project management using ms project
DESCRIPTION
What is Project Management and its uses as a BUsiness ManagerTRANSCRIPT
![Page 1: Project Management Using MS Project](https://reader036.vdocuments.site/reader036/viewer/2022062819/563db9da550346aa9aa08aee/html5/thumbnails/1.jpg)
Project Management using MS Project
![Page 2: Project Management Using MS Project](https://reader036.vdocuments.site/reader036/viewer/2022062819/563db9da550346aa9aa08aee/html5/thumbnails/2.jpg)
A project is an activity that :is temporary having a start and end date is unique brings about change has unknown elements, which therefore create risk
What is a project?
A project contains a well defined objective. The project objective is defined in terms of scope ( or requirements), schedule, and cost.A project is carried out via a set of interdependent tasks. A project uses various resources to carry out these tasks.
![Page 3: Project Management Using MS Project](https://reader036.vdocuments.site/reader036/viewer/2022062819/563db9da550346aa9aa08aee/html5/thumbnails/3.jpg)
Generally projects are formed to solve a problem or take advantage of an opportunity.
Business as usual activities can often be mistaken for projects. Generally it is the uniqueness of the activity that is the deciding factor – do we do this every year? If so, then it is not truly a project – although you can use project methods to get it done.
What is a project?
![Page 4: Project Management Using MS Project](https://reader036.vdocuments.site/reader036/viewer/2022062819/563db9da550346aa9aa08aee/html5/thumbnails/4.jpg)
Common project termsDeliverables: Tangible ‘things’ that the project producesMilestones: Dates by which major activities are performed.Tasks: Also called Actions. Activities undertaken during the projectRisks: Potential problems that may ariseIssues: Risks that have happenedGantt Chart: A specific type of chart showing time and tasks. Usually created by a Project Management program like MS Project.Stakeholder: Any person or group of people who may be affected by your project
![Page 5: Project Management Using MS Project](https://reader036.vdocuments.site/reader036/viewer/2022062819/563db9da550346aa9aa08aee/html5/thumbnails/5.jpg)
Project Management’s FIVE processes
The capacity to marshal resources, lay out plans, program work and spur effort for a temporary endeavor which is finite in that it has a defined beginning and ending, and which is undertaken to create a unique product or service.
• Initiating a project• Planning the project• Executing the project/plan• Controlling execution of the project/plan• Closing the project
![Page 6: Project Management Using MS Project](https://reader036.vdocuments.site/reader036/viewer/2022062819/563db9da550346aa9aa08aee/html5/thumbnails/6.jpg)
Project Management’s THREE elements
The capacity to marshal resources, lay out plans, program work and spur effort for a temporary endeavor which is finite in that it has a defined beginning and ending, and which is undertaken to create a unique product or service.
TasksResourcesTime
![Page 7: Project Management Using MS Project](https://reader036.vdocuments.site/reader036/viewer/2022062819/563db9da550346aa9aa08aee/html5/thumbnails/7.jpg)
Project Management success factors
The capacity to marshal resources, lay out plans, program work and spur effort for a temporary endeavor which is finite in that it has a defined beginning and ending, and which is undertaken to create a unique product or service.
