Fundamentals of Project Cost Management

Transcript

1. Fundamentals  of  Project   Cost  Management   1   Copyright  ©  2013  Mass  Construction  School   Based  on  A  Guide  to  the  Project  Management  Body  of  Knowledge®  Fifth  Edition     PMI  and  PMBOK®  Guide  are  registered  marks  of  Project  Management  Institute,  Inc.  
2. Maintenance  of  your  PMP  Certification   Continuing  Certification  Requirements   •  PMP  Credential  Holders  must  earn  60  Professional  Development  Units  per  3   year  cycle  to  maintain  the  credential   •  This  course,  Fundamentals  of  Project  Cost  Management,  is  worth  1.5  PDUs   •  At  the  end  of  the  course,  we  will  review  how  to  claim  these  PDUs  on  the  PMI   Website   2   Copyright  ©  2013  Mass  Construction  School   Based  on  A  Guide  to  the  Project  Management  Body  of  Knowledge®  Fifth  Edition     PMI  and  PMBOK®  Guide  are  registered  marks  of  Project  Management  Institute,  Inc.  
3. Fundamentals  of  Project  Cost  Management   Course  Overview   The  purpose  of  this  course  is  to  review  the  Project  Cost  Management   Processes  and  terminology  as  described  in  the  Project  Management  Body  of   Knowledge  (PMBOK®  Guide)   We  as  Project  Managers  realize  that  each  project  is  managed  differently  while   encountering  countless  variables.    This  short  course  was  designed  to  realign   our  Project  Management  Techniques  with  the  PMBOK®  Guide     3   Copyright  ©  2013  Mass  Construction  School   Based  on  A  Guide  to  the  Project  Management  Body  of  Knowledge®  Fifth  Edition     PMI  and  PMBOK®  Guide  are  registered  marks  of  Project  Management  Institute,  Inc.  
4. Project  Cost  Management   •  This  Knowledge  Area  covers:   •  Planning   •  Estimating   •  Budgeting   •  Financing   •  Funding   •  Managing   •  Controlling  costs   4   Copyright  ©  2013  Mass  Construction  School   Based  on  A  Guide  to  the  Project  Management  Body  of  Knowledge®  Fifth  Edition     PMI  and  PMBOK®  Guide  are  registered  marks  of  Project  Management  Institute,  Inc.  
5. Cost  Management  Processes   •  Plan  Cost  Management   •  Estimate  Costs   •  Determine  Budget   •  Control  Costs   5   Copyright  ©  2013  Mass  Construction  School   Based  on  A  Guide  to  the  Project  Management  Body  of  Knowledge®  Fifth  Edition     PMI  and  PMBOK®  Guide  are  registered  marks  of  Project  Management  Institute,  Inc.  
6. Process  1  -­‐  Plan  Cost  Management   •  Establishes  policies,  procedures,  and  documentation  for  planning,   managing,  expending,  and  controlling  project  costs.   •  Could  be  done  by  a  single  person  on  small  projects   •  Early  scope  definition  allows  greater  influence  on  cost  for  entire  project   •  In  some  organizations  done  outside  project.  In  others,  within  project.   6   Copyright  ©  2013  Mass  Construction  School   Based  on  A  Guide  to  the  Project  Management  Body  of  Knowledge®  Fifth  Edition     PMI  and  PMBOK®  Guide  are  registered  marks  of  Project  Management  Institute,  Inc.  
7. Plan  Cost  Management  -­‐  Inputs   •  Project  Management  Plan   •  Scope  Baseline   •  Schedule  Baseline   •  Other  Info   •  Project  Charter   7   Copyright  ©  2013  Mass  Construction  School   Based  on  A  Guide  to  the  Project  Management  Body  of  Knowledge®  Fifth  Edition     PMI  and  PMBOK®  Guide  are  registered  marks  of  Project  Management  Institute,  Inc.  
8. Plan  Cost  Management  –  Inputs  Cont’d   •  Enterprise  Environmental  Factors   •  Organizational  Culture   •  Market  Conditions   •  Exchange  Rates   •  Commercial  Info   •  Project  Management  Information  System   8   Copyright  ©  2013  Mass  Construction  School   Based  on  A  Guide  to  the  Project  Management  Body  of  Knowledge®  Fifth  Edition     PMI  and  PMBOK®  Guide  are  registered  marks  of  Project  Management  Institute,  Inc.  
9. Plan  Cost  Management  –  Inputs  Cont’d     •  Organizational  Process  Assets   •  Financial  Controls   •  Historical  Info   •  Databases   •  Existing  Info   9   Copyright  ©  2013  Mass  Construction  School   Based  on  A  Guide  to  the  Project  Management  Body  of  Knowledge®  Fifth  Edition     PMI  and  PMBOK®  Guide  are  registered  marks  of  Project  Management  Institute,  Inc.  
