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Cost Unit part 2. BSBPMG504A Manage project cost
Diploma Project Management Captain Cook College
Sharon Boyle
Presentation – Cost management techniques – some detail as requested
Changes or variations Check everyone has completed
◦ Activity 1 – discuss this afternoon◦ Activity 3 – discuss this afternoon◦ Written/Oral – tomorrow?◦ SB CMP started last week & finish tomorrow
Everyone continues with Cost ◦ Today & Friday – completing cost Friday 23 August
Today
As per last week’s email Case studies – we can take through most of
the course ◦ Building/construction◦ Community/event based◦ Personal – seems Ok with me
Assessment: the bit you do
1. EVM an overview2. Basic Elements3. Cost Variances4. Schedule Variances
The details of EVM
tracking tools upon which to base forecasts Integrates scope, schedule & cost Answers many questions stakeholders need Performance can be shown as
◦ Past◦ Current ◦ Predictive
Promises to reduce over-runs
Earned Value Management both Time & Cost
financial analysis specialty from United States Government programs in the 1960s,
Now significant branch of project management.
In the late 1980s and early 1990s, EVM emerged as a project management methodology
EVM has become an essential part of every project tracking.
Context
Planned Value ◦ (PV) = PV or Budgeted cost of work scheduled
BCWS = Hourly Rate * Total Hours Planned or Scheduled
Actual Cost ◦ (AC) = hourly rate x total hours spent
Earned Value ◦ (EV)= Baselined costs x % complete
% Completed Planned◦ % Completed planning =PV/BAC
Basic Elements
Cost Variance (CV) indicates how much over or under budget the project is.
Why is under cost a problem? (CV) = Earned Value (EV) – Actual Cost (AC)
Also CV = BCWP – ACWP
◦ Positive Cost Variance Indicates the project is under budget
◦ Negative Cost Variance Indicates the project is over budget
Cost Variances
Cost Variance % - how much over or under budget the project is in terms of percentage
CV% = CV/EV◦ Or
CV% = CV/Budgeted Cost of Work
Cost Variances %
CPI = EV/AC
Shows how efficient we are Above 1 good efficiency Below 1 project not using resources
efficiently
Cost Performance Indicator CPI
TCPI = Total Budget – EV/Total Budget – AC
Another measure of efficiency –◦ The correct people do the correct things within a
clear process◦ Above 1 utilization must be stringent◦ Below 1 lenient.
To complete Cost performance indicator (TCCPI)
Schedule Variance (SV) = Earned Value (EV) - Planned Value (PV)
How much is yet to be completed as per schedule
+ve Schedule variances = we are ahead of time
-ve Schedule variance = we are behind schedule
Then same % as for Costs
Schedule Variance
Budget at Completion = total budget
BAC = Baselined effort hours x hourly rate
Estimate to complete – just what it says. Estimate hours required x hourly rate
A few more
http://www.youtube.com/watch?v=7WsfuvHegxE&feature=related
Why important? What can go wrong? Relationship to other aspects of project
management?
Changes or Variations
The establishes an orderly and effective procedure for ◦ tracking the submission, ◦ coordination, review, evaluation, ◦ categorization, and ◦ approval for release of all changes to the project’s
baselines.
Change Management process
Element Description
Date The date the CR was created
CR# Assigned by the Change Manager
Title A brief description of the change request
Description Description of the desired change, the impact, or benefits of a change should also be described
Submitter Name of the person completing the CR Form and who can answer questions regarding the suggested change
Phone Phone number of the submitter
E-Mail Email of the submitter
Product The product that the suggested change is for
Version The product version that the suggested change is for
Priority A code that provides a recommended categorization of the urgency of the requested change (High, Medium, Low)
Start the process
Priority Description
High <Insert the definition the project assigns to a high priority CR>
Medium <Insert the definition the project assigns to a medium priority CR>
Low <Insert the definition the project assigns to a low priority CR>
<priority> <Insert the definition the project assigns to this level of priority CR>
Assign the priority
Type Description
Scope Change affecting scope
Time Change affecting time
Duration Change affecting duration
Cost Change affecting cost
Resources Change affecting resources
Deliverables Change affecting deliverables
Product Change affecting product
Processes Change affecting process
Quality Change affecting quality
Change requests are evaluated and assigned one or more of the following change types:
Some more to search for Any more examples to choose from the
internet.
Today’s lesson plan
Presentation – Cost management techniques – some detail as requestedChanges or variationsCheck everyone has completed
Activity 1 – discuss this afternoonActivity 3 – discuss this afternoonWritten/Oral – tomorrow?SB CMP started last week & finish tomorrow
Everyone continues with Cost Today & Friday – completing cost Friday 24 August
Master of Ceremonies suddenly taken ill two weeks before event and will not be available for the event. A strong suggestion from Councillors to get a professional.
The Council access officer wants to know how the event is to cater meet council’s Universal access policy.
Changes to Doggy Day out..