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Objectives: Project Management Lesson 4 Planning Cost & Quality Management

This document discusses project cost and quality management. It covers determining budgets, controlling costs, estimating techniques, quality planning, customer satisfaction, quality assurance, quality control, and user acceptance testing. The objectives are to understand cost management, the four phases of cost management, and quality management. Estimating techniques like parametric and analogous estimation are explained. Quality focuses on meeting customer requirements and conforming to plans through assurance, control, and testing.

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58 views4 pages

Objectives: Project Management Lesson 4 Planning Cost & Quality Management

This document discusses project cost and quality management. It covers determining budgets, controlling costs, estimating techniques, quality planning, customer satisfaction, quality assurance, quality control, and user acceptance testing. The objectives are to understand cost management, the four phases of cost management, and quality management. Estimating techniques like parametric and analogous estimation are explained. Quality focuses on meeting customer requirements and conforming to plans through assurance, control, and testing.

Uploaded by

jethro_012
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PDF, TXT or read online on Scribd
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PROJECT MANAGEMENT

LESSON 4
PLANNING COST & QUALITY MANAGEMENT

OBJECTIVES
- Cost management
- Four main phases of cost management:
o Determine budget
o Control Cost
o Costs incurred during a project
o Estimating costs
- Estimating techniques
- Quality management
- Customer satisfaction
- Quality control
- Quality assurance
- User acceptance testing

COST MANANGEMENT:
- Cost management is the process of:
 Estimating
 Controlling
- Predict future expenses in order to reduce the chances of it going over budget
- Project costs are calculated during the planning phase
- Expenses are documented and tracked
- Upon project completion predicted costs vs actual costs are compared

DETERMINE BUDGET
- Project budgets are vital in allow Project managers to make smart decision regarding cost, scope & time
- The budget takes into account all monetary resources needed to achieve project goals
- In order to establish a budget, you will need the following resources:
o Risk Registers
o Cost management plan
o Project Schedule
o Resource Calendars
o Scope Baseline
o Cost estimates

CONTROL COSTS
- “Monitor all costs in real-time to ensure they stay aligned with the budget
- Chart out task and team-based costs
- Track productivity to estimate billable hours
- Set task-based and hourly rates as required” (Clarizen, 2020)
- The process of overseeing costs throughout the project and managing the overall project budget
- It allows opportunities to identify ways of reducing the expenses within the project which can in turn increase
overall profits
- It involves accounting for financial risks that could arise
- If costs are not controlled the project runs the risk of the project going over budget and not aligning with
scope

TIPS FOR SUCCESSFUL COST CONTROL


 “Capture the entire scope in your WBS
 Insist on input and collaboration from outside stakeholders
 Determine the cost categories used in the organization
 Develop a trust within your team
 Take action immediately when there are is risk of exceeding budget” (Clarizen, 2020)

COSTS INCURRED DURING A PROJECT


- Direct cost
- Are directly linked to your specific project output e.g. your project needs a new software
- Indirect cost
- These are not linked directly to your project e.g. the rent for your office space
- Fixed cost
- These are once off expenses e.g. buying a company vehicle
- Variable cost
- These costs are subject to change e.g. gasoline prices fluctuate meaning it is not a constant expense
- Sunk cost
- The payment has already been paid e.g. market research before launching a new product

TERMS TO KNOW
- Unburdened – base salary
- Burdened Cost – cost of employee benefits (Health Insurance, car allowances & Cell Phone contributions)
- Material Cost (equipment)
- Ancillary (training, travel, fees)

ESTIMATING COSTS:
- The process of forecasting what will be required in order to achieve the project scope
- The forecast or estimate can often influence the decision to continue the project (RAG)
- Estimates do not need to be perfect
- Costs can be broken down into:
- Direct costs
- Indirect costs
ESTIMATION TECHNIQUES

PARAMETRIC ESTIMATION TECHNIQUE

Estimates are based on historical data


- How much did a singular item cost
- How long did a singular task take to complete?
- Most found in construction where required
- material and times can be measured

PARAMETRIC EXAMPLE:
Your project requires a room that is 2,5 m high(h) and 10 m wide (w) to be painted

Historical data demonstrates:


20 minutes to paint 1 m2
1L of paint is utilised
Total square meterage=
2.5(h) x 10(w) = 25 m2
25 m2 x 20 min = 500min/60 min = 8H33min
25 m2 x 1L = 25L of paint

ANALOGUS ESTIMATION TECHNIQUE


- Estimates are based on historical data for similar projects
- or processes
- Elements that can be referenced are:
- Project Cost
- Scope
- Duration

BELL CURVE TECHNIQUE

QUALITY MANAGEMENT

CUSTOMER SATISFACTION
- In the planning phase you need to ensure that you clearly understand the customers requirements
- This allows you to deliver the end result that satisfies everyone involved in the project
- Focusing on their satisfaction facilitates building a positive and trust based relationship which could lead to
future projects

TIPS FOR SATISFIED CUSTOMERS


- Keep customers informed
o Progress checks
o Weekly meetings
o Return phone calls/emails
o Under promise & overdeliver
o Take ownership even when things go wrong
o Make sure not to disregard what the customer is saying because ‘you know better’

QUALITY PLAN
- Allows project managers to track:
- Alignment with customer requirements
- Alignment with internal & external stakeholders
- Problems within the project (trace back to start)
- Overall conformance to the project plan

“The Quality Management Plan describes the following quality management components:
- Quality objectives
- Key project deliverables and processes to be reviewed for satisfactory quality level
- Quality standards
- Quality control and assurance activities
- Quality roles and responsibilities
- Quality tools
- Plan for reporting quality control and assurance problems” Project Management Advisor v2.2, 2020)

QUALITY ASSURANCE

- Process oriented
- Focuses on ensuring that the desired quality requirements are being met by evaluating processes &
procedures
- This process helps prevent defects or deviations from the requirements

QUALITY CONTROL
- Product oriented
- Focuses directly on the product/ deliverable in relation to the specifications at multiple stages of the project
- This process must be present throughout the lifecycle of the project so that adjustments can be made as
needed rather than at the end of the project

USER ACCEPTANCE TESTING


- This form of testing is used in the IT industry
- Designated testers are challenged with breaking or finding gaps in system functionalities or design
- Bugs/defects are captured & developers/designers need to rectify the problem
- Their solution is then tested again until it meets user requirements

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