10. Plan  Cost  Management   Tools  and  Techniques   • Expert  Judgment   • Analytical  Techniques   • Meetings   10   Copyright  ©  2013  Mass  Construction  School   Based  on  A  Guide  to  the  Project  Management  Body  of  Knowledge®  Fifth  Edition     PMI  and  PMBOK®  Guide  are  registered  marks  of  Project  Management  Institute,  Inc.  
11. Plan  Cost  Management  -­‐  Outputs   •  Cost  Management  Plan   •  Units  of  Measure   •  Level  of  Precision   •  Level  of  Accuracy   •  Organization  Procedure  Links   •  Control  Thresholds   •  Rules  of  Performance  Measurement   •  Sets  Earned  Value  Management  (EVM)  rules 11   Copyright  ©  2013  Mass  Construction  School   Based  on  A  Guide  to  the  Project  Management  Body  of  Knowledge®  Fifth  Edition     PMI  and  PMBOK®  Guide  are  registered  marks  of  Project  Management  Institute,  Inc.  
12. Plan  Cost  Management  –  Outputs  Cont’d   •  Cost  Management  Plan   •  Reporting  Format   •  Process  Descrip:ons •  Recording  Procedure 12   Copyright  ©  2013  Mass  Construction  School   Based  on  A  Guide  to  the  Project  Management  Body  of  Knowledge®  Fifth  Edition     PMI  and  PMBOK®  Guide  are  registered  marks  of  Project  Management  Institute,  Inc.  
13. Process  2  -­‐  Estimate  Costs   •  Develops  an  approximation  of  monetary  resources  for  project.   •  Expressed  in  currency   •  Best  estimate  at  a  current  point  in  time   •  Provides  guidance  and  direction  on  cost  management   •  Establishes:   •  Policies   •  Procedures     •  Documentation   …for  planning,  managing,  expending  and  controlling  project  costs.   13   Copyright  ©  2013  Mass  Construction  School   Based  on  A  Guide  to  the  Project  Management  Body  of  Knowledge®  Fifth  Edition     PMI  and  PMBOK®  Guide  are  registered  marks  of  Project  Management  Institute,  Inc.  
14. Estimate  Costs  -­‐  Inputs   •  Cost  Management  Plan   •  Human  Resource  Management  Plan   •  Scope  Baseline   •  Project  Scope  Statement   •  Work  Breakdown  Structure   •  WBS  Dictionary   •  Project  Schedule   14   Copyright  ©  2013  Mass  Construction  School   Based  on  A  Guide  to  the  Project  Management  Body  of  Knowledge®  Fifth  Edition     PMI  and  PMBOK®  Guide  are  registered  marks  of  Project  Management  Institute,  Inc.  
15. Estimate  Costs  –  Inputs  Cont’d   •  Risk  Register   •  Enterprise  Environmental  Factors   •  Market  Conditions   •  Commercial  Info   •  Organizational  Process  Assets     •  Cost  Estimating  Policies  and  Templates   •  Historical  Info  and  Lessons  Learned   15   Copyright  ©  2013  Mass  Construction  School   Based  on  A  Guide  to  the  Project  Management  Body  of  Knowledge®  Fifth  Edition     PMI  and  PMBOK®  Guide  are  registered  marks  of  Project  Management  Institute,  Inc.  
16. Estimate  Costs  –  Tools  and  Techniques   • Expert  Judgment   • Analogous  Estimating     • Parametric  Estimating   • Bottom-­‐up  Estimating   • Three-­‐Point  Estimating   •  Most  Likely  (ML),  Optimistic  (O),  Pessimistic  (P)   •  Triangular  Distribution  –  Average  of  3  Cases   •  Beta  Distribution  –  (O  +  4ML  +  P)/6   16   Copyright  ©  2013  Mass  Construction  School   Based  on  A  Guide  to  the  Project  Management  Body  of  Knowledge®  Fifth  Edition     PMI  and  PMBOK®  Guide  are  registered  marks  of  Project  Management  Institute,  Inc.  
17. Estimate  Costs  –  Tools  and  Techniques  Cont’d   • Reserve  Analysis   • Cost  of  Quality     • Project  Management  Software   • Vendor  Bid  Analysis   • Group  decision-­‐making  techniques   17   Copyright  ©  2013  Mass  Construction  School   Based  on  A  Guide  to  the  Project  Management  Body  of  Knowledge®  Fifth  Edition     PMI  and  PMBOK®  Guide  are  registered  marks  of  Project  Management  Institute,  Inc.  
