...Project Management is the overall planning, coordination, and control of a project from start to finish in order to deliver a function or a product that meets the client requirement within the allocated budget” (International Construction Project Management, 2003). In today’s world, construction management is becoming more complex and bigger in size (Favie & Maas, 2008). The emerging complexity in the construction industry has led to the need of an effective project control methods to deliver project on time and within budget specially that the construction industry is known as a highly dynamic industry were each project is unique and has its own characteristic. Nevertheless, the construction industry is known as...
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...EVM, Real World Benefits, Myths and Facts Earned value management (EVM) is a project measurement tool that organizations use, along with project management best practices, to provide a realistic assessment of project performance (how much work has been accomplished) for the money consumed. Basically, EVM allows a comparison between actual and planned costs and schedules, thus, it is a useful tool to gauge a project current status (Venkataraman, 2008, p. 111). EVM enables an organization to detect a potential problem with the costs and scheduling of a project early and make appropriate adjustments to achieve project success. Earlier detection of potential problems allows project management to avoid pitfalls by pinpointing lapses in project health by providing early indicators of when vital components may go astray (Visitacion, 2007a, p. 75). EVM methodology gauges a project health by assessing three components; planned value, earned value, and actual cost. Furthermore EVM uses forward-looking capabilities to guide projects toward success. Although a very valuable tool, EVM is not a magical instrument that one can wave and expect it to produce desirable results 100% of the time, it requires the human touch, people with prior management knowledge, in order weigh the data (analysis) that EVM produces to gauge a project status, strengths, weaknesses, budget compliance. Perhaps the most important purpose of EVM is risk management or minimalizing risks that may be associated...
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...ESTIMATES 6 INDIRECT COSTS 8 EARLY PROJECT MONITORING 9 WHY NOT EARNED VALUE MANAGEMENT 10 CONCLUSION 12 REFERENCES 13 Company Information Type of Company Enterprise Communications is a department within Consolidated Services Inc., a federal government agency that provides a variety of communication services. Their mission is to facilitate the timely and cost effective delivery of high quality information and ensuring that this information is readily available to citizens via the internet and social media. They are also responsible for researching, testing and implementation of improved electronic communication across the department and other federal agencies. It is comprised of various federal agencies across the United States and abroad that depend on their services to function. Company Strategic Goals Ensure a 90% accuracy rate as it relates to up-to-date information Reduce information redundancy among federal agencies Research and implement new avenues of communication Provide timely and cost-effective ways to meet previously stated objectives Situational Summary The three targets of any project are scope, time, and cost. Currently many projects are over budget and behind schedule causing frustration among the employees, contractors, and stakeholders. Other agencies and outside organizations offer some of these same services, therefore; it is imperative that these issues are corrected in order to stay competitive. Project cost estimates and scheduling...
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...Cost and Value Management Cost and value management is a very important part of project management. Cost and value management is an important part of project management because in order for a project manager to complete a job successfully they must be able to manage the cost of the project and be able to create and increase the value of the project. This paper will discuss the importance of work packages to support the creation and the use of WBS and how to establish a cost and schedule performance measurement baseline. This paper will also show examples of earned value management and how EVM will help a project manager to understand project statuses. This paper will also discuss how a project manager uses project control charts to show project status and represent value and describe an effective change management process to ensure a successful project. Work Packages Support A work package is part of the work breakdown structure which lets the project manager define tasks at the same level. The work packages are an important part of supporting the creation and in using the work breakdown structure because without it there is no way of telling what the subdeliverable level of a WBS includes. The work packages would include the start and finish date of each point, a budget for each section if needed and it helps to keep track of what has been done and what still needs to be done (Filicetti, 2011). An example of just how important a work package is important to a work breakdown...
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...jobs usually directed toward some major output and requiring a significant period of time to perform. Project management can be defined as planning, directing, and controlling resources (people, equipment, and material) to meet the technical, cost, and time constraints of the project. According to "What Is Project Management" (2014), “ Project management processes fall into five groups: •Initiating -in this stage of project management, the goals and objective of the project are identified. This phase also involves setting expectations and knowing what the end product would be. All the stakeholders in a project including the project manager, business executive, and client (if applicable) must be involved in defining the project. •Planning- after the goal has been identified, the next step is to think how the objective is best accomplished. This includes designating people to appropriate roles, allocating resources, and setting milestones. The project manager should also analyze how long each task will take to complete and how it will affect the deadline. Additional staff can be assigned to work at the critical points of the project if this is required. •Executing- this phase involves implementing the plan that has been created by the project manager and other stakeholders. The project manager has to manage the project constraints such as the budget, people, schedule, and project scope effectively. Each team member must start working on the tasks that were assigned to them. ...
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...It Management Mgt2 Task 3 | MGT2 Task 3-B | | Xemba Translations Jade Lewis May 7, 2014 Task 3- A The following are risks that are determined after a new risk assessment was conducted. Coming into the project after it started led to more risk assessment then a complete metrics review. Risks identified for Xemba Translations Telecommuters project Risk 1 Time Time is a risk for this project on several levels. 173 employees this will be affected as well as their customers. The company has agreed that this is a good move, however, if the process of setting up the equipment, managing the security and providing training goes on too long, then it will start to negatively affect the company over-all. Currently there is concern if the technology will be delivered due to an unforeseen fire, this set back will be costly in time and work. Also, a second part of time being a risk is managing faulty or dying equipment. Home offices will take longer to assess and fix in the long run. IT staff will either have travel to employee’s homes, or employees will be held up having to come into the home office for repairs. The impact is serious due to the fact it would reduce the amount of work completed, uses valuable resources that are required on-site, or lead to cost of hiring a separate support staff for the telecommuters. Initial action...
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...Helpful Tools for Project Management Christopher Benson INF 337: Integrate Cost & Schedule Control Instructor: Shane Lauber September 22, 2014 The past 30 years have witnessed a dramatic increase in the number and variety of organizations engaged in project-based work. In addition to “traditional” project-oriented industries, like construction, aerospace, and pharmaceuticals, service industries as diverse as finance, utilities, telecommunications, and insurance are beginning to embrace project based ventures. This paradigm shift is due to growing recognition that projects and their effective management can provide organizations with a significant competitive edge through cost reduction, enhanced responsiveness, and overall value to customers. Consequently, a number of organizations have adopted many of the well-known techniques of project management, and professional project management organizations have witnessed marked increases in membership. Despite this enormous interest in projects and project management practices, success rates in many industries are at alarmingly low levels. In addition, bad news about high-profile projects continues to dominate the headlines – in both the public and private sectors (Venkataraman & Pinto, 2008). A lot of this bad news comes from the PM (Project Manager) not being educated on all the tools at his/her disposal to be better prepared to prevent the project from failing. In order for anything to succeed, it must...
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...SDSU GE/OM 569 Project Management 3 April 2013 Where are we now? PMBOK – 5th Edition (2013) 1 Executing, Monitoring & Controlling Executing Process group consists of those processes performed to complete the work defined in the project management plan to satisfy the project specifications. Results may require planning updates & rebaselining Large portion of budget is expended performing the execution process group 3 Executing, Monitoring & Controlling… The Monitoring & Controlling process group consists of those processes required to track, review & orchestrate the progress & performance of the project, identifying any areas in which changes to the plan are required and initiate the corresponding changes. What work does it monitor & control? Product work Project work 4 2 Executing, Monitoring & Controlling 5 Executing, Monitoring & Controlling 6 3 The Project is Up and Running: Now What? You want what? When! I have jury duty! The software doesn’t do that? That is not what I want! We have to be done by….! The software (critical) will be late! Why not add this?! You never asked for that?!? Just have your team do it! 7 Validate Scope 8 4 Validate Scope Validate Scope is the process of formalizing acceptance of the completed project deliverables. It includes… Reviewing deliverables with the customer or sponsor to ensure they are completed satisfactorily, and Obtaining their...
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...1. A-crash cost per day per activity is as follows A= $25 B=$75 C=$150 D=$25 B. Activities B,D should be crashed to meet the deadline C. The extra cost associated to crash the project is crash cost of B$75+crash cost of D$25=$100 2. A. Some of the basic requirements for the project plan in order for EVM to be able to work are: - A project plan that identifies work to be accomplished, a value of planned work or Planned Value (PV) or Budgeted Cost of Work Scheduled (BCWS), and defined Earned Value (EV) or Budgeted Cost of Work Performed (BCWP). EVM implementations can include indicators and forecasts of cost performance (over budget or under budget) and schedule performance (behind schedule or ahead of schedule). However, the basic requirements of using EVM is that it has progress using PV and EV. B. It is a process used to find variances in projects based on the comparison of worked performed and work planned. EVM is used on the cost and schedule control and can be very useful in project forecasting. Earned Value Management will let you know the actual state of the project by comparing your current project performance against your plan. Knowing the project's performance will let you take actions needed to ensure that the project is completed on time and within budget. Like any tool, in order for EVM to be successful, it very important that it is used correctly. 3. A. The resource conflict that occurs is between activity C and D between days 5-9. Both of these...
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...Cost Control in Design Process of China’s Construction Project Abstract As the ruthless competition in China’s construction industry, construction project requires a win-win method to acquire the maximal benefit and simultaneously to maintain the quality for keeping the place with the market. One method commended, cost control, especially in the design process, plays a very important role in the project procedure and financial management. This article presents the main implements of cost control utilizes in different aspects of construction and certain skills to control cost in design processes of construction project. These implements and skills could be very helpful for China’s construction companies to optimize their design process and offer beneficial influence to the following steps, increases the percentage of successful project in all projects; thereby to promote the development of the company and the whole industry. Key words: Design Process; Construction project; Cost control 1. Introduction Nowadays in China, the competition within construction industry is continuously increasing, and the profit spaces are limiting. As all the investment always expect for the maximal benefit, if a company want to keep the profit and position in the market in such complicated environment, the best method for it is applying cost control to the project. Cost control in financial management is an important aspect of project management over the whole life of projects. Successfully...
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...USING THE EARNED VALUE COST MANAGEMENT REPORT TO EVALUATE THE CONTRACTOR'S ESTIMATE AT COMPLETION David S. Christensen, Ph.D. College of Business Southern Utah University 351 West, Center Street Cedar City, UT 84720 Phone: (435)865-8058 Email: Christensend@suu.edu Published in Acquisition Review Quarterly (Summer 1999) BIOGRAPHY David S. Christensen is an Associate Professor of Accounting at Southern Utah University in Cedar City, Utah. After receiving a Ph.D. from the University of Nebraska in 1987, he joined the faculty at the Air Force Institute of Technology, where he taught undergraduate and graduate courses in earned value cost management for over ten years. David is a CPA, CMA, CGFM, and CCE/A, and is active in several professional associations, including the Society of Cost Estimating and Analysis, the American Accounting Association, and the Institute of Management Accounting. Presently, David serves as Associate Editor for the Journal of Cost Analysis. He has published extensively in the area of earned value cost management in Acquisition Review Quarterly, Project Management Journal, National Contract Management Journal, Journal of Parametrics, National Estimator, and the Journal of Cost Analysis. 2 USING THE EARNED VALUE COST MANAGEMENT REPORT TO EVALUATE THE CONTRACTOR'S ESTIMATE AT COMPLETION ABSTRACT The earned value cost management report is a valuable management tool for project managers. Its long association with earned value management...
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...Expert Reference Series of White Papers Tips and Techniques to ® Pass the PMP Exam 1-800-COURSESwww.globalknowledge.com Tips and Techniques to Pass the PMP® Exam Dan Stober, PMP Introduction Passing the Project Management Professional (PMP)® certification exam can seem like a daunting task when project managers first decide to take the leap. Just like a project management plan, if you carefully map out your study plan, you will be successful. You must understand several key concepts, be intimately familiar with the five process groups and ten knowledge areas, understand project management terminology, and learn to think like PMI. It is also important to set study goals, create a schedule for success, and commit fully to passing the exam in order to obtain your PMP® credential. Following the best practices outlined here can put you on the road to certification and will have you prepared for your PMP® Boot Camp. Everything that you need to understand prior to Boot Camp is listed here. Terminology There is a large volume of terminology associated with project management, but there are some key terms that you must be aware of as you are preparing for your exam. Learning these terms before your PMP® Boot Camp will have you ahead of the game and not playing catch-up (these definitions are not taken word for word from the PMBOK Guide®, 5th Edition): Analogous Estimating: Estimating based on a previous, similar activity or project. Think of it as making...
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...Overview of Project Cost Management According to an accounting textbook, cost is defined as a resource sacrificed or foregone to achieve a specific objective. It is something given up in exchange. It is necessary for project managers to understand project cost management since project costs money and consumes resources. There are reasons for project cost overrun and these are as follows: * Not emphasizing the importance of realistic project cost estimates from the outset. IT project cost estimates are low to start with or based on unclear project requirements. * Many IT professionals think that preparing cost estimates is a job for accountants when in fact, it is a very demanding and important skill that project managers need to acquire. * Many IT projects involve new technology or business processes that involve untested products and inherent risks. Project cost management involves the processes required to ensure that the project is completed within an approved budget. These processes are as follows: * Estimate costs * Determine budget * Control costs As project managers, understanding the basic principles of cost management is a must in order for them to be effective in managing project costs. Important concepts include profits and profit margins, life cycle costing, cash flow analysis, internal rate of return, tangible and intangible costs and benefits, direct costs, sunk costs and learning curve theory. Profits are revenues minus expenses...
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...Intl Project Management Cost & finance Part 2 : Tools and techniques SupdeCo La Rochelle (H. Khatchadourian) Aligned with the PMBOK® Guide Fourth Edition 1 Investment Concept & project investment Investment : basics The process of compounding and discounting Compound interest and future value (FV) of a single payment (« lump sums ») FVn = PV(1+I)n With N number of period (= years, quarters,months) I interest rate PV present value FV future value at end of year « n » Step-by-step approach or formula approach Use of spreadsheets (Excel) 1. Int. 2. Scope 3. Time 4. Cost 5. Quality 6. HR 7. Com. 8. Risk 9. Proc. Investment: basics Present value (PV) PV = FVn / (1+I)n Step-by-step approach and formula approach Finding the interest rate « i » ? Finding the number of years « n » ? 1. Int. 2. Scope 3. Time 4. Cost 5. Quality 6. HR 7. Com. 8. Risk 9. Proc. Investment: basics Annuities (ordinary) A series of payments over time At the end of each period Periods 0 5% 1 2 3 Payments -100€ -100€ -100€ 1. Int. 2. Scope 3. Time 4. Cost 5. Quality 6. HR 7. Com. 8. Risk 9. Proc. Annuities (due) At the beginning of each period Investment: basics Future value of an ordinary annuity With ⎡ (1 + I )n − 1⎤ FVAn = PMT ⎢ ⎥ I ⎣ ⎦ Interest rate I Series of payment (= constant payment) 1. Int. 2. Scope 3. Time 4. Cost 5. Quality 6. HR 7. Com. 8. Risk 9. Proc. Investment: basics Future value of an ordinary annuity Periods 0 r=5%...
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...(Office of Financial Management, 2009). The performance measures provide the project manager and the team about progress in meeting the goals and objectives of the project. Measuring performance allows budget decisions, better management, and accountability for the project manager. The three performance measures, which will be addressed, are quality, key milestones, and target costs. Quality Quality is measured by the percentage of what is produced or received, which meets the specification of the project the first time, without any reworking. The measurement of quality entails assessing the effectiveness of the management of quality and determining problem areas, opportunities, savings, and action priorities (Performance management, 2011). Costs indicate the quality of the project. Prevention costs are costs planned and incurred before the project is started. As the project progresses, other costs such as appraisal, failure, internal, and external failure are other types of quality-related costs (Performance management, 2011). These costs are indicators to the project manager alerting him or her of quality suffering because of complaints, waste, rework, and repairs relating to the project. Kerzner (2006) explains that quality must be planned for and designed in on any project. This accounts for 50% of direct labor dollars according to Kerzner (2006). Organizations, which place a high value on quality, understand the importance of building these costs into the budget...
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