On time deliveryWithin budget deliveryHigh quality delivery
![Page 8: Project Management Using MS Project](https://reader036.vdocuments.site/reader036/viewer/2022062819/563db9da550346aa9aa08aee/html5/thumbnails/8.jpg)
![Page 9: Project Management Using MS Project](https://reader036.vdocuments.site/reader036/viewer/2022062819/563db9da550346aa9aa08aee/html5/thumbnails/9.jpg)
Project Life Cycle
![Page 10: Project Management Using MS Project](https://reader036.vdocuments.site/reader036/viewer/2022062819/563db9da550346aa9aa08aee/html5/thumbnails/10.jpg)
Project Life Cycle
![Page 11: Project Management Using MS Project](https://reader036.vdocuments.site/reader036/viewer/2022062819/563db9da550346aa9aa08aee/html5/thumbnails/11.jpg)
Project Life Cycle
![Page 12: Project Management Using MS Project](https://reader036.vdocuments.site/reader036/viewer/2022062819/563db9da550346aa9aa08aee/html5/thumbnails/12.jpg)
Project Life Cycle
![Page 13: Project Management Using MS Project](https://reader036.vdocuments.site/reader036/viewer/2022062819/563db9da550346aa9aa08aee/html5/thumbnails/13.jpg)
Project Management Five Processes
Initiating Process Planning Process Executing Process Controlling Process Closing Process
![Page 14: Project Management Using MS Project](https://reader036.vdocuments.site/reader036/viewer/2022062819/563db9da550346aa9aa08aee/html5/thumbnails/14.jpg)
PM Fundamentals
![Page 15: Project Management Using MS Project](https://reader036.vdocuments.site/reader036/viewer/2022062819/563db9da550346aa9aa08aee/html5/thumbnails/15.jpg)
Project ConstraintsProject scope – Have all the project requirements (i.e., deliverables) been completed? Project cost – Is the cost of the project close to the amount the customer has agreed to pay? Schedule – Was the project completed on time?Customer satisfaction – Is the customer happy with the quality of the project?
![Page 16: Project Management Using MS Project](https://reader036.vdocuments.site/reader036/viewer/2022062819/563db9da550346aa9aa08aee/html5/thumbnails/16.jpg)
Work-Breakdown Structure (WBS)
Hierarchy of tasks required to complete projectEach task is broken into smaller tasks that can be
managed and estimatedDefine task dependencies
▪ Some tasks must begin at the same time, some must end at the same time and some cannot start until the other tasks have finished.
Estimate task durations and costMay be inputted into project management
software
![Page 17: Project Management Using MS Project](https://reader036.vdocuments.site/reader036/viewer/2022062819/563db9da550346aa9aa08aee/html5/thumbnails/17.jpg)
Work-Breakdown Structure (WBS)
![Page 18: Project Management Using MS Project](https://reader036.vdocuments.site/reader036/viewer/2022062819/563db9da550346aa9aa08aee/html5/thumbnails/18.jpg)
Project Scheduling
![Page 19: Project Management Using MS Project](https://reader036.vdocuments.site/reader036/viewer/2022062819/563db9da550346aa9aa08aee/html5/thumbnails/19.jpg)
Activity Duration EstimatesThe first step in scheduling is to estimate how long each activity will take.The duration estimate is the total elapsed time for the work to be done PLUS any associated waiting time.The person responsible for performing the activity should help make the duration estimate.
![Page 20: Project Management Using MS Project](https://reader036.vdocuments.site/reader036/viewer/2022062819/563db9da550346aa9aa08aee/html5/thumbnails/20.jpg)
Project Start and Finish Times
It is necessary to select an estimated start time and a required completion time for the overall project.
![Page 21: Project Management Using MS Project](https://reader036.vdocuments.site/reader036/viewer/2022062819/563db9da550346aa9aa08aee/html5/thumbnails/21.jpg)
Schedule CalculationsA project schedule includes:
The earliest times (or dates) at which each activity can start and finish, based on the project's estimated start time (or date)The latest times (or dates) by which each activity must start and finish in order to complete the project by its required completion time (or date)
![Page 22: Project Management Using MS Project](https://reader036.vdocuments.site/reader036/viewer/2022062819/563db9da550346aa9aa08aee/html5/thumbnails/22.jpg)
Earliest Start and Finish TimesEarliest start time (ES) is the earliest time at which a particular activity can begin.Earliest finish time (EF) is the earliest time by which a particular activity can be completed.
EF – ES = Activity Duration Estimate
![Page 23: Project Management Using MS Project](https://reader036.vdocuments.site/reader036/viewer/2022062819/563db9da550346aa9aa08aee/html5/thumbnails/23.jpg)
Latest Start and Finish TimesLatest start time (LS) is the latest time an
activity must be started in order for the entire project to be completed by its completion time.
