Chapter 6: Project Cost Management
Chapter 6: Project Cost Management
Learning Objectives Understand the importance of good project cost management Explain basic cost management principles, concepts, and terms Describe the resource planning, cost estimating, cost budgeting, and cost control processes Explain the different types of cost estimates Understand what is involved in preparing a cost estimate for an information technology project Perform calculations for earned value manageme Understand the benefits of using earned value management Describe how software can assist in project cost management 2021/2/21
2021/2/21 2 Learning Objectives ◼ Understand the importance of good project cost management ◼ Explain basic cost management principles, concepts, and terms ◼ Describe the resource planning, cost estimating, cost budgeting, and cost control processes ◼ Explain the different types of cost estimates ◼ Understand what is involved in preparing a cost estimate for an information technology project ◼ Perform calculations for earned value management ◼ Understand the benefits of using earned value management ◼ Describe how software can assist in project cost management
Chapter outline 6. 1 The Importance of project Cost management 6.2 Basic Principles of Cost management 6.3 Resource Planning 6.4 Cost Estimating 6. 4. 1 Types of Cost Estimates 6.4.2 Cost Estimation Tools and techniques 6.4.3 Typical Problems with Information Technology Cost Estimates 6.4.4 Sample Cost Estimates and Supporting Detail for an Information Technology project 6.5 Cost Budgeting 6.6 Cost Control 6.6. 1 Earned Value Management 6.7 Using Software to Assist in Cost Management 2021/2/21 3
2021/2/21 3 Chapter Outline ◼ 6.1 The Importance of Project Cost Management ◼ 6.2 Basic Principles of Cost Management ◼ 6.3 Resource Planning ◼ 6.4 Cost Estimating ◼ 6.4.1 Types of Cost Estimates ◼ 6.4.2Cost Estimation Tools and Techniques ◼ 6.4.3 Typical Problems with Information Technology Cost Estimates ◼ 6.4.4 Sample Cost Estimates and Supporting Detail for an Information Technology Project ◼ 6.5 Cost Budgeting ◼ 6.6 Cost Control ◼ 6.6.1 Earned Value Management ◼ 6.7 Using Software to Assist in Cost Management
6. 1 The Importance of Project Cost management
6.1 The Importance of Project Cost Management
The Importance 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 In 1995, cancelled i projects cost the U.S. over $81 billion 2021/2/21
2021/2/21 5 The Importance ◼ 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 ◼ In 1995, cancelled IT projects cost the U.S. over $81 billion