Hopefully your projects never have this type of variance! A variance is defined as a schedule, technical, or cost deviation from the project plan. Variances should be tracked and reported, as well as mitigated through corrective actions. There are two types of variance which normally receive most of the attention: Cost Variance Schedule Variance Calculating … [Read more...]
We engineers exist, by definition, on the interface between the economic and sub-economic. It is often our job to try and define the boundary, and it is often defined by technological factors that have to be developed to a new point. Most colleges and universities give engineering students a course on engineering economics, but this does not translate to widespread use … [Read more...]
Could your projects use additional risk management? Experts agree that it is one of the most underutilized areas of project management. As engineers, when we're managing a project in our area of expertise we like to think we know the primary risks and we have them under control. But a small amount of risk management planning at the outset of every project will reap … [Read more...]
Engineering projects come in many shapes and sizes, but they can generally be broken down into the following phases. Planning / Preliminary Engineering. This is the stage at which the options are considered and the pros and cons evaluated. Most engineering projects involve the creation of a new product or the destruction and re-build of an existing one, and … [Read more...]
Kevin Payravi, Wikimedia Commons The Project Management Institute (PMI) reports that only 64% of projects meet their intended goals. The difference between a successful project and an unsuccessful one can usually be narrowed down to one word: Planning. Even small projects can benefit from a Project Management Plan. The following Project Management Plan checklist is … [Read more...]
The calculation of the net present value (NPV) is a budgeting technique that equates the discounted cash flows against the initial investment. The mathematical formula is: $$NPV = \sum_{t=1}^{n}\frac{FV_{t}}{(1 + k)^{t}} - I$$ Where: FV = Future cost of the cash inflows, I = Initial Investment k = Discount rate equal to the owner's cost of capital I … [Read more...]
Project Management, as defined by the Project Management Institute in the Project Management Body of Knowledge, is comprised of five 'process groups': Project Initiation Selection of the best project given resource limits Recognizing the benefits of the project Preparation of the documents to sanction the project Assigning of the project manager Project … [Read more...]
Critical Success Factors, or CSF's, are the criteria that defines success. In project management, they are found in the project management plan and define what it means for the project to be successful. Time and Cost (deadlines and budgets) are almost always part of the CSF's, but most projects have other success criteria as well. In any area of life, you create goals … [Read more...]
In order to understand the complex profession of project management, we must first define the word 'project.' A project is a temporary endeavor that: Has specific objectives to be completed within certain specifications Has defined start and end dates Has funding limits (if applicable) Consumes human and non-human resources (i.e. money, people, equipment) Cuts … [Read more...]
Taken from Project Management, A Systems Approach to Planning, Scheduling and Controlling by Dr. Harold Kerzner, PhD. Adopt a project management methodology and use it consistently. Implement a philosophy that drives the company toward project management maturity and communicate it to everyone. Commit to developing effective plans at the beginning of each … [Read more...]
