro j e c t m a n a ge me n t p l a n a n d o th e r su b s i d ia r yp lans a re cons ide red dur ing cost bu dge t ing .
Akram Al-Najjar, PMP.Project Management Consultant
[email protected]+20105394312
Source: pmbok guide 2004 Slide 60
Too ls & Techn iq ues
Cost Aggrega t ion
Reserv e Analysis :
Management con t ingency reserves a re budge tsreserved fo r unp lanned , bu t po ten t ia l l yrequ i red , changes to p ro j ec t scope and cost .
Param et r i c Est im a t ing
Fund ing L imi t Reconc i li a t i on
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Akram Al-Najjar, PMP.Project Management Consultant
[email protected]+20105394312
Source: pmbok guide 2004 Slide 61
O u t p u t s
Cost base l ine Ti me p h a se d b u d g et t h a t w i l lbe used to m easure and m on i to r t he costp e r f o rma n ce o f t h e p ro j e ct
0
20
40
60
80
100
120
140
Jan Feb Mar Apr May Jun
Reporting Period
BCWS($K)
Akram Al-Najjar, PMP.Project Management Consultant
[email protected]+20105394312
Source: pmbok guide 2004 Slide 62
O u t p u t s
Pro j ec t Fund i ng Requ i rem en t s
Cost Managem ent P lan (Updates)
Requested Changes
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Akram Al-Najjar, PMP.Project Management Consultant
[email protected]+20105394312
Source: pmbok guide 2004 Slide 63
Cost Con t r o l
Includes:
Monitoring cost performance to detect variances from theplan
Ensuring that all appropriate changes are recorded
Preventing incorrect, inappropriate, or unauthorizedchanges
Informing the appropriate stakeholders of authorizedchanges
Analyzing positive and negative variances and how theyaffect the other control processes
Influencing the factors that create changes
to the cost baseline to ensure that changes are agreed upon
Determining that the cost baseline has changed
Managing the actual changes when and as they occur
Akram Al-Najjar, PMP.Project Management Consultant
[email protected]+20105394312
Source: pmbok guide 2004 Slide 64
Cost Cont ro l
Inputs Cost baseline
Project Funding Requirements
Performance reports
Work Performance Information
Approved change requests
Project management plan
Tools & Techniques Cost change control system
Performance measurement Analysis
Forecasting
Project Performance Reviews
Project Management Software
Variance ManagementOutputs Cost Estimates (Update)
Cost Baseline (Updates)
Performance Measurements
Forecasted Completion
Requested Changes
Recommended Corrective action
Organizational Process Assets (Updates)
Project Management Plan (Updates)
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Akram Al-Najjar, PMP.Project Management Consultant
[email protected]+20105394312
Source: pmbok guide 2004 Slide 65
Cost Cont ro l