Project Management Project Planning Costs & Budget neil@minkley.fr.

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<p>Project Management</p> <p>Project ManagementProject PlanningCosts &amp; Budgetneil@minkley.fr1Project planning processesDefine scope &amp; collect requirementsDevelop scheduleDetermine budgetCreate WBSDefine tasksSequence tasksEstimate task resourcesPlan procurementsEstimate costsPlan communicationsPlan qualityEstimate task durationsDevelop human resource planPlan risk management, identify &amp; analyze risks2Planning processes: where do we stand?Scope defined &amp; requirements collectedSchedule developedWBS createdTasks definedTasks sequencedTask resources estimatedPlan procurementsPlan communicationsPlan qualityTask durations estimatedDevelop human resource planPlan risk management, identify &amp; analyze risksDetermine budgetEstimate costs3Estimate costs &amp; Determine budgetDefine scope &amp; collect requirementsDevelop scheduleDetermine budgetCreate WBSDefine tasksSequence tasksEstimate task resourcesPlan procurementsEstimate costsPlan communicationsPlan qualityEstimate task durationsDevelop human resource planPlan risk management, identify &amp; analyze risks4Estimate costs (1)Develop scheduleDetermine budgetEstimate costsEstimate the cost of each of the resources needed to successfully complete the project tasksCosts expressed in numbers of monetary unitsEstimate task resourcesEstimate task durations5Estimate costs (2)Develop scheduleDetermine budgetEstimate costsEstimates may incorporate a contingency reserve to take into account changes due to the realization of potential risksEstimates refined as the project moves forward and more details are availableEstimate task resourcesEstimate task durations6Costs (1)LabourOverheadHiringOffices</p> <p>7Costs (2)WorkstationsServersOther equipmentSupplies</p> <p>8Costs (3)MaterialsDocumentationCompetitors productsMultimedia assets</p> <p>9Costs (4)TravelEvents</p> <p>10Costs (5)ServicesConsultancyContractors</p> <p>11Cost of salaried employees (example)Weeks per year52Days per year excluding weekends260Public holidays10Total potential working days250Vacation days30Total actual working days in a year220Gross annual salary36,000Employer's social contributions (%)50%Employer's social contributions18,000Annual cost excluding overhead54,000Overhead (%)33%Overhead17,820Annual cost including overhead71,820Total cost / gross salary2Cost per day of work326Taking idle time into account:add 10% or so to cost per dayorcount 200 workdays per yearCost per day = Gross annual salary / 10012Project EXONE labour costs (1)Project managerSenior technical consultantJunior technical consultantDeveloper 1Developer 2Tester 1Tester 2Client</p> <p>13</p> <p>Project EXONE labour costs (2)14</p> <p>Example of other costs (1): project EXONE15</p> <p>Example of other costs (2): project EXONE16Questions?17Estimate costs &amp; Determine budgetDefine scope &amp; collect requirementsDevelop scheduleDetermine budgetCreate WBSDefine tasksSequence tasksEstimate task resourcesPlan procurementsEstimate costsPlan communicationsPlan qualityEstimate task durationsDevelop human resource planPlan risk management, identify &amp; analyze risks18Determine budget (1)Estimate costsAdd up all estimated costsThe budget should be officially approved by the project sponsorDetermine budget19Determine budget (2)Estimate costsAuthorized budget = baseline for the evaluation of the cost performance of the project May incorporate management reserve to provide for imponderablesDetermine budget20Determine budget (3)Estimate costsA contractors budget for the execution of work for a client should include a profit margin Price = total cost of work + marginDetermine budget21Reminder: Margin &amp; Mark-upMargin (profit) = 20</p> <p>Margin% = 20/100 = 20%</p> <p>Mark-up% = 20/80 = 25%Price paid by the clientCost of project for the contractor1008020Price = Cost/(1-Margin%) Mark-up% = 1/(1-Margin%) - 1 22Example of profit marginEstimate costsEstimated cost = 100,000 Required margin = 20%Price = Cost / (1-Margin%) = 100,000 / 0.8Amount invoiced to client = 125,000 25% mark-up(100,000 x 1.25 = 125,000)Determine budget23</p> <p>EXONE: costs24EXONE: summary budget - ContractorProject EXONE: contractor's budgetEstimated cost of project66,575Management reserve (10% of estimated cost)6,658Total cost of project73,233Mark-up% (% of total cost of project)25%Mark-up amount18,308BUDGET (price to be paid by the client)91,541Profit margin amount18,308Profit margin % (% of budget/price)20%25EXONE: summary budget - ClientProject EXONE: client's budgetUnitsUnit costsTotal costsInternal costsContent creation8030024,000Data preparation &amp; delivery (sample and final)104004,000Product testing (alpha, beta &amp; final)103003,000Project management3545015,750Total Internal costs46,750External costsSoftware development91,541Content proofreading202505,000Product testing (beta &amp; final)53501,750Multimedia asset licences302507,500Server and software13,0003,000Total External costs108,791TOTAL Cost155,541Management reserve (10% of total cost)15,554BUDGET171,09526Questions?27Planning processes: where do we stand?Scope defined &amp; requirements collectedSchedule developedBudget determinedWBS createdTasks definedTasks sequencedTask resources estimatedPlan procurementsCosts estimatedPlