Project Management -Project Cost Estimation

Topics: Project management, Cost, Costs Pages: 9 (2680 words) Published: February 2, 2011
Project Management
Word Document
Subject: Project cost estimation, budgeting & cash flows
Names of Group members:
Nilay Shah
Sharad Tiwari
Mayur Kakkad
Nishant Agrawal
Amit Sharma
Submitted to,
Prof. Deepak Jakate

Project Definition:
Why, What, How?
How does a project get started?
How do you know what it is supposed to achieve?
How do you know what approach is required?
How do you know that it is a good idea in the first place?
How will you know if you succeeded?

Business needs Project definition Project execution Before you can effectively manage a project, there needs to be a shared understanding of that project - its purpose, objectives, scope, sponsorship, funding and mandate. Some people would define the project as not existing until it has an adequate definition. In the real world, projects often need to get moving while at least some of these questions remain imperfectly answered. Project Management:

“The art of directing and coordinating human and material resources throughout the life of a project by using modern management techniques to achieve predetermined objectives of scope, quality, time and cost, and participant satisfaction”. Project management is the discipline of planning, organizing, securing and managing resources to bring about the successful completion of specific project goals and objectives. It is sometimes conflated with program management, however technically that is actually a higher level construction: a group of related and somehow interdependent engineering projects. A project is a temporary endeavor, having a defined beginning and end (usually constrained by date, but can be by funding or deliverables), undertaken to meet unique goals and objectives, usually to bring about beneficial change or added value. The temporary nature of projects stands in contrast to business as usual (or operations), which are repetitive, permanent or semi-permanent functional work to produce products or services. In practice, the management of these two systems is often found to be quite different, and as such requires the development of distinct technical skills and the adoption of separate management. The primary challenge of project management is to achieve all of the engineering project goals and objectives while honoring the preconceived project constraints. Typical constraints are scope, time, and budget. The secondary—and more ambitious—challenge is to optimize the allocation and integration of inputs necessary to meet pre-defined objectives.

Project Cost Management:
How do we know what a project will cost? We really don't, until the project is complete. We can't know the final project cost until the project is complete because we can't accurately predict the future.

Project cost management (PCM) is a method which uses technology to measure cost and productivity through the full life cycle of enterprise level projects. PCM encompasses several specific functions of project management that include estimating, job controls, field data collection, scheduling, accounting and design. Beginning with estimating, a vital tool in PCM, actual historical data is used to accurately plan all aspects of the project. As the project continues, job control uses data from the estimate with the information reported from the field to measure the cost and production in the project. From project initiation to completion, project cost management has an objective to simplify and cheapen the project experience. Cost Estimating :

This document describes the methodology for establishing cost estimates for projects managed by LBNL in a manner that is compliant with the standards for implementation of appropriate Project Management controls and Earned Value Management. SCOPE

Cost estimates, including Estimate to Complete (ETC), are prepared in a clear, consistent, comprehensive format that facilitates review of details and...
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