18. Estimate  Costs  -­‐  Outputs   •  Activity  Cost  Estimates   •  Basis  of  Estimates   •  How  Developed   •  Assumptions  Made   •  Known  Constraints   •  Range  +/-­‐  or  Possible  Outcomes   •  Confidence  Level   •  Project  Documents  Updates  (Risk  Register)   18   Copyright  ©  2013  Mass  Construction  School   Based  on  A  Guide  to  the  Project  Management  Body  of  Knowledge®  Fifth  Edition     PMI  and  PMBOK®  Guide  are  registered  marks  of  Project  Management  Institute,  Inc.  
19. Process  3  -­‐  Determine  Budget   •  Aggregates  estimates  of  individual  activities/work  packages  for   authorization   •  Used  for  Monitoring  and  Controlling  costs   19   Copyright  ©  2013  Mass  Construction  School   Based  on  A  Guide  to  the  Project  Management  Body  of  Knowledge®  Fifth  Edition     PMI  and  PMBOK®  Guide  are  registered  marks  of  Project  Management  Institute,  Inc.  
20. Determine  Budget  -­‐  Inputs   •  Cost  Management  Plan   •  Scope  Baseline   •  Activity  Cost  Estimate   •  Basis  of  Estimates   •  Project  Schedule   •  Resource  Calendars   •  Risk  Register   •  Agreements   •  Organizational  Process  Assets   20   Copyright  ©  2013  Mass  Construction  School   Based  on  A  Guide  to  the  Project  Management  Body  of  Knowledge®  Fifth  Edition     PMI  and  PMBOK®  Guide  are  registered  marks  of  Project  Management  Institute,  Inc.  
21. Determine  Budget  –  Tools  and  Techniques   •  Cost  Aggregation   •  Reserve  Analysis   •  Expert  Judgment   •  Historical  Relationships   •  Funding  Limit  Reconciliation   21   Copyright  ©  2013  Mass  Construction  School   Based  on  A  Guide  to  the  Project  Management  Body  of  Knowledge®  Fifth  Edition     PMI  and  PMBOK®  Guide  are  registered  marks  of  Project  Management  Institute,  Inc.  
22. Determine  Budget  -­‐  Outputs   •  Cost  baseline   •  Approved  version  of  time-­‐phased  project  budget   •  Does  not  include  management  reserves   •  Project  Funding  Requirements   •  Project  Documents  Updates   •  Risk  Register   •  Activity  Cost  Estimates   •  Project  Schedule   22   Copyright  ©  2013  Mass  Construction  School   Based  on  A  Guide  to  the  Project  Management  Body  of  Knowledge®  Fifth  Edition     PMI  and  PMBOK®  Guide  are  registered  marks  of  Project  Management  Institute,  Inc.  
23. Process  4  -­‐  Control  Costs   •  Factor  Influence   •  Change  Requests   •  Actual  Changes   •  Cost  Expenditures   •  Cost  Performance   23   Copyright  ©  2013  Mass  Construction  School   Based  on  A  Guide  to  the  Project  Management  Body  of  Knowledge®  Fifth  Edition     PMI  and  PMBOK®  Guide  are  registered  marks  of  Project  Management  Institute,  Inc.  
24. Process  4  -­‐  Control  Costs  Cont’d   •  Work  Performance   •  Unapproved  Changes   •  Stakeholder  Communication   •  Cost  Overruns   24   Copyright  ©  2013  Mass  Construction  School   Based  on  A  Guide  to  the  Project  Management  Body  of  Knowledge®  Fifth  Edition     PMI  and  PMBOK®  Guide  are  registered  marks  of  Project  Management  Institute,  Inc.  
25. Control  Costs  -­‐  Inputs   •  Project  Management  Plan   •  Project  Funding  Requirements   •  Work  Performance  Data   •  Organizational  Process  Assets   25   Copyright  ©  2013  Mass  Construction  School   Based  on  A  Guide  to  the  Project  Management  Body  of  Knowledge®  Fifth  Edition     PMI  and  PMBOK®  Guide  are  registered  marks  of  Project  Management  Institute,  Inc.  
26. Control  Costs  –  Tools  and  Techniques   •  Earned  Value  Management   •  Planned  Value  (PV)   •  Earned  Value  (EV)   •  Actual  Cost  (AC)   •  Schedule  Variance  (SV)   •  Cost  Variance  (CV)   •  Schedule  Performance  Index  (SVI)   •  Cost  Performance  Index  (CPI)   26   Copyright  ©  2013  Mass  Construction  School   Based  on  A  Guide  to  the  Project  Management  Body  of  Knowledge®  Fifth  Edition     PMI  and  PMBOK®  Guide  are  registered  marks  of  Project  Management  Institute,  Inc.  