Latest finish time (LF) is the latest time an activity must be finished in order for the entire project to be completed by its completion time.
LF – LS = Activity Duration Estimate
![Page 24: Project Management Using MS Project](https://reader036.vdocuments.site/reader036/viewer/2022062819/563db9da550346aa9aa08aee/html5/thumbnails/24.jpg)
Slack timeSlack or float is the amount of time that a task in a project network can be delayed without causing a delay to:
• Subsequent tasks (free slack)
• Project completion date (total slack)
![Page 25: Project Management Using MS Project](https://reader036.vdocuments.site/reader036/viewer/2022062819/563db9da550346aa9aa08aee/html5/thumbnails/25.jpg)
Free vs. Total slack
Free slack (or float): The free slack of an activity is the time this activity can be delayed without impact on the following activity.
Total slack (or float): The total slack of an activity is the time this activity can be delayed without impact on the finish date of the project.
![Page 26: Project Management Using MS Project](https://reader036.vdocuments.site/reader036/viewer/2022062819/563db9da550346aa9aa08aee/html5/thumbnails/26.jpg)
Critical ActivityAn activity that has a total slack equal to zero is said to be a 'critical activity', which means that a delay in the finish time of this activity will cause the entire project to be delayed by the same amount of time.
![Page 27: Project Management Using MS Project](https://reader036.vdocuments.site/reader036/viewer/2022062819/563db9da550346aa9aa08aee/html5/thumbnails/27.jpg)
Total Slack (Cont.)If total slack is positive, it is the maximum time the activities on the path can be delayed.
If total slack is negative, it is the amount of time the activities on the path must be accelerated.
![Page 29: Project Management Using MS Project](https://reader036.vdocuments.site/reader036/viewer/2022062819/563db9da550346aa9aa08aee/html5/thumbnails/29.jpg)
Critical PathThe critical path is the longest path in the diagram.The activities that make up the critical path have the least slack.
Types of Critical Paths
Noncritical paths have positive values of total slack.
Critical paths have zero or negative values of total slack.
![Page 30: Project Management Using MS Project](https://reader036.vdocuments.site/reader036/viewer/2022062819/563db9da550346aa9aa08aee/html5/thumbnails/30.jpg)
Critical Path AnalysisLongest path through the network of activities
• Task dependencies compressed as much as possible• Tasks may be moved to non-critical paths to shorten
critical path • If tasks on critical path run late, the project will be
late.
![Page 31: Project Management Using MS Project](https://reader036.vdocuments.site/reader036/viewer/2022062819/563db9da550346aa9aa08aee/html5/thumbnails/31.jpg)
Determining the Critical Path for Project X
![Page 32: Project Management Using MS Project](https://reader036.vdocuments.site/reader036/viewer/2022062819/563db9da550346aa9aa08aee/html5/thumbnails/32.jpg)
Various Project Management Tools/Techniques
Gantt Charta simple bar chart that depicts project tasks against a calendar
Program Evaluation and Review Technique (PERT)is a graphical network model that depicts a project’s tasks and the relationships between those tasks (Dependencies and Critical paths are found in PERT charts)
Microsoft ProjectMost widely used project management softwarehttp://office.microsoft.com/en-us/project/default.aspx
![Page 33: Project Management Using MS Project](https://reader036.vdocuments.site/reader036/viewer/2022062819/563db9da550346aa9aa08aee/html5/thumbnails/33.jpg)
Develop a schedule Gantt Chart
![Page 34: Project Management Using MS Project](https://reader036.vdocuments.site/reader036/viewer/2022062819/563db9da550346aa9aa08aee/html5/thumbnails/34.jpg)
Gantt Chart of WBS created by MS Project
