Project Cost Management – The Essential Things to Know and Do

Online PM Courses

Project Cost Management often puts people off. But there’s little your project sponsor, your client, or their Finance Director care about more than your budget and how closely you can stick to it. Project cost over-runs are common. Instead, you must act with determination to understand project cost management and implement all the tools at your disposal to control costs and bring in your expenditure on budget. Project Cost Management.

Cost Estimation for Projects: How to Estimate Accurately

ProjectManager.com

Good cost estimation is essential for keeping a project under budget. Many costs can appear over the life cycle of a project, and an accurate estimation method can be the difference between a successful plan and a failed one. Estimation, however, is easier said than done. Projects bring risks, and risks bring unexpected costs. Project cost estimation applies to everything from building a bridge to developing that new killer app.

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Estimates, Forecasts, Projections

Herding Cats

Estimates. An Estimate is a value inferred for a population of values based on data collected from a sample of data from that population. The estimate can also be produced parametrically or through a simulation (Monte Carlo is common, but Method of Moments is another we use). . Estimates can be about the past, present, or future. We can estimate the number of clams in the Pleistocene era that are in the shale formations near our house. Projections/Prediction.

Software Estimating Resources

Herding Cats

This blog page is dedicated to the resources used to estimate software-intensive systems using traditional and agile development methods. The reason for this resource page is the lack of understanding of how to estimate, the urban myths about software estimating, and the fallacies that estimating is not needed, when developing software, in the presence of uncertainty, when spending other peoples money. Estimating Probable System Cost,” Stephen A.

Estimating is a Learned Skill

Herding Cats

Estimating is a learned skill, used for any purpose from every-day life to management of projects. When I left for the airport this morning to catch my flight to a customer site I estimated, given the conditions, how much time I need to get to my favorite parking spot at DIA. The same process for estimating is applied to multi-billion dollar projects we work. And the same process is applied to the Scrum development processes on those projects. .

Net Operating Value - A New Way to Look at Project Costs

PM That Works

Let’s take a step back and look at the historically most common path of projects. During the budgeting process usually the year before an idea for a project is suggested. Then this idea goes through some cycles and an estimated budget gets placed on the project list for the coming year. When the project is kicked off, the budget is set to the estimated budget. The project team compresses training, testing, or both to come in on the budget suggested.

2019 40

Compendium of Works to Increase Probability of Project Success

Herding Cats

Here's a collection of presentations, briefings, papers, essays, book content used to increase the Probability of Project Success (PoPS) I've written and applied over my career in the software-intensive system of systems and other domains. Business, Technical, Systems, Risk, and Project Management Briefings and Presentations. Project Performance Management (#PPM). Agile Project Management (#APM). Cost, Schedule, and Technical Performance Management (#CSTPM).

2019 37

DDSTOP The Saga Continues

Herding Cats

There's been a rash of conjectures about all kinds of bad business, project, and software development (agile and traditional) management ideas of late. We were one of the first users of eXtreme Programming, long before Scrum was around and presented that early work in 2003, " Making Agile Development Work in a Government Contracting Environment, Measuring velocity with Earned Value." . 40 - Estimation is a Problematic Practice of Companies Doing Dangerous Things.

2019 37

DDSTOP The Saga Continues

Herding Cats

There's been a rash of conjectures about all kinds of bad business, project, and software development (agile and traditional) management ideas of late. We were one of the first users of eXtreme Programming, long before Scrum was around and presented that early work in 2003, " Making Agile Development Work in a Government Contracting Environment, Measuring velocity with Earned Value." . For cost and schedule, there are databases containing 1,000's of past projects.

2019 34

Beginner’s Guide to Project Management Process

iZenBridge

For Beginners, it is important to understand essential elements of Project Management. One has to understand associated attributes like team leadership aspect, Team formation with primary emphasis on the competencies and skills required for a successful project. What is a Project? A project is a temporary, one time undertaking that has a definable goal and creates a Unique Product or Service. Temporary – A Project should have an end Date. Project Team.

Two Parallel Processes of Project Success - Both Value and Delivery are Needed

Herding Cats

Software development is a Value Creaton activity, but Value cannot be determined unless we know the cost to produce that value and when that value will be available for use by those who of paid for that Value. It's not clear why those advocating the first approach don't understand this, but the principles of MicroEconomics of software development demand we know both cost and value produced. This is the foundation for estimates. What will it cost to get the value?

2018 39

DDSTOP The Saga Continues

Herding Cats

There's been a rash of conjectures about all kinds of bad business, project, and software development (agile and traditional) management ideas of late. We were on of the first users of eXtreme Programming, long before Scrum was around and presented that early work in 2003, " Making Agile Development Work in a Government Contracting Environment, Measuring velocity with Earned Value." . And, my customer is equally as clueless about the need to estimate as I am.

