Project Cost Management

Project Cost Management

Other considerations:
Though in many application areas, predicting and analyzing the prospective financial performance of the project’s product is done outside of the project, in others, it is included in Project Cost Management:
For example:  Capital Facilities Projects
In this case, Project Cost Management will draw on other general management areas:

• Return on Investment (ROI)
• Discounted Cash Flow
• Investment Payback Analysis

Project Cost Management must consider the needs of the stakeholders who may measure costs in different ways and at different times.
The Develop Project Management Plan process produces a Cost Management Plan that sets out the format and established the criteria for planning, structuring, estimating, budgeting and controlling project costs.

Cost Aggregation:

Schedule activity cost estimates are aggregated by work package in accordance with the WBS

In turn, work package estimates are further aggregated according to schedule structure or other parameters, such as control account, and ultimately for the entire project.

Reserve analysis:

Establishes contingency and management reserves, i.e. allowances for unplanned, but potentially required, changes (see next slide)

Parametric Estimating:

Described in Cost Estimating

Funding Limit Reconciliation:

Since large variations on periodic expenditures are undesirable for organizational operations, the project expenditure of funds is reconciled with funding limits set by the customer or performing organization

May necessitate the scheduling of work to be smoothed and adjusted to limit expenditures in certain periods

Involves setting date constraints and iteratively re-scheduling and budgeting

Requested Changes

Budget increases or decreases can be identified from the analysis of performance – processed for review and disposition through the Integrated Change Control process

Recommended Corrective Actions

Anything done to bring future project performance back in line with the project management plan

In cost management, can involve adjusting schedule activity budgets to fund actions to address cost variances

Updates to Organizational Process Assets

Documentation of lessons learned linked to root cause of variances and corrective actions taken

Updates to Project Management Plan

Schedule activity, work packages or planning package cost estimates

Cost baselines or cost management plan

Approved changes are integrated to the project management plan

Project Communications Management

Project Communications Management

“The processes used in the exchange of information. “
90% Of project manager’s job
Affects every part of a project
Can make or break a project
Employed by everyone involved

We Retain/Absorb:

10% Of What We Read

20% Of What We Hear

30% Of What We Read and Hear

50% Of What We Discuss With Others

80% Of What We Experience

90% Of What We Teach to Others

Anything that distorts, distracts or otherwise causes the message to lose its original meaning:

• Language
• Culture
• Semantics
• Intelligence/Knowledge Level
• Message Content
• Authority/Reputation
• Emotional Status

Art of Communication

The art of communication is a broad subject and involves a substantial body of knowledge including:

• Sender - receiver models: Feedback loops and barriers to communication
• Choice of media: When to communicate and how, informal vs formal, face-to-face vs e-mail.
• Writing style:  Active versus passive voice, sentence structure and word choice
• Presentation techniques: Body language and design of visual aids
• Meeting management techniques: Preparing an agenda and dealing with conflict

Project Cost Analogous Estimating Technic

Project Cost Analogous Estimating Technic 

Analogous cost estimating means using the actual cost of previous, similar projects as the basis for estimating the cost of the current project. Analogous cost estimating is frequently used to estimate costs when there is a limited amount of detailed information about the project (e.g., in the early phases). Analogous cost estimating uses expert judgment.

Analogous cost estimating is generally less costly than other techniques, but it is also generally less accurate. It is most reliable when previous projects are similar in fact, and not just in appearance, and the persons or groups preparing the estimates have the needed expertise.

Critical Chain Method network analysis technique

Critical Chain Method network analysis technique 

Critical chain is another schedule network analysis technique that modifies the project schedule to account for limited resources. Critical chain combines deterministic and probabilistic approaches. Initially, the project schedule network diagram is built using non-conservative estimates for activity durations within the schedule model, with required dependencies and defined constraints as inputs. The critical path is then calculated. After the critical path is identified, resource availability is entered and the resource-limited schedule result is determined. The resulting schedule often has an altered critical path.

The critical chain method adds duration buffers that are non-work schedule activities to maintain focus on the planned activity durations. Once the buffer schedule activities are determined, the planned activities are scheduled to their latest possible planned start and finish dates. Consequently, in lieu of managing the total float of network paths, the critical chain method focuses on managing the buffer activity durations and the resources applied to planned schedule activities.