![Page 35: Project Management Using MS Project](https://reader036.vdocuments.site/reader036/viewer/2022062819/563db9da550346aa9aa08aee/html5/thumbnails/35.jpg)
PERT Chart Example
![Page 36: Project Management Using MS Project](https://reader036.vdocuments.site/reader036/viewer/2022062819/563db9da550346aa9aa08aee/html5/thumbnails/36.jpg)
Project Planning
![Page 37: Project Management Using MS Project](https://reader036.vdocuments.site/reader036/viewer/2022062819/563db9da550346aa9aa08aee/html5/thumbnails/37.jpg)
Steps in Project Planning• Specification• Global Structure• Project Breakdown• Task Delegation• Time Estimation• Identification of needed resources• Integration of Time/Personnel• Setting Controls/Gates
![Page 38: Project Management Using MS Project](https://reader036.vdocuments.site/reader036/viewer/2022062819/563db9da550346aa9aa08aee/html5/thumbnails/38.jpg)
Specification• A statement of the problem, not the solution. • Normally contains errors, ambiguities, &
misunderstandings• Need a written definition of requirements and deadlines• Should be clear, complete and rigorous to eliminate
misunderstandings, contradictions, oversight of technical difficulties
![Page 39: Project Management Using MS Project](https://reader036.vdocuments.site/reader036/viewer/2022062819/563db9da550346aa9aa08aee/html5/thumbnails/39.jpg)
Sources of Problems• The work duplicates or negates work already done• The deliverable is not appropriate• The time frame is unrealistic• The work depends on work of others• The resources are not available• The cost is prohibitive
![Page 40: Project Management Using MS Project](https://reader036.vdocuments.site/reader036/viewer/2022062819/563db9da550346aa9aa08aee/html5/thumbnails/40.jpg)
Structure• Tasks that must be accomplished• Relationship of each task to the specifications• Who will do what?• When will it be done?
![Page 41: Project Management Using MS Project](https://reader036.vdocuments.site/reader036/viewer/2022062819/563db9da550346aa9aa08aee/html5/thumbnails/41.jpg)
Project Breakdown• Break project down into a series of task• Break each task down into subtasks• Continue until all items are doable and understandable• Skills/processes that must be learned• Equipment/supplies that must be ordered• Preliminary tests• Sample collection• Sample preparation• Measurements
Experimental setup Protocol
• Data analysis• Statistical Analysis
![Page 42: Project Management Using MS Project](https://reader036.vdocuments.site/reader036/viewer/2022062819/563db9da550346aa9aa08aee/html5/thumbnails/42.jpg)
Sample Collection• Contact supplier (at Tech Farm)• Prepare collection materials
Sample containerPreservative (e.g. Sodium Citrate)
• Collect sample• Perform preliminary quality control• Transport sample• Store sample
Project Breakdown
![Page 43: Project Management Using MS Project](https://reader036.vdocuments.site/reader036/viewer/2022062819/563db9da550346aa9aa08aee/html5/thumbnails/43.jpg)
Task Allocation• Assign tasks to specific people (or teams)• Order tasks so that they occur in a logical sequence• Match tasks to abilities of the team• Allow for flexibilities – the team can do sub-planning• Match task with personalities and goals
Person 1 needs more responsibility Person 2 needs more detail Person 3 needs to learn how to use the fluorescent microscope
• One person (or team) may do multiple tasks (e.g. to reduce boredom).• Do not over specify
![Page 44: Project Management Using MS Project](https://reader036.vdocuments.site/reader036/viewer/2022062819/563db9da550346aa9aa08aee/html5/thumbnails/44.jpg)
Time Estimation• Start at the bottom of the tree. I.e. sum the time for individual subtasks to
estimate total task time• Times are based on previous experience• They are always wrong – plan accordingly• Example: How long should it take you to climb the statue of Liberty?
