Thursday, November 29, 2012

Project Management Resources for Creating Cost, Effort, & Duration Chart


Week 5

Estimating Costs and Allocating Resources

This week, I am tasked with allocating resources and estimating costs associated with my PM project for this course. I am achieving this objective by searching the web for two reliable sources that will help provide extra advice and help I need to construct the RASCI Chart, according to the recommendations of Dr. Harold Stolovitch, one of our EDUC 6145 – 2 resources this week.  Portny, Mantel, Meredith, Shafer, Sutton, & Kramer (2008) tell us quite much about estimating cost and allocating resources for our projects.  According to these authors, "Program managers can create budgets by working from upper management recommendations (top-down) or by gathering budget estimates at the task level (bottom-up).  Whatever the chosen method, being able to accurately estimate costs is a critical project manager responsibility...various tools and strategies can help project managers improve the accuracy of budget estimates, but successful project managers also develop strategic responses to budget changes and revisions" (p. 118).

I found the following resources: Microsoft Project Management Software. This is a very effective tool for intuitively estimating costs and allocating resources. I have tried other software tools, but out of all of them, Project, short for Microsoft Project, was the best. In Project, you are provided suggestions all along the way of constructing your cost, effort, and duration for managing your project. For example, when Project detects an error, such as over allocating an activity to one resource, Project tells you to correct it in two ways—manually or automatically.  Click above to get your free trial, which can help save you pain, time, and $ so you don’t have to...






….well you get the point!





In Project, minutes, hours, days, weeks are analyzed and converted for you. can be used and Project will intuitively and automatically update the Gantt Chart for you.
As I am working through completing the RASCI Chart. I remember Dr. Stolovitch’s advice about constructing the RASCI Chart as the first step to determining costs, efforts, and duration.  The first RASCI stands for: Responsibility, Accountability, Support, Consult, and Inform (Stolovitch, n.d.).

Therefore, I began surfing the web to search for advice and tools I could use to do exactly Dr. Stolovitch’s advice.  There, I found what I was looking for, Microsoft Project Management Tool.



 

What do you find the most challenging about estimating activity duration and resource costs?

The challenge I found most challenging about estimating activity duration and resources costs is not having enough time to learn the various software tools that are offered online that can help you conduct an error free costs, effort, and duration chart. However, given enough time to learn any one of them well provides the Project Manager ample help at constructing an accurate project budget.

How to develop a bottom-up budget estimate Portny informs in Project Management for Dummies that, “Preparing a budget for your project requires two steps: First you prepare a rough estimate. Then when you move into the organizing and preparing stage of your project, you’re ready to create your detailed budget estimate.” Develop your bottom-up budget estimate by doing the following:
  1. For each lowest-level work package, determine direct labor costs by multiplying the number     of hours each person will work on it by the person’s hourly salary.
You can estimate direct labor costs by using either of the following two definitions for salary:
  • The actual salary of each person on the project
  • The average salary for people with a particular job title, in a certain department, and so on
"Suppose you need a graphic artist to design overheads for your presentation. The head of the graphics department estimates the person will spend 100 person-hours on your project. If you know Harry (with a salary rate of $30 per hour) will work on the activity, you can estimate your direct labor costs to be $3,000. However, if the director doesn’t know who’ll work on your project, use the average salary of a graphic artist in your organization to estimate the direct labor costs. 2. For each lowest-level work package, estimate the direct costs for materials, equipment, travel, contractual services, and other nonpersonnel resources. Consult with your procurement department, administrative staff, and finance department to determine the costs of these resources. 3. Determine the indirect costs associated with each work package" (Portny, n.d.).

Portny (n.d.) continues stating: “Suppose you are planning a project to design and produce a company brochure. You already have the following information:
  • You estimate that you’ll spend 200 person-hours on the project at $30 per hour and that Mary will spend 100 person-hours at $25 per hour.
  • You estimate that the cost of the stationery for the brochures will be $1,000.
  • You estimate $300 in travel costs to visit vendors and suppliers.
  • You expect to pay a vendor $5,000 for the brochure’s artwork.
  • Your organization has a combined indirect cost rate of 60 percent of direct labor costs” 
(Portny, n.d.). 

Project Budget Estimate for a Company Brochure



                                                                                                                                              (Portny, n.d.).


References

Bright Hub Inc. (2012). Constructing a RACI Matrix. Examples of how a PM would conduct different phases of RASCI. Retrieved from http://www.brighthubpm.com/templates-forms/53552-constructing-a-raci-matrix/.

Laureate Educational Inc. (2010). Creating a resource allocation plan. [DVD Media], Dr. Harold Stolovich.

Portny, S., E. (n.d.). Project Management for Dummies, 3rd Edition. Retrieved from http://www.dummies.com/how-to/content/create-a-budget-estimate-using-the-bottomup-approa.html.

Portny, S. E., Mantel, S. J., Meredith, J. R., Shafer, S. M., Sutton, M. M., & Kramer, B. E. (2008). Project management: Planning, scheduling, and controlling projects. Hoboken, NJ: John Wiley & Sons, Inc.

8 comments:

  1. Thank you for sharing with us the Project Management Software from Microsoft. I was unaware of th8s and now that I have viewed this, I can see how it will be greatly helpful in the future.It seems like there is so very much to learn and having something like this will help make it easier.

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    1. You are so welcome, Sherry. Conducting the budget is also a challenge to me in that I am learning to maneuver the Project interface, which does take a little time. I also found SmartSheets to be very good too. It does not have all the interactivity and maneuverings of Project. The interface is very navigable for persons new to working allocation of resources, estimating cost for the budget of your project. I hope you well in completing the project you select.

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  2. I too want to thank you for finding the PM software. At first it looked confusing but I then took another look and realized it could definately come in handy as we finalize our projects.

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    1. You are so welcome Paul. I left a message on your blog. Check out SmartSheets. You may find it more user friendly than Project.

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  3. Thank you for the information you presented. I can see your point about how having the time to learn the tools that you presented. It really seems that there is a learning curve associated with the software. Great Job!

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    1. You are so welcome Norris. I found yet another tool you can use from Bright Hub Inc. (2012. Just look around and you will find Smartsheets or just type into your browser. I find that tool to be user friendly because there are not all those drop down menus, buttons, and sliders to contend with...it is very straightforward.

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  4. Reporting to the Chief Projects Manager, the Project Manager will work in consultation and lead a team of highly experienced technical team and consultants in delivery of the projects. kualitee offers test management services, bug management services and Project Management Services nice job keep it up

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    1. Thanks for the comment Rock Den. Moreover, you are so welcome. Are you a student of Walden University? I see you are a real Project Manager, WOW! I checked your three blogs out and find you are in England. I was there many years ago enroute to Nigeria. I Love it and had a great time!

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