2018 33

Misunderstanding Making Decisions in the Presence of Uncertainty

Herding Cats

What happens if you shift focus from "accurate estimation" to "reliably shipping by a date"? . All project work has uncertainty. Uncertainty comes from the lack of precision and accuracy about the possible values of a measurement of a project attribute. If your project has no uncertainty, there is no need to estimate. Turns out in the real world there is no such project. Our knowledge of this world - the planned and actual behaviors of the project.

The Problems with Schedules

Herding Cats

The Core Problem with Project Success. Unrealistic Cost and Schedule estimates based on inadequate risk adjusted growth models. Before diving into the details of these, let me address another issue that has come up around project success and estimates. There is a common chart used to show poor performance of projects that compares Ideal project performance with the Actual project performance. There is no ideal in the estimating business.

2016 42

Risk Management in Five Easy Pieces, with Apologies to Jack

Herding Cats

Managing Cost, Schedule, & Technical Performance Risk Is The Basis Of Good Project Management. Risk management is essential to the success of any significant project. Certain information about key project cost, performance, and schedule attributes are often unknown until the project is underway. The emerging risks that can be identified early in the project that impact the project later are often termed “known unknowns.”

2017 37

Cost Management Basics

ProjectManager.com

Cost management is the process by which one plans and manages the budget of a business or project. In the case of a project, it helps the project manager estimate what the project will cost and set in place controls by which they can reduce the chance of the project going over budget.

2019 317

Most Common Project Management Roadblocks to Avoid for Better Outcomes

Project Bliss

Project managers do a lot of firefighting. Every day, project managers are putting out fires, both internally within the team and externally with clients. When it comes to project management roadblocks, there are a few that come up time and again. Project Bidding Issues.

2021 229

What Is a Capital Improvement Plan & How to Create One

ProjectManager.com

A capital improvement plan can guide an organization when it’s trying to figure out which large projects or purchases in which they should invest. Can project management software facilitate this work? This is usually a multi-year project, often four to six years.

2022 294

A Wrap Up of the #NoEstimating Conjecture Analysis to Date

Herding Cats

The conjecture that we can make decisions in the presence of uncertainty without estimating the impacts of those decisions is without any principles that can be tested beyond personal anecdotes of I know people who spend other peoples money without providing estimates. Here's some reading to help understand why its bunk and how to learn to estimate in the presence of uncertainty in order to make better decisions. Software Estimating Taxonomy. Estimating Accuracy.

2016 35

Hard Costs vs Soft Costs in Construction: Definitions & Examples

ProjectManager.com

There are many variables to consider, from market to labor costs and always-fluctuating prices. But creating a detailed budget is key to successful construction project management. To create a realistic budget, you need to know the difference between these two costs.

Black Swans

Herding Cats

One of the books used by a vocal No Estimates advocate is Black Swans by Nassim Taleb. All is good so far until he mentions these concepts are applicable to the management of projects. What struck me was how disconnected Taleb is from the profession of project management. The concepts of Taleb and its application to project management is shared by some in the project management community (and now in the No Estimates community).

2002 32

Project Contingency: The Ultimate Guide

Rebel’s Guide to PM

Your new project was approved for funding. You wouldn’t believe the number of project managers I speak to on mentoring calls who struggle to get their budget approved. You can’t do much on a project without some funding behind you. What is project contingency?

2021 243

Microeconomics and Risk Management in Decision Making for Software Development

Herding Cats

The primary economic driver of the life-cycle structure is the significantly increasing cost of making a software change or fixing a software problem, as a function of the phase in which the change or fix is made. By the way, the pure conjecture that agile enables late changing requirements to not have a significant impact on the cost and schedule of the development project is completely lacking any testable evidence outside of personal anecdotes of agile advocates.

2007 32

Black Swans

Herding Cats

One of the books used by a vocal No Estimates advocate is Black Swans by Nassim Taleb. All is good so far until he mentions these concepts are applicable to the management of projects. What struck me was how disconnected Taleb is from the profession of project management. The concepts of Taleb and its application to project management is shared by some in the project management community (and now in the No Estimates community).

2002 28

Review Project Management Maturity Model Fourth Edition

Henny Portman

Project Management Maturity Model Fourth Edition, written by J. E.g., resource management is broken down into the key components resource management planning, resource estimation, resource acquisition, team development and team management.

2021 82

Project Budgeting: An Interview with Sol Benady

Rebel’s Guide to PM

He started his career as an auditor in London, trained with E&Y where he qualified as an accountant, and then moved into consulting for retail and investment banking for a wide range of projects and clients. 5 Tips for Managing a Project Budget. Define the project scope.