Estimate the number of steps Estimate the time per step Can do a preliminary study on a flight of stairs
• Add extra buffer where tasks depend on one another• Weigh speed against quality
![Page 45: Project Management Using MS Project](https://reader036.vdocuments.site/reader036/viewer/2022062819/563db9da550346aa9aa08aee/html5/thumbnails/45.jpg)
Project Controls• Include
milestones (clear, unambiguous targets of what, by when) established means of communication
• Provide job satisfaction• Indicate progress to your supervisors• Allow for quality control checkpoints• Provide points of communication• You should distinguish milestones from mill-stones
![Page 46: Project Management Using MS Project](https://reader036.vdocuments.site/reader036/viewer/2022062819/563db9da550346aa9aa08aee/html5/thumbnails/46.jpg)
Planning Strategy• Formulate an initial plan• Check with team members for
Input on timing Review of tasks and feasibility
• Revise the plan• Check with your supervisor• Revise the plan• Get consensus of team members• Get supervisor approval
![Page 47: Project Management Using MS Project](https://reader036.vdocuments.site/reader036/viewer/2022062819/563db9da550346aa9aa08aee/html5/thumbnails/47.jpg)
Quality Controls• Establish gates for transition to the next phase (gate/stage processes)• Must examine critical parameters• Should not be overly burdensome
o With respect to time requirementso With respect to costo With respect to what is measured
• Leave specifics toward the end
![Page 48: Project Management Using MS Project](https://reader036.vdocuments.site/reader036/viewer/2022062819/563db9da550346aa9aa08aee/html5/thumbnails/48.jpg)
Planning for Unknowns
• Identify risky taskso Have not been done beforeo Rely on new equipmento Depend on training of personnel
• Allow extra margins for risky tasks• Rehearse risky (and expensive) tasks prior to the real thing
E.g. run the experiment with an inexpensive peptide before using that $2,000/mg designer peptide.
![Page 49: Project Management Using MS Project](https://reader036.vdocuments.site/reader036/viewer/2022062819/563db9da550346aa9aa08aee/html5/thumbnails/49.jpg)
Project Risk “Project risk is an uncertain event or condition that, if it occurs, has a positive or negative effect on a project objective”
“A combination of the probability of a defined threat or opportunity (Likelihood) and the magnitude of the consequences of the occurrence (Impact) defines a Risk Index”
![Page 50: Project Management Using MS Project](https://reader036.vdocuments.site/reader036/viewer/2022062819/563db9da550346aa9aa08aee/html5/thumbnails/50.jpg)
Risk Impact
Threat → Scope → Poor Quality ProductThreat → Schedule → Late DeliveryThreat → Cost → Overspend
![Page 51: Project Management Using MS Project](https://reader036.vdocuments.site/reader036/viewer/2022062819/563db9da550346aa9aa08aee/html5/thumbnails/51.jpg)
Risk Management – Key Points
• Make the management of risk integral to the way the project is managed
• Ensure that cost and time contingencies are consistent with identified risks
• Focus on the “significant few” – don’t try to manage too many risks
• Be vigilant and proactive
![Page 52: Project Management Using MS Project](https://reader036.vdocuments.site/reader036/viewer/2022062819/563db9da550346aa9aa08aee/html5/thumbnails/52.jpg)
Project Monitoring
AndControl
![Page 53: Project Management Using MS Project](https://reader036.vdocuments.site/reader036/viewer/2022062819/563db9da550346aa9aa08aee/html5/thumbnails/53.jpg)
Project MonitoringTypical Monitoring Activities
• Regular reviews of progress against schedule using WBS as basis (Plan against Baseline)
• Regular review of actual costs (O/P from SAP) against budgeted costs and Earned Value at WBS level
• Regular review of resource loading• Regular progress meetings with project team• Regular meetings with contractors• Production of periodic progress reports• Risk reviews• Inspections/ audits
![Page 54: Project Management Using MS Project](https://reader036.vdocuments.site/reader036/viewer/2022062819/563db9da550346aa9aa08aee/html5/thumbnails/54.jpg)
Project ControlTypical Control Activities
• Assign responsibilities at Work Package level• Staged authorisation of work to be done• Staged release of budgets • Ensure PM has a ‘Management Reserve’ under his
control• Seek corrective action reports when WPs go ‘off
track’ (overrunning or overspending)• Release Management Reserve carefully
![Page 55: Project Management Using MS Project](https://reader036.vdocuments.site/reader036/viewer/2022062819/563db9da550346aa9aa08aee/html5/thumbnails/55.jpg)
Project Cost Management
![Page 56: Project Management Using MS Project](https://reader036.vdocuments.site/reader036/viewer/2022062819/563db9da550346aa9aa08aee/html5/thumbnails/56.jpg)
What is Cost and Project Cost Management?
