Key Learning Objectives
By the end of the course participants will be able to:
- Describe the 4 steps of project cost management
- Define responsibilities for project cost management
- Explain why life-cycle costing should be applied to every project
- Describe the 5 different levels of estimates
- Apply 3 different approaches to developing a cost estimate
- Use cost estimates to prepare and present a project budget
- Apply earned value concepts effectively and inexpensively
Detailed Topical Outline
Setting the stage for the two-day workshop
Introductions, ground rules, and expectation setting
Project cost management activities
Cost management vs. financial management
Types and units of costs
Exercise: Participants will identify their project cost management challenges
Planning for cost management
Cost and the project life-cycle
Who’s responsible?
Do you need a written Cost Management Plan?
Life-cycle costing
Exercise: Participants will begin developing content for a Project Cost Management Plan
Resources: the starting point
The 5 Ms: resource categories
Defining your resource pool
Forecasting resource productivity
Effort vs. duration and their impact on costs
Exercise: Participants will document the components of their resource pools
Cost estimating
5 levels of estimates: order of magnitude to definitive
The high cost of precision
Strengths and weaknesses of different approaches
How and when to prepare a bottom-up estimate
How and when to prepare an analogous estimate
How and when to prepare a parametric estimate
Exercise: Participants will prepare sample estimates using all 3 types of estimating approaches
Cost estimating (continued)
Cost estimating tools
Should-cost estimates
Cost of quality
Basis of estimate
Exercise: Participants will document the basis of estimate for their practice estimates
Cost budgeting
Cost codes and the Work Breakdown Structure
Time-phased budgeting
Risks and assumptions
Reserves and contingencies
Getting the budget approved
Exercise: Participants will evaluate alternative approaches to budget presentation
Cost control
Accumulating actuals: invoices and timesheets
Variances: how big is too big?
Adjusting the baseline for approved changes
Re-baselining
Reporting options
Exercise: Participants will analyse different status reports to determine the project’s condition
Using earned value the right way
Strengths and weaknesses
Choosing the right approach and the right level for earning value
Forecasting approaches
Choosing corrective action
Exercise: Participants will team up to play “Milestones: the Game of Projects” to see how earned value helps improve cost control
Recap and Review
Getting the most from what you’ve learned: Less is often more
Mapping the tools and techniques to your project cost management challenges