A CEO’s demand for Information

A CEO’s demand for Information

To manage the business, CEO requires up to date information like :

• Amount due from customers and payments receivable in a week
• Payments due to vendors, employees and statutory requirements
• Orders in hand for execution
• Finished good stock for delivery to customer orders
• Material to be procured for production to full fill customer orders
• Fund flow statement

Realities of IT in Businesses

Realities of IT in Businesses

• 
  
• IT investment is affordable and PCs are just best used  for office automation
• Tendency to develop applications for the functional needs
• Data entered more than once creates inconsistencies between functions
• Data gets fragmented over islands of functions

PMP Fees Structure

PMP Fees Structure

• Project Management Professional (PMP®)
• Initial Certification Fee – member of PMI in good standing US$405
• Initial Certification Fee – non member of PMI US$555
• Re-Examination Fee – member of PMI in good standing $275
• Re-Examination Fee – non member of PMI US$ 375

(May Change, Please Verify )

What is a PDU?

What is a PDU?

The Professional Development Unit (PDU) is the measuring unit used to quantify approved learning and professional service activities. Typically, one PDU is earned for every one hour spent in a planned, structured learning experience or activity. Fractions of PDU’s may be reported in 0.25 increments following one full hour.

How to maintain your PMP certification?

How to maintain your PMP certification?


Comply with PMI Code of Professional Conduct
A minimum of 60 Professional Development Units (PDU’s) must be accrued every 3 years. The PDP cycle begins January 1 of the year following initial certification.

Criteria for PMP certification

Criteria for PMP certification

To be eligible for the PMP certification, you must first meet specific education and experience requirements and agree to adhere to a code of professional conduct. The final step in becoming a PMP is passing a multiple-choice examination designed to objectively assess and measure your project management knowledge. This computer-based examination is administered globally. In addition, those who have been granted the PMP credential must demonstrate an ongoing professional commitment to the field of project management by satisfying PMI’s Continuing Certification Requirements Program

Benefits of PMP certification Corporate-wide

Benefits of PMP certification Corporate-wide

• Increase the level of professionalism in Project Management
• Creates a cultural Shift in Project Management
• More Productive Project Teams
• Organizational Improvements
• Profitability Improvements
• Increased Communication
• Standardization of processes and practices
• Provides a focused project critical success factors
• Optimization of project/program activities
• Increase customer satisfaction

WHY PMP (personal level)?

WHY PMP (personal level)?

• Increased marketability and job opportunities inside and outside the organization
• It serves as a mean for personal and professional recognition which will help to grow faster within your organization
• Adds emphasis on continuous learning and the need to update your PM knowledge by attending seminars and workshops

Project Management Certification PMP

Project Management Certification PMP

Today, there are Worldwide, over 75,000 Project Management Professionals (PMPs) who provide services in 150 countries. PMI is more than just a volunteer professional organization, we are an industry authority. Many companies are requiring PMP credentials for individual advancement or for employment.

The PMP is by far the project management credential of choice across a vast array of industries and companies. By attaining the PMP credential, your name will be included in the largest and most prestigious group of certified professionals in the project management community.

Overview of Exam Questions of PMP, Examination Question pattern of PMP

Overview of Exam Questions of PMP, Examination Question pattern of PMP

The format of the test is multiple-choice, with four (4) answer choices per question. The questions come from
the following Process Groups plus Professional Responsibility:

PMP ?s PMP % CAPM ?s CAPM %
Project Initiation 23 11.6% 14 9.3%
Project Planning 45 22.7% 33 22.0%
Project Execution 55 27.5% 40 26.7%
Project Monitoring 42 21.0% 32 21.3%
Project Closing 17 8.6% 14 9.3%
Professional and Social Responsibility 17 8.6% 17 11.3%
Total 200 100% 150 100%
Passing 106 of 175 60.5% 86 of 150 57%

Time Limit 4 Hours 3 Hours

Examination Fees of PMP Exam

Exam Fee
PMP
Initial Certification Fee (member of PMI) $405.00
Initial Certification Fee (non-member of PMI) $555.00
Re-examination Fee (member of PMI) $275.00
Re-examination Fee (non-member of PMI) $375.00

