A baseline is defined as a time-based standard against which performance is measured. A project baseline is a time-based, progressive plan as opposed to one, single target value. Projects will often have a single, target value, but it is important to know if the project is in good health at any given intermediate project control point. The baseline … [Read more...]
Carpenters have hammers, plumbers have wrenches, and programmers have computers. But does a project manager have any tools which help them perform their work better, quicker, or cheaper? Absolutely! In fact, if you don't use these tools you will be at a serious disadvantage to other project managers. And if you do, your career will see an order of … [Read more...]
Discounted cash flow is an project investment valuation method whereby future cash flows are discounted by a rate that accounts for the time value of money. It is used to make decisions between various available projects, or to determine the economic feasibility of a project. For example, when a business is expecting revenue of $250,000 next year, the current … [Read more...]
Projects are by definition temporary, that is, they have a defined beginning and end. For this reason, the project schedule is almost always a major factor in project success. It also means that project stakeholders want to be updated on the status regularly, to ascertain whether the project is on track to complete on time. A project status report contains … [Read more...]
Poor project cost management is one of the easiest ways to make a project go awry. Hence, good project management requires a firm grasp on the concepts and techniques in project budgeting and cost control. Thankfully, the Project Management Body of Knowledge (PMBOK) gives us a strong foundation in this area. Project Cost Management is the fourth of 10 … [Read more...]
One of the most confusing aspects of Project Management is the concept of Contingencies and Management Reserves. When are they used? What are they used for? And how are they applied? In this article I will lift the veil. Contingencies Contingencies are amounts placed in the project estimate to account for "known unknowns." That is, the … [Read more...]
Bottom up estimating is the project management technique of estimating individual tasks and then combining them into an overall project estimate. Often the individual project team members who will be performing the task provide the estimates, because they are in a better position to estimate a task that they will be working on. Types of Estimates Any of the three main … [Read more...]
Earned Value is a method used by project managers to calculate the current project status and predict future project performance. In this post we will outline each earned value formula. Planned Value (PV) Earned Value (EV) Actual Cost (AC) Schedule Variance (SV) Schedule Performance Index (SPI) Cost Variance (CV) Cost Performance Index (CPI) … [Read more...]
Poor project cost management is one of the easiest ways to make a project go awry. Hence, good project management requires a firm grasp on the concepts and techniques in project budgeting and cost control. Thankfully, the Project Management Body of Knowledge (PMBOK) gives us a strong foundation in this area. Project Cost Management is the fourth of 10 project … [Read more...]
The real benefit of the earned value method is in the early warning signal it provides. In my previous life at a large engineering company, I saw many project managers get to a monthly billing cycle before they realized the project was behind, and even then they would rationalize it by deciding their project team was going to be more efficient in the next cycle. … [Read more...]
