1. Diploma Project Management
Captain Cook College
Sharon Boyle

2.  Presentation
 Discussion revision through discussion around Assessment Items
◦ Assessment items for Cost Unit including structure for CMP
◦ Confirmed & agreed date for Project management meeting
Morning Tea
◦ Earned Value Analysis
◦ Variations & Closeouts
 Work on either cost management plan or
 LMS questions
Lunch
 Discuss answers for Activities 1 & 3 – leave Written/Oral to
next week
 Continue working on LMS
◦ Tomorrow
◦ Project Meeting

3.  No. 1.
 Prepare a Cost management plan for Fred’s Shed – Mr Jones job and
include a detailed project budget.
 No 2.
 Analyse scenario to be provided & insert into baselined budget. Note
variances
 No 3.
 Provide progress report - this will include the Variance analysis from
Scope & Time Units.
 No 4.
 Attend a Project Meeting where progress will be presented based on
progress reports prepared in Scope, Time & cost units.
 Each student is required to attend the meeting, play the role requested
and prepare a set of minutes.

4.  Prepare a Cost management plan for Fred’s
Shed – Mr Jones job and include a detailed
project budget.
 What is the purpose of a cost management
plan?
 Major components?
 Use scaled down template provided

5.  TABLE OF CONTENTS
◦ Introduction
◦ Cost Management Approach
◦ Measuring Project Costs
◦ Reporting Format
◦ Cost Variance Response Process
◦ Cost Change Control Process
◦ Project Budget

6.  A brief scenario will be provided which
impacts on time & cost.
 Update your budget in Assessment Item 1.
 Describe the impacts on the budget.
 Use the template but just the appropriate
sections

7.  Provide progress report - this will include
the Variance analysis from Scope & Time
Units.
 Use the template provided

8.  Each student is required to attend the
meeting, play the role requested and prepare
a set of minutes.
 Date 25 January
 Agenda will be prepared & sent out by Jamie
 Everyone required to prepare minutes of
meeting

9.  Project Manager - Jamie
 Assistant PM - Kevin
 Cost controller – Jerzy
 Scheduler - Chas
 Client – Mr Jones - Dennis
 CEO – Fred - Sylvester
 Note taker - Winni

10.  Remember
◦ LMS – don’t bother with Activity 2.
◦ Written/Oral for next week.
 Cost management plan –
◦ use structure provided or do up your own
◦ Must include budget for Fred’s shed
◦ Consider EVA after next week’s lectures & video

12.  1. Determine project costs
 2. Monitor and control project costs
 3. Conduct financial completion activities

14. 1. EVM an overview
2. Basic Elements
3. Cost Variances
4. Schedule Variances

15.  Different ways of presenting information
◦ Numbers eg
◦ Graphs
◦ Analysis & indices

16.  S-curve –
◦ expenditure &
income
◦ throughout
lifecycle
 Earned Value
Theory

18.  tracking tools upon which to base forecasts
 Integrates scope, schedule & cost
 Answers many questions stakeholders need
 Performance can be shown as
◦ Past
◦ Current
◦ Predictive
 Promises to reduce over-runs

19.  financial analysis specialty from United States
Government programs in the 1960s,
 Now significant branch of project
management.
 In the late 1980s and early 1990s, EVM
emerged as a project management
methodology
 EVM has become an essential part of every
project tracking.

20.  http://www.youtube.com/watch?v=7WsfuvHe
gxE

21.  Planned Value
◦ (PV) = PV or Budgeted cost of work scheduled BCWS
= Hourly Rate * Total Hours Planned or Scheduled
 Actual Cost
◦ (AC) = hourly rate x total hours spent
 Earned Value
◦ (EV)= Baselined costs x % complete
 % Completed Planned
◦ % Completed planning =PV/BAC

22.  Cost Variance (CV) indicates how much over
or under budget the project is.
 Why is under cost a problem?
 (CV) = Earned Value (EV) – Actual Cost (AC)
 Also
 CV = BCWP – ACWP
◦ Positive Cost Variance Indicates the project is under
budget
◦ Negative Cost Variance Indicates the project is over
budget

23.  Cost Variance % - how much over or under
budget the project is in terms of percentage
 CV% = CV/EV
◦ Or
 CV% = CV/Budgeted Cost of Work

24.  CPI = EV/AC
 Shows how efficient we are
 Above 1 good efficiency
 Below 1 project not using resources
efficiently

25.  TCPI = Total Budget – EV/Total Budget – AC
 Another measure of efficiency –
◦ The correct people do the correct things within a
clear process
◦ Above 1 utilization must be stringent
◦ Below 1 lenient.

26.  Schedule Variance (SV) = Earned Value (EV) -
Planned Value (PV)
 How much is yet to be completed as per
schedule
 +ve Schedule variances = we are ahead of
time
 -ve Schedule variance = we are behind
schedule
 Then same % as for Costs

27.  Budget at Completion = total budget
 BAC = Baselined effort hours x hourly rate
 Estimate to complete – just what it says.
 Estimate hours required x hourly rate

28.  http://www.youtube.com/watch?v=7WsfuvHe
gxE&feature=related

30.  Activity 1.
 Activity 3.

32.  Conduct appropriate close out activities
◦ Has everyone been paid?
◦ What about the variations?
◦ Where do we stand?
◦ Detailed records must be kept
◦ Any lessons learnt?