华中科技大学：《IT项目管理》（本科）（英文版）Topic：5 Project Cost Management

IT project management Review INSTRUCTOR: SHU LIU HIT SCHOOL OF SOFTWARE Fall 2005 All rights reserved

IT Project Management INSTRUCTOR: SHU LIU HIT SCHOOL OF SOFTWARE Fall 2005 All rights reserved Review

Project Scope Management Initiation Project Charter Scope planning Scope Statement Scope definition WBS Scope verification Verification Document Scope Change control Change control process Project Cost Management

Project Cost Management 2 Project Scope Management Initiation Scope Planning Scope Definition Scope Verification Scope Change Control Project Charter Scope Statement WBS Verification Document Change control process

Project Time Management Activity definition All Activities Activity sequencing Project Network Diagrams Activity duration Duration estimating Estimates Schedule development Gantt Chart Schedule control Control changes Project Cost Management

Project Cost Management 3 Project Time Management Activity definition Activity sequencing Activity duration estimating Schedule development Schedule control All Activities Project Network Diagrams Duration Estimates Gantt Chart Control Changes

IT Project management Topic: Project Cost Management INSTRUCTOR: SHU LIU HIT SCHOOL OF SOFTWARE Fall 2005 All rights reserved

Topic: Project Cost Management IT Project Management INSTRUCTOR: SHU LIU HIT SCHOOL OF SOFTWARE Fall 2005 All rights reserved

IT Projectmanagement Outline Importance of project Cost management a Basic principles of cost management Project Cost management Process ■ Resource planning Cost Estimating Cost Budgeting Cost control Project Cost Management 5

Project Cost Management 5 Outline ◼ Importance of Project Cost Management ◼ Basic Principles of Cost Management ◼ Project Cost Management Process ◼ Resource Planning ◼ Cost Estimating ◼ Cost Budgeting ◼ Cost Control IT Project Management

IT Projectmanagement The Importance of Project Cost Management It is usually not difficult for IT professionals to learn about project cost management; g they just often are not interested in the subject was 1%o of the original estimates; improved to 45% in the 2001 study Project Cost Management 6

Project Cost Management 6 The Importance of Project Cost Management ◼ Cost management is another trouble spot for IT projects. ◼ IT projects have a poor track record for meeting cost goals ◼ Average cost overrun from 1995 CHAOS study was 189% of the original estimates; improved to 45% in the 2001 study ♦ It is usually not difficult for IT professionals to learn about project cost management; they just often are not interested in the subject. IT Project Management

IT Projectmanagement What is Cost accountants usually define cost as a resource sacrificed or fore-gone to achieve a specific ob Many it professionals think preparing cost a we estimates is beneath them- a job for accountants. thing giy On the contrary, preparing good cost estimates is a very demanding, important skill that all a Cg information technology project S likl managers need to acquire Project Cost Management

Project Cost Management 7 What is Cost? ◼ Accountants usually define cost as a resource sacrificed or fore-gone to achieve a specific objective. ◼ Webster’s dictionary defines cost as “something given up in exchange.” ◼ Costs are usually measured in monetary units like dollars Many IT professionals think preparing cost estimates is beneath them- a job for accountants. On the contrary, preparing good cost estimates is a very demanding, important skill that all information technology project managers need to acquire. IT Project Management

IT Projectmanagement What is Project Cost Management? a Project cost management includes the processes required to ensure that the project is completed within an approved budget Resource planning ■ Cost estimating Cost budgeting Cost contro Project Cost Management

Project Cost Management 8 What is Project Cost Management? ◼ Project cost management includes the processes required to ensure that the project is completed within an approved budget ◼ Resource planning ◼ Cost estimating ◼ Cost budgeting ◼ Cost control IT Project Management

IT Projectmanagement Project Cost Management processes Resource planning a determining what resources and quantities of them should be used Cost estimating a developing an estimate of the costs and resources needed to complete a project Cost budgeting allocating the overall cost estimate to individual work items to establish a baseline for measuring performance Cost control controlling changes to the project budget Project Cost Management

Project Cost Management 9 Project Cost Management Processes ◼ Resource planning ◼ determining what resources and quantities of them should be used ◼ Cost estimating ◼ developing an estimate of the costs and resources needed to complete a project ◼ Cost budgeting ◼ allocating the overall cost estimate to individual work items to establish a baseline for measuring performance ◼ Cost control ◼ controlling changes to the project budget IT Project Management

IT Projectmanagement Basic principles of cost management(1) Profits(利润) are revenues minus expenses Profit margin(利润率) is the ratio between revenues and profits Life cycle costing (全寿命期成本计算) is estimating the cost of a project over its entire life Project Cost Management

Project Cost Management 10 Basic Principles of Cost Management (1) ◼ Profits（利润） ◼ are revenues minus expenses ◼ Profit Margin （利润率） ◼ is the ratio between revenues and profits ◼ Life cycle costing （全寿命期成本计算） ◼ is estimating the cost of a project over its entire life IT Project Management