CAPM
Initial Certification Fee (member of PMI) $255.00
Initial Certification Fee (non-member of PMI) $300.00
Re-examination Fee (member of PMI $150.00
Re-examination Fee (non-member of PMI $220.00

PMI Membership Fee
Annual PMI Membership Fee $119.00

CAPM Exam Requirements

The requirements to take the Certified Associate in Project Management (CAPM) exam are listed in the CAPM Handbook located on PMI’s website at
http://www.pmi.org/prod/groups/public/documents/info/PDC_CAPM.asp. The CAPM certification is a newer certification; currently, approximately 1,500 people have attained the CAPM certification (as of October 2006). It is designed for practitioners who do not have enough PM work experience to meet the PMP qualifications, yet still allows them to obtain some sort of certification while they are gaining the necessary experience.
Applicants with a high school diploma or equivalent must meet the following requirements:
• Minimum 1,500 hours of work on a project team
OR
• Minimum 23 contact hours of PM instruction

As with the PMP process, once your application has been approved, PMI will send an authorization letter, allowing you to schedule your exam. Once the authorization letter is received, you has one year to take the exam.

PMP Exam Requirements

While the requirements necessary to be eligible to take the PMP exam are listed on PMI’s website at http://www.pmi.org/prod/groups/public/documents/info/pdc_pmp.asp, they are also covered here to provide all the pertinent information condensed and in one place. This site provides a PDF of the PMP Handbook, which contains the requirements to qualify to take the PMP exam and the application form. Even if you intend to submit your application on-line, which is the preferred method, I suggest using the paper form to compile and organize the information beforehand. Once it is compiled, actual entry of the information goes very quickly.
Applicants with a bachelor’s degree or global equivalent must meet the following requirements (a masters degree or higher does not decrease the following requirements):
• Minimum 4,500 hours PM experience
• Minimum 36 months PM experience within the prior 72 months
• Minimum 35 contact hours of PM instruction


Applicants who do not have a bachelor’s degree, but instead have a high school diploma, associate’s degree, or global equivalent, must meet the following requirements (notice the only real change is to increase the PM experience needed and, of course, the time allowed to get that experience):
• Minimum 7,500 hours PM experience
• Minimum 60 months PM experience within the prior 96 months
• Minimum 35 contact hours of PM instruction
Contact hours can be obtained through a university or college, by a course offered by a PMI-recognized Registered Education Provider (REP) such as Global Knowledge, by employee-sponsored classes, or by a training company or consultant.
Some potential applicants misunderstand the requirement for PM experience. This includes not only experience as a Project or Program Manager, but also experience working on projects from other vantage points, such as in the role of a team member, Subject Matter Expert (SME), Sponsor, etc. PMI’s newer terminology states that candidates have experience leading and directing project tasks, the details of which are explained in the PMP Application section below.

You are performing a project management audit in your company and find that most of the project plans are neither consistent nor up-to-date.

You are performing a project management audit in your company and find that most of the project plans are neither consistent nor up-to-date.
Which of the following statements is not true?

• Projects should never be executed without a valid, updated and working project plan.
• The project plan is secondary because it is only the results that matters.
• A great deal of effort is required to develop and update a project plan, but the benefits include less pressure on all stakeholders and a resulting product that will satisfy the requirements.
• Poor planning is one of the major reasons for cost and time overruns.

What is sometimes referred to as Global Literacies?

What is sometimes referred to as Global Literacies?

• The ability to read reports written in many different languages.

• The ability to succeed in a cross cultural environment.

• The ability to develop internationally accepted contracts.

• The ability to communicate using drawings and pictograms which are understood all over the world.

With your team you are using judgment from subject matter experts to identify and analyze project risks. There is a small number of experts available,

With your team you are using judgment from subject matter experts to identify and analyze project risks. There is a small number of experts available, but some of them have long been in a teacher-student or manager-assistant relationship.
Which of the following techniques can ensure best that there is no dominating opinion during an expert review?

• Peer review
• SWOT analysis
  
• Delphi technique
  
• Monetary value calculation