Homework: Budget Analysis
Competency
By successfully completing this homework, you will demonstrate your proficiency in the following course competencies through corresponding guide criteria.
1) Competency 1: Apply project cost tools and techniques to ensure project success.
a) Analyze cost-estimating techniques.
b) Estimate costs of individual schedule activities or work packages.
c) Estimate the total cost of ownership and explain how it applies to the project.
d) Estimate return on investment and explain the calculation.
e) Develop new project budget.
f) Estimate contingency reserves.
2) Competency 2: Communicate effectively in a professional manner consistent with the standards of project management.
a) Explain cost-estimating techniques used.
ePortfolio
This portfolio work project demonstrates your competency in applying knowledge and skills required in the workplace. Include this in your personal ePortfolio.
Create a budget analysis report of the current failed project and a project estimation report for the turnaround project.
This portfolio work project, a budget analysis and cost estimating artifact, is based on your selected business or IT project. You may choose to base your homework on the Revive LLC case study for the development of a new online employee orientation module, or you may select a company/scenario of your own choosing. Both human resources (HR) and information technology (IT) employees, as well as contractors, will be used in this project.
Cost management is defined as "primarily concerned with the cost of the resources needed to complete the project activities" (Project Management Institute, 2017, p. 233.). Also, consideration needs to be taken with respect to project costs and stakeholder differences. Financial performance techniques provide both internal and external measurement capabilities that allow for decision making, financial analysis, and mitigation strategies.
Effective cost management involves establishing a cost baseline for measuring project performance. Establishing the project baseline is like establishing a point of reference. Whatever that point of reference, it will become the baseline against which project performance will be measured. This cost baseline becomes the basis for more advanced techniques, such as earned value management (EVM).
Project cost management includes planning for the resources needed: the people, equipment, and materials. With the use of proven estimating techniques, an estimate is presented to the project sponsor and management for approval. Upon approval, the cost estimate becomes the official budget for the project. As the project goes through the normal project lifecycle, cost control techniques track and monitor the budget, which allow you to make sure you will not incur a budget overrun.
Reference
Project Management Institute. Guide to the Project Management Body of Knowledge (PMBOK Guide) - Sixth Edition and Agile Practice Guide. Newtown Square. PA. 2017.
Authentic Experience Project Components
You will do what is necessary to have the project succeed this time around. Using the Project Revive LLC Scenario or a project of your choosing, you will:
1) Assess the failed project by examining the cost estimation process.
2) Analyze the existing project work breakdown structure (WBS).
3) Create a new WBS.
Using the original WBS:
1) Break down the activities and tasks further into smaller work packages that will not exceed 80 hours of work.
2) You may also add new activities and tasks that you think are needed to successfully complete the project.
3) You will use Microsoft Project as the project management software tool to create the new WBS in tabular form.
YouTube has many excellent project management videos that may be helpful to review before completing this homework.
Scenario
For this homework, choose either Option I or Option II. You do not need to do both. Both options will be graded using the same scoring guide.
Option I: Project Revive LLC is a consulting firm of highly charged and accomplished project managers whose main stream of revenue comes from managing the turnaround of failing projects. As a consultant with Project Revive LLC, you will study, analyze, and manage a failed project from NearlyFree.com. NearlyFree.com is a fictitious company and the project documents for this project scenario are located below. The NearlyFree.com project was originally scoped to develop and deploy an automated web-based training system for new employees to reduce the workload and cut down personnel resources required to complete the new employee orientation (NEO) training.
Use the NearlyFree.com project work breakdown structure to help identify deliverables and processes that need resources. It is important to know historical information regarding what types of resources were required for similar work. You can do research using the Internet to find similar projects. You will find the project justification and objectives in the project scope statement.
Option II: You may choose a business of your own. It must include (but is not limited to) the following criteria:
1) Clearly indicate the title of the project in every homework.
2) You must have access to the following documentation:
a) Scope statement.
b) Final deliverable and product definition.
c) Project work breakdown structure.
d) Project schedule.
e) Quality plan.
f) Project costs (estimates and actuals).
Your Role
For both Option I or II, you are the project manager.
Task
Microsoft Project is the recommended software tool for this course due to its wide industry acceptance and its use in many project management professional roles. To make this easier, you have the ability to download and install your own version of MS Project for use in this course. See the Software Preparation and Technology Access activity for more information.
Practice using MS Project in this course will prepare you for future professional PM roles and responsibilities; please use MS Project for those tasks supported by MS Project. If you have access to other tools such as MS Visio, MS PowerPoint, MS Word, or other project management software that you believe may still meet the requirements of this course, please discuss your selected alternative with faculty.
Part A: Budget Analysis Report
Create a budget analysis report of the current failed project.
Use the MS Project functionality (or other, approved software of your choice) to:
1) Display project summary information and report.
2) Create project reports.
3) Export project plan cost data into Excel.
4) Develop an analysis report including the following:
a) Analyze the current financial state using cost estimating techniques.
b) Estimate costs of individual schedule activities or work packages by reviewing WBS and associated project costs.
c) Identify failure points that occurred throughout the project.
Part B: Cost Estimating Forecast Analysis
Create a project estimation report for the turnaround project.
At this point in the process you have been asked to report back to NearlyFree.com on your findings and recommendations with respect to project costs. Review the information you gathered and prepare a report for your client. This will be a what-if scenario or plan that you will propose to NearlyFree.com management for the project turnaround to succeed. In the report, do the following:
1) Copy the original NEO project schedule baseline and create a custom table to add your changes and modifications.
2) Display your proposed cost estimates and newly established cost baseline for the turnaround project, based on the Project Schedule [MPP].
As part of this report, address the following topics or questions, and where necessary, define assumptions you made:
1) Total cost of ownership-what it means to the project and to the business, how it is calculated, its role in the failed project, and your estimates for the turnaround project.
2) Return on investment-what it means to the project and to the business, how it is calculated, and your estimates for the turnaround project.
3) Project budget-an analysis of the failed project budget, techniques used to prepare your proposed project budget, and the proposed project budget.
a) Develop a new project budget with a more detailed homework of the resources.
i. Establish a total cost baseline for measuring project performance.
4) Explain and justify the cost estimating techniques used.
5) Estimate contingency reserves.
Format your homework according to the following formatting requirements:
(1) The answer should be typed, double spaced, using Times New Roman font (size 12), with one-inch margins on all sides.
(2) The response also includes a cover page containing the title of the homework, the student's name, the course title, and the date. The cover page is not included in the required page length.
(3) Also include a reference page. The Citations and references should follow APA format. The reference page is not included in the required page length.