Post on 01-Nov-2014
description
Cost Unit BSBPMG504A Manage
project cost part 2. day 1 Diploma Project Management
Captain Cook CollegeSharon Boyle
Presentation Discussion revision through discussion around Assessment Items
◦ Assessment items for Cost Unit including structure for CMP◦ Confirmed & agreed date for Project management meeting
Morning Tea◦ Earned Value Analysis ◦ Variations & Closeouts
Work on either cost management plan or LMS questionsLunch Discuss answers for Activities 1 & 3 – leave Written/Oral to
next week Continue working on LMS
◦ Tomorrow◦ Project Meeting
Lesson plan 24 January
No. 1. Prepare a Cost management plan for Fred’s Shed – Mr Jones job and
include a detailed project budget.
No 2. Analyse scenario to be provided & insert into baselined budget. Note
variances
No 3. Provide progress report - this will include the Variance analysis from
Scope & Time Units.
No 4. Attend a Project Meeting where progress will be presented based on
progress reports prepared in Scope, Time & cost units. Each student is required to attend the meeting, play the role
requested and prepare a set of minutes.
Cost unit assessment items
Prepare a Cost management plan for Fred’s Shed – Mr Jones job and include a detailed project budget.
What is the purpose of a cost management plan?
Major components? Use scaled down template provided
Assessment Item 1. – workshopped for discussion & clarification
TABLE OF CONTENTS◦ Introduction ◦ Cost Management Approach ◦ Measuring Project Costs ◦ Reporting Format ◦ Cost Variance Response Process ◦ Cost Change Control Process ◦ Project Budget
Structure of cost management plan
A brief scenario will be provided which impacts on time & cost.
Update your budget in Assessment Item 1. Describe the impacts on the budget. Use the template but just the appropriate
sections
Assessment Item 2. – workshopped for discussion & clarification
Provide progress report - this will include the Variance analysis from Scope & Time Units.
Use the template provided
Assessment No 4.
Provide progress report
Each student is required to attend the meeting, play the role requested and prepare a set of minutes.
Date 25 January Agenda will be prepared & sent out by Jamie Everyone required to prepare minutes of
meeting
Assessment Item for Cost & Time
Project Manager - Jamie Assistant PM - Kevin Cost controller – Jerzy Scheduler - Chas Client – Mr Jones - Dennis CEO – Fred - Sylvester Note taker - Winni
Roles agreed last week
Remember◦ LMS – don’t bother with Activity 2. ◦ Written/Oral for next week.
Cost management plan –◦ use structure provided or do up your own ◦ Must include budget for Fred’s shed◦ Consider EVA after next week’s lectures & video
LMS questions or Cost management plan preparation
Morning Tea
1. Determine project costs 2. Monitor and control project costs 3. Conduct financial completion activities
Three basic elements within the Cost unit
Overview from PMBOK page 167
1. EVM an overview2. Basic Elements3. Cost Variances4. Schedule Variances
The details of EVM
Different ways of presenting information◦ Numbers eg
◦ Graphs
◦ Analysis & indices
Reporting & Monitoring
S-curve – ◦ expenditure &
income ◦ throughout
lifecycle
Earned Value Theory
Established Cost methods
Earned Value Management
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
http://www.youtube.com/watch?v=7WsfuvHegxE
Earned Value with Dave Litten
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
Activity 1.
Activity 3.
LMS
Lunch
Conduct appropriate close out activities◦ Has everyone been paid?◦ What about the variations? ◦ Where do we stand?◦ Detailed records must be kept◦ Any lessons learnt?
3. Conduct financial completion activities