Cost is a resource sacrificed or foregone to achieve a specific objective, or something given up in exchange
Costs are usually measured in monetary units, such as dollars
Project cost management includes the processes required to ensure that the project is completed within an approved budget
![Page 57: Project Management Using MS Project](https://reader036.vdocuments.site/reader036/viewer/2022062819/563db9da550346aa9aa08aee/html5/thumbnails/57.jpg)
Project Cost Management Processes
Cost estimating: Developing an approximation or estimate of the costs of the resources needed to complete a project
Cost budgeting: Allocating the overall cost estimate to individual work items to establish a baseline for measuring performance
Cost control: Controlling changes to the project budget
![Page 58: Project Management Using MS Project](https://reader036.vdocuments.site/reader036/viewer/2022062819/563db9da550346aa9aa08aee/html5/thumbnails/58.jpg)
Basic Principles of Cost Management
Most members of an executive board have a better understanding and are more interested in financial terms than IT terms, so IT project managers must speak their language.
• Profits are revenues minus expenses.• Life cycle costing considers the total cost of ownership, or development
plus support costs, for a project. • Cash flow analysis determines the estimated annual costs and benefits
for a project and the resulting annual cash flow.
![Page 59: Project Management Using MS Project](https://reader036.vdocuments.site/reader036/viewer/2022062819/563db9da550346aa9aa08aee/html5/thumbnails/59.jpg)
• Tangible costs or benefits are those costs or benefits that an organization can easily measure in dollars.
• Intangible costs or benefits are costs or benefits that are difficult to measure in monetary terms.
• Direct costs are costs that can be directly related to producing the products and services of the project.
• Indirect costs are costs that are not directly related to the products or services of the project, but are indirectly related to performing the project.
• Sunk cost is money that has been spent in the past; when deciding what projects to invest in or continue, you should not include sunk costs.
Basic Principles of Cost Management
![Page 60: Project Management Using MS Project](https://reader036.vdocuments.site/reader036/viewer/2022062819/563db9da550346aa9aa08aee/html5/thumbnails/60.jpg)
• Learning curve theory states that when many items are produced repetitively, the unit cost of those items decreases in a regular pattern as more units are produced.
• Reserves are dollars included in a cost estimate to mitigate cost risk by allowing for future situations that are difficult to predict.
Contingency reserves allow for future situations that may be partially planned for (sometimes called known unknowns) and are included in the project cost baseline.
Management reserves allow for future situations that are unpredictable (sometimes called unknown unknowns).
Basic Principles of Cost Management
![Page 61: Project Management Using MS Project](https://reader036.vdocuments.site/reader036/viewer/2022062819/563db9da550346aa9aa08aee/html5/thumbnails/61.jpg)
Cost EstimatingProject managers must take cost estimates seriously if they want to complete projects within budget constraints.
It’s important to know the types of cost estimates, how to prepare cost estimates, and typical problems associated with IT cost estimates.
![Page 62: Project Management Using MS Project](https://reader036.vdocuments.site/reader036/viewer/2022062819/563db9da550346aa9aa08aee/html5/thumbnails/62.jpg)
Types of Cost Estimates
![Page 63: Project Management Using MS Project](https://reader036.vdocuments.site/reader036/viewer/2022062819/563db9da550346aa9aa08aee/html5/thumbnails/63.jpg)
Cost Management PlanCost management plan is a document that describes how the organization will manage cost variances on the project.
