Discounted cash flow is a 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 value of … [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 magnitude return … [Read more...]
A project feasibility study is a report that investigates the viability of a project. It seeks to provide its stakeholders with an analysis that results in a go/no-go decision. Feasibility studies are performed in a variety of industries. They are prominent in the oil & gas, mining, or renewable energy industries, or in the manufacturing industry for new plant … [Read more...]
Payback period is the length of time required for an investment to recover its capital. It is the amount of time required until the investment is in a break even position. It is generally used for investments that involve a large up front capital outlay, such as the construction of an industrial facility or development of a software product. The shorter the payback … [Read more...]
Top Down estimating is a project estimating technique whereby the overall project is estimated first, and individual tasks are apportioned from it. You start from the top of the pyramid and work downwards. This type of project budgeting usually occurs when there is a fixed budget and/or the scope of the project must fit within a predetermined funding level, … [Read more...]
Mismanaging project costs is the single fastest way to cause project failure. Project costs represent the many multi-faceted experiences that occur on a project, however stakeholders see only the bottom line and draw rapid conclusions from it. For this reason, the planning of the management of project costs is the focus of the Project Management Body of Knowledge's … [Read more...]
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...]
One of the most important jobs of the project manager is that of project resource management. Like a carpenter using a saw, like a pilot landing an airplane, like a programmer writing code, ask any project manager and they will tell you that managing the project resources is the day to day work they spend most of their time on. Project resources include everything … [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...]
