QMDS400 Ch9
Budgeting Projects
Chapter 9
Contemporary Project Management
Kloppenborg
1
© 2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Introduction to Project Budgeting
• Involves developing a cost management plan for a project • For small projects
• Ensure accurate cost estimates
• Secure the funding
• Develop cost reporting procedures
• For large projects
• AND develop and use accurate cash flow estimates
Cost management plan – “the document that sets out the format and establishes the activities and criteria for planning, structuring, and controlling the project costs.”
© 2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted
PMBOK®
Guide to a publicly accessible website, in whole or in part.
2
Introduction to Project Budgeting
Purposes of the Cost Management Plan
•
•
•
•
How to develop and share relevant, accurate and timely information for decision making
Provides feedback linking the project to business objectives Provides detail and summary information
Helps project stakeholders focus on schedule, performance, and cost.
3
© 2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Estimate Cost
• Cost estimating is linked to scope, schedule, and resource planning
• Never lie to yourself
• You must understand what the project costs really are
• Never lie to anyone else
• Avoid shading the truth to secure necessary funding
Cost estimating – “the process of developing an approximation of the cost of the resources needed to complete project activities.” PMBOK® Guide
© 2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
4
Estimate Cost
• For accurate
Chapter 9
Contemporary Project Management
Kloppenborg
1
© 2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Introduction to Project Budgeting
• Involves developing a cost management plan for a project • For small projects
• Ensure accurate cost estimates
• Secure the funding
• Develop cost reporting procedures
• For large projects
• AND develop and use accurate cash flow estimates
Cost management plan – “the document that sets out the format and establishes the activities and criteria for planning, structuring, and controlling the project costs.”
© 2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted
PMBOK®
Guide to a publicly accessible website, in whole or in part.
2
Introduction to Project Budgeting
Purposes of the Cost Management Plan
•
•
•
•
How to develop and share relevant, accurate and timely information for decision making
Provides feedback linking the project to business objectives Provides detail and summary information
Helps project stakeholders focus on schedule, performance, and cost.
3
© 2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Estimate Cost
• Cost estimating is linked to scope, schedule, and resource planning
• Never lie to yourself
• You must understand what the project costs really are
• Never lie to anyone else
• Avoid shading the truth to secure necessary funding
Cost estimating – “the process of developing an approximation of the cost of the resources needed to complete project activities.” PMBOK® Guide
© 2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
4
Estimate Cost
• For accurate