A large percentage of total project costs are often labor costs, so project managers must develop and track estimates for labor.
![Page 64: Project Management Using MS Project](https://reader036.vdocuments.site/reader036/viewer/2022062819/563db9da550346aa9aa08aee/html5/thumbnails/64.jpg)
Cost Estimation Tools and TechniquesBasic tools and techniques for cost estimates:
• Analogous or top-down estimates: Use the actual cost of a previous, similar project as the basis for estimating the cost of the current project.
• Bottom-up estimates: Involve estimating individual work items or activities and summing them to get a project total.
• Parametric modeling: Uses project characteristics (parameters) in a mathematical model to estimate project costs.
• Computerized tools: Tools, such as spreadsheets and project management software, that can make working with different cost estimates and cost estimation tools easier.
![Page 65: Project Management Using MS Project](https://reader036.vdocuments.site/reader036/viewer/2022062819/563db9da550346aa9aa08aee/html5/thumbnails/65.jpg)
Constructive Cost Model (COCOMO)
• Barry Boehm helped develop the COCOMO models for estimating software development costs.
• Parameters include:o Function points: Technology-independent assessments of the functions involved
in developing a system.
o Source Lines of Code (SLOC): A human-written line of code that is not a blank line or comment.
• Boehm suggests that only parametric models do not suffer from the limits of human decision-making.
![Page 66: Project Management Using MS Project](https://reader036.vdocuments.site/reader036/viewer/2022062819/563db9da550346aa9aa08aee/html5/thumbnails/66.jpg)
Typical Problems with IT Cost Estimates
• Developing an estimate for a large software project is a complex task that requires a significant amount of effort.
• People who develop estimates often do not have much experience.
• Human beings are biased toward underestimation.
• Management might ask for an estimate, but really desire a bid to win a major contract or get internal funding.
![Page 67: Project Management Using MS Project](https://reader036.vdocuments.site/reader036/viewer/2022062819/563db9da550346aa9aa08aee/html5/thumbnails/67.jpg)
Surveyor Pro Project Cost Estimate
![Page 68: Project Management Using MS Project](https://reader036.vdocuments.site/reader036/viewer/2022062819/563db9da550346aa9aa08aee/html5/thumbnails/68.jpg)
Surveyor Pro Software Development Estimate
![Page 69: Project Management Using MS Project](https://reader036.vdocuments.site/reader036/viewer/2022062819/563db9da550346aa9aa08aee/html5/thumbnails/69.jpg)
Cost Budgeting• Cost budgeting involves allocating the project cost estimate to individual work items over
time.
• The WBS is a required input for the cost budgeting process because it defines the work items.
• Important goal is to produce a cost baseline:
A time-phased budget that project managers use to measure and monitor cost performance.
![Page 70: Project Management Using MS Project](https://reader036.vdocuments.site/reader036/viewer/2022062819/563db9da550346aa9aa08aee/html5/thumbnails/70.jpg)
Surveyor Pro Project Cost Baseline
![Page 71: Project Management Using MS Project](https://reader036.vdocuments.site/reader036/viewer/2022062819/563db9da550346aa9aa08aee/html5/thumbnails/71.jpg)
Cost ControlProject cost control includes:
• Monitoring cost performance.
• Ensuring that only appropriate project changes are included in a revised cost baseline.
• Informing project stakeholders of authorized changes to the project that will affect costs.
Many organizations around the globe have problems with cost control.
![Page 72: Project Management Using MS Project](https://reader036.vdocuments.site/reader036/viewer/2022062819/563db9da550346aa9aa08aee/html5/thumbnails/72.jpg)
Earned Value Management (EVM)
EVM is a project performance measurement technique that integrates scope, time, and cost data.Given a baseline (original plan plus approved changes), you can determine how well the project is meeting its goals.You must enter actual information periodically to use EVM.More and more organizations around the world are using EVM to help control project costs.