Budget 284

14 Common Project Risks (+ more)

Rebel’s Guide to PM

Stuff happens on projects, and if the worst happens, it’s better to know about it in advance. However, at the beginning of your project when your risk log is empty, it can be a bit of a challenge to think of all the stuff that might need to go on there. Project team risk.

How to Keep Your Projects On-Time and On-Budget

Arras People

Deltek is the latest member of the Arras People Software Directory , in this article they give a brief overview of how projects can be controlled and how software can help with this. From internal initiatives to major customer endeavors, there’s a universal truth: all projects are susceptible to cost overruns and schedule slippage. But what are the right project controls and is there a single method to the implementation madness? What Are Project Controls?

Budget 230

Scheduling and Cost Control in a Complex Environment

Strategy Execution | PMO Perspectives

The recent UK Government’s enquiry into the management of major projects was cut short by world events, but the interim report and oral evidence make for interesting reading. [1] Unsurprisingly the variables under discussion were cost, schedule and benefits.

PMO 56

Your Guide to Cost Benefit Analysis in Project Management

nTask

Project management involves making a lot of decisions and these decisions cannot always be easy. This is especially true when those decisions could potentially be critical to the success of your project overall. Enter cost benefit analysis. What is Cost Benefit Analysis?

2021 116

The Complete Glossary of 614 Project Management Terms

Workamajig

Project management terminology can be complicated. It doesn’t matter whether you’re working towards your PMP certification or simply managing projects casually in your organization, knowing core project management terms always helps. All Project Management Terms.

2021 78

Project Manager Roles and Responsibilities: What does a PM Really Do?

Project Bliss

The job title of “project manager” is pretty common these days. But project manager roles and responsibilities can be pretty vague if you’re not already familiar with them. I know this firsthand, just by watching reactions when I tell someone I’m a project manager. When I took my first job as a project manager, my mother asked what I do. The title of Project Manager was unfamiliar to my mother. What a Project Manager Really Does.

2017 196

How to Create a Project Assumptions List: Examples and Template Included

Project Bliss

Though it’s often true, that saying doesn’t apply to your project. When you plan your project, you’re operating on a set of assumptions. But maybe the idea of dealing with assumptions in project management is a bit confusing. What are project assumptions, anyway? And in this post I’ll go over the following items: The benefit of identifying and creating a list of project assumptions. How to identify and manage project assumptions.

2018 178

How to recruit an outstanding project manager (Part I)

Susanne Madsen

Although it isn’t possible to provide one single definition of what a good project manager looks like, certain traits, skills and attributes seem to be advantageous for a person who is to lead a project. Essentially, the job of a project manager is to take on a customer’s big picture vision and to turn that vision into reality within certain time, budget and quality constraints. She knows that she cannot manage a project from behind her desk.

2018 74

Project Management Fundamentals- Evolving Organizations in a Competitive Business Environment

Techno-PM

And to gain a competitive edge over others, one needs to have effective project planning and management directives in place. Download Project Management Templates! What is Project Management? What are the fundamentals of Project Planning and Management?

Overview of the PMBOK® Guide Seventh Edition – Lesson 3 Transcription

MPUG

As such, he oversees the production and maintenance of courses on project management, systems engineering, software development, business process improvement, and cyber security. But nevertheless, the Seventh Edition does admit, hey, managing projects is an unsolvable game.

2022 56

37 Best ClickUp Alternatives & Competitors

Scoro

Project management using the right software is a big step toward achieving results. Access to project data in one consolidated space or application eliminates the constant shift from one site to another. Plan projects with a single click. Roles that you need for every project.

2022 52

What Is a Project Baseline And Why Is It Important?

Teamweek

In project management, we call it operating without a baseline. Try doing that in project management and you’ll soon realize that you’re in the wrong profession. All projects are governed by hard rules like scope, deadlines, and budget. These are all part of a project baseline and without them, you don’t have a project: you have a potentially endless odyssey that no one will enjoy- least of all you. What is a project baseline? Project Management

2019 40

The Definitive Guide to What Is Agile and Scrum

Agilemania

The birth of project management began which led to a more efficient way of building products. For starters, Project Management is the use of distinct knowledge, skills, tools, and techniques to deliver value to customers. The team members are instrumental to the success of the project.

2022 71

4 Ways to Measure the ROI of Work Management Tools

Wrike

You’re the head of operations for a top government weapons organization. But there are problems around every corner: insufficient project requirements, failure from leadership to recognize risk, managers setting poor collaboration processes, aggressive competition targeting you, and so much more. In the end, your project blows up. That’s quite an expensive project failure. Companies lose $97 million for every $1 billion invested in projects ( PMI, 2017 ).