Project Cost

Project Cost Data

One could say that your biggest challenge as a Project Manager is delivering within budget. If you are late then you can consider adding more staff. If the quality of your deliverables is not good enough, then you can consider scheduling more time. However, if you are over budget, there are not a lot of options for you.

Every Project Manager has a set budget. It is one of those things that make it a project. If you have an on-going annual budget, then you would be managing an operational activity, not a project; the overall funding for the Huntsville project was set at $2,750,000 by the Board of Directors, however, with proper planning, the project manager used an earned value management (EVM) system to estimate the total cost of for this project will be $2,631,800. The project is under budget from the original budget.

In the planning phase of the Huntsville project, the total budget is estimated at $284,022 for 1,170 hours of work with duration time of 10 weeks. The preparation phase is forecast to be $1,282,442 for 1,154 hours of work with a duration time of 47 weeks. The EVM system will be important in monitoring these sections because a few costs could be affected due to the facility specialist being over-allocated.

The budgeting encounter for a project manager is that by the time he/she is allocated to a project, the budget has already been set by the Sponsor. The Project Manager does not have any communications in this matter since this is where an EVM system can be used. The most basic requirement of an EVM system is that it quantifies progress using planned value (PV) and earned value (EV). The EVM system can be used in this project as pre-defined methods of quantifying the accomplishments of work (Gido & Clement, 2009, Chapter 7). At the end of each week, the project manager identifies every detailed element of work that has been completed, and sums the PV for each of these completed elements. EV may be accumulated