![Page 73: Project Management Using MS Project](https://reader036.vdocuments.site/reader036/viewer/2022062819/563db9da550346aa9aa08aee/html5/thumbnails/73.jpg)
Earned Value Management TermsPlanned value (PV), formerly called the budgeted cost of work scheduled (BCWS), also called the budget, is that portion of the approved total cost estimate planned to be spent on an activity during a given period.Actual cost (AC), formerly called actual cost of work performed (ACWP), is the total of direct and indirect costs incurred in accomplishing work on an activity during a given period.Earned value (EV), formerly called the budgeted cost of work performed (BCWP), is an estimate of the value of the physical work actually completed.EV is based on the original planned costs for the project or activity and the rate at which the team is completing work on the project or activity to date.
![Page 74: Project Management Using MS Project](https://reader036.vdocuments.site/reader036/viewer/2022062819/563db9da550346aa9aa08aee/html5/thumbnails/74.jpg)
Rate of PerformanceRate of performance (RP) is the ratio of actual work completed to the percentage of work planned to have been completed at any given time during the life of the project or activity.
For example, suppose the server installation was halfway completed by the end of week 1. The rate of performance would be 50 percent (50/100) because by the end of week 1, the planned schedule reflects that the task should be 100 percent complete and only 50 percent of that work has been completed.
![Page 75: Project Management Using MS Project](https://reader036.vdocuments.site/reader036/viewer/2022062819/563db9da550346aa9aa08aee/html5/thumbnails/75.jpg)
Earned Value Calculations for One Activity After Week One
![Page 76: Project Management Using MS Project](https://reader036.vdocuments.site/reader036/viewer/2022062819/563db9da550346aa9aa08aee/html5/thumbnails/76.jpg)
Earned Value Formulas
![Page 77: Project Management Using MS Project](https://reader036.vdocuments.site/reader036/viewer/2022062819/563db9da550346aa9aa08aee/html5/thumbnails/77.jpg)
Rules of Thumb for Earned Value Numbers
Negative numbers for cost and schedule variance indicate problems in those areas.
A CPI or SPI that is less than 100 percent indicates problems.
Problems mean the project is costing more than planned (over budget) or taking longer than planned (behind schedule).
![Page 78: Project Management Using MS Project](https://reader036.vdocuments.site/reader036/viewer/2022062819/563db9da550346aa9aa08aee/html5/thumbnails/78.jpg)
Earned Value Calculations for a One-Year Project After Five Months
![Page 79: Project Management Using MS Project](https://reader036.vdocuments.site/reader036/viewer/2022062819/563db9da550346aa9aa08aee/html5/thumbnails/79.jpg)
Earned Value Chart for Project after Five Months
![Page 80: Project Management Using MS Project](https://reader036.vdocuments.site/reader036/viewer/2022062819/563db9da550346aa9aa08aee/html5/thumbnails/80.jpg)
Project Portfolio ManagementMany organizations collect and control an entire suite of projects or investments as one set of interrelated activities in a portfolio.
Project portfolio management has five levels:1. Put all your projects in one database.2. Prioritize the projects in your database.3. Divide your projects into two or three budgets based on type of investment.4. Automate the repository.5. Apply modern portfolio theory, including risk-return tools that map project risk on a curve.
![Page 81: Project Management Using MS Project](https://reader036.vdocuments.site/reader036/viewer/2022062819/563db9da550346aa9aa08aee/html5/thumbnails/81.jpg)
Using Software to Assist in Cost Management
Spreadsheets are a common tool for resource planning, cost estimating, cost budgeting, and cost control.
Many companies use more sophisticated and centralized financial applications software for cost information.
Project management software has many cost-related features, especially enterprise PM software.
![Page 82: Project Management Using MS Project](https://reader036.vdocuments.site/reader036/viewer/2022062819/563db9da550346aa9aa08aee/html5/thumbnails/82.jpg)
Sample Project Portfolio Management Screen Showing Project Health