Keeping project costs under control can feel like swimming against the current sometimes. To prevent you from going up the creek without a paddle, a Cost Management Plan is the guiding document which allows you to take fast, decisive action when issues arise and the sharks are circling. The Project Cost Management Plan is the component of the overall Project … [Read more...]
The Budget at Completion (BAC) is a value used in earned value management, a division of project management. It represents the original project budget. For example, if a project has a budget of $10,000, BAC = $10,000 Therefore, there is no other formula or calculation for this metric. The BAC is often compared to the Estimate at Completion (EAC) which … [Read more...]
Estimating a project is one of the most important aspects of project management. Projects are by definition temporary endeavors with a defined beginning and end, hence stakeholders need to know how much expenditure they are committing to. Thus, project estimates tend to start before the project even begins and are usually updated throughout the project life … [Read more...]
Project estimating is one of the most important aspects of project management. By their very nature, projects have fixed budgets and their owners want to know how much they will cost. Hence, project estimating begins prior to project initiation and estimates are usually updated at important project milestones. A Rough Order of Magnitude estimate, often called ROM … [Read more...]
In project management, like most things in life, there is no free lunch. If you want to finish sooner, you will have to cut the project scope. If you want lower costs, you have to cut expenses. If you want higher quality, you have to pay more. This constant tug of war is called the Triple Constraint, also known as the Project Management Triangle, or the Iron … [Read more...]
Three point estimating is a technique which utilizes an optimistic and pessimistic estimate to determine the ideal estimate value for a project task. It is a shoe-in for PMP exam questions, which is not likely to change anytime soon. It allows known risks to be quantified and built in to the project budget. Formula There are two generally accepted formulas for three … [Read more...]
Parametric estimating is a guaranteed inclusion on the PMP Exam. This article is assured to give you at least one point (but more likely four or five). Parametric estimating is a project estimation technique whereby a unit rate is used and multiplied by the number of units. For example: A house building project is estimated at $120 per square foot A contractor … [Read more...]
Earned value results are very easy to report to senior management or other stakeholders. Generally the recipient needs some basic training regarding the meaning of the numbers, but this is not a major undertaking. We break down the typical reporting methods into three categories: Small projects Medium-size projects Large projects Small Projects For small … [Read more...]
The VAC is a forecast of what the variance, specifically the Cost Variance (CV), will be upon the completion of the project. It is the size of the expected cost overrun or underrun. In many situations the project manager must request additional funding as early as possible, or at least report the potential for an overrun. The VAC represents the size of this … [Read more...]
The To-Complete Performance Index represents the efficiency level, specifically the CPI (Cost Performance Index) that will make the project finish on time. It can be a powerful indicator because it is generally easy to ascertain if your people will be as productive as the indicator tells you. There are two ways to calculate the TCPI: To achieve the original … [Read more...]
