Agenda' HR and Bus' program

1
Agenda. HR and Bus. program

• Estimates, costs, budgets, forecasts, variances
  and control
• Resource allocation and leveling
• Guest Speaker Bob Stanley - Friday
• Scope control
• Monitoring and Control Forms, Reporting
• Final Project in class group work - review docs
  submitted by Team Members

2
Learning Objectives

• Deciding which items to include when estimating
  cost
• Preparing a baseline budget
• Cumulating actual costs - dont wait to the end
• Determining the Earned Value of work performed
• Analyzing cost performance
• Forecasting project cost at completion
• Controlling project costs
• Managing cash flow

3
Cost Planning Ch. 9, Gido and Clements

• Hygeia Travel Health, case p. 253
• Note their criteria for project evaluation
• Raise revenue, cut costs, customer retention
• Costs are estimated first before the projects are
  approved - method contributes to their success
• The costs help establish a Baseline budget
• This helps them control during execution
• These pages include estimating methods

4
RWD Technologies case. P. 266

• Whose1 second 100,000?
• Job training reduced to days from weeks
• ERP implementations -what is ERP?
• Web based applications for document management -
  give a personal example in class

5
Estimates (planning) costs, know these terms and
methods

• Top down - executive and management driven/levels
  of accuracy
• 1. Ball park (first time, rough)
• 2. Order of Magnitude (historical, analogous -
  accurate)
• 3. Phased (unsure of future development)
• Bottom up - Team members and Supervisors from
  the WBS
• 4. Parametric estimates (know individual
  prices, accurate)
• 5. Detailed (team member, accurate)
• Iteration is the process of used to reconcile
  differences between management and others

6
Top down vs. bottom up - estimating

• Top down
• Top down -

• Bottom up
• Bottom up -

7
Monitoring controlling costs, checking for
variances

• Monitor - check cumulative amount spent at any
  time point - do planned checks.
• Compare (analyze) above to the budgeted amounts,
  baselines. Select methods. E.g. CV, CPI
• Control - correct and reforecast final
• Communicate changes

8
Methods of analysis. Manual or computerized

• Earned Value. Budgeted cost x of completion
• Cost Performance indicator (CPI) EV/AC (Actual
  Cost)
• Cost Variance CV EV-Actual Cost
• Schedule Variance SV, above can be used to
  calculate time as or

9
Applied learning - calculate. Use Student Loan?
Use text book format, p. 262 on
Your loan /-

• Book
• /-

• Collect data
• Total budget amount
• Cumulative budget amount
• Cumulative actual spent
• Earned value. of completion to budget
• Earned value
• Cost Performance CPI
• Cost variance

10
MS Project - forms related to the lecture

• Resource sheet
• Cost table and graphs
• Work tasks and package costs
• Summaries
• Reports
• Cash flow
• Cost Variance
• Earned value

• Use handout for links

11
Review questions - this weeks lecture

• Pros and cons of Top Down vs. Bottom up est.
• Calculate Earned Value?
• Why draw graphs of actual results?
• Describe relationship of estimate to WBS
• Describe baseline, budgets, cost estimates,
  forecasts, cash flow
• Understand cumulative e.g. estimates/baseline
• How would you get back on budget?
• Which work packages would you focus on?

12
Home assignment

• Work with Group. Next week hand into your Project
  Manager
• Your estimates for all your work packages- time
  and materials from all sources on a MS Project
  form or XL
• Submit other specified documents as per your
  Project Manager - discuss
• 2 marks for above if PM approves