27. Control  Costs  –  Tools  and  Techniques  (cont.)   •  Forecasting   •  Estimate  at  Completion  for  Budgeted  Rate  (EAC)   •  Estimate  to  Completion  for  Current  CPI  (ETC)   •  Estimate  to  Completion  using  both  CPI  &  SPI  (ETC)   •  To-­‐Complete  Performance  Index  (TCPI)   •  How  well  must  the  project  perform,  cost-­‐wise,  in  order  to  met  a   cost  goal?   27   Copyright  ©  2013  Mass  Construction  School   Based  on  A  Guide  to  the  Project  Management  Body  of  Knowledge®  Fifth  Edition     PMI  and  PMBOK®  Guide  are  registered  marks  of  Project  Management  Institute,  Inc.  
28. Control  Costs  –  Tools  and  Techniques  (cont.)   •  Performance  Reviews   •  Variance  Analysis   •  Trend  Analysis   •  Earned  Value  Performance   •  Project  Management  Software   •  Reserve  Analysis   28   Copyright  ©  2013  Mass  Construction  School   Based  on  A  Guide  to  the  Project  Management  Body  of  Knowledge®  Fifth  Edition     PMI  and  PMBOK®  Guide  are  registered  marks  of  Project  Management  Institute,  Inc.  
29. Control  Costs  -­‐  Outputs   •  Work  performance  information   •  CV,  SV,  CPI,  SPI,  TCPI,  VAC   •  Cost  Forecasts   •  EAC     •  Calculated  or  Bottoms-­‐up   •  Change  Requests   •  Project  Management  Plan  Updates   •  Project  Documents  Updates   •  Organizational  Process  Assets  Updates   29   Copyright  ©  2013  Mass  Construction  School   Based  on  A  Guide  to  the  Project  Management  Body  of  Knowledge®  Fifth  Edition     PMI  and  PMBOK®  Guide  are  registered  marks  of  Project  Management  Institute,  Inc.  
30. Summary   •  We  have  covered  the  4  Processes  of  Project  Cost  Management   •  Cost  Management  is  a  key  aspect  of  Project  Management.    It  involves  the   initial  development  of  the  project  estimate,  development  of  the  budgets  for   individual  work  packages  of  the  projects  and  cost  control/monitoring  of  the   developed  budgets.     30   Copyright  ©  2013  Mass  Construction  School   Based  on  A  Guide  to  the  Project  Management  Body  of  Knowledge®  Fifth  Edition     PMI  and  PMBOK®  Guide  are  registered  marks  of  Project  Management  Institute,  Inc.  
31. Short  Quiz  and  Survey   •  After  this  course  is  completed,  you  will  be  directed  to  a  10  question  quiz   covering  some  of  the  key  aspects  of  Project  Cost  Management   •  You  will  then  be  directed  to  a  short  survey  so  we  can  obtain  feedback  and   improve  the  short  course   •  After  completion  of  the  quiz  and  the  survey,  you  will  receive  a  Certificate  of   Completion  and  be  able  to  claim  your  PDUs     31   Copyright  ©  2013  Mass  Construction  School   Based  on  A  Guide  to  the  Project  Management  Body  of  Knowledge®  Fifth  Edition     PMI  and  PMBOK®  Guide  are  registered  marks  of  Project  Management  Institute,  Inc.  
32. Claiming  your  PDUs   •  Login  to  PMI   •  Hover  over  Certification   •  Select  “Maintain  your  Certification;  Earn  and  Report  PDUs”   •  Click  “Report  PDUs”   •  Under  PDU  Category,  select  “Cat  A  –  Registered  Education  Provider/PMI  Component”   •  Under  Activity  Type,  select  “Find  an  Activity  (Course  or  Event),  then  click  Next   •  Enter  3853  (Mass  Construction  School  ID)  into  the  “Provider  Number”   •  Select  the  Activity  (Fundamentals  of  Project  Scope  Management)   •  Enter  Date  Started  and  Date  Completed   •  Enter  3  in  the  PDUs  Claimed   •  Click  the  box  that  states  “I  agree  this  claim  is  accurate”   •  Click  Submit     32   Copyright  ©  2013  Mass  Construction  School   Based  on  A  Guide  to  the  Project  Management  Body  of  Knowledge®  Fifth  Edition     PMI  and  PMBOK®  Guide  are  registered  marks  of  Project  Management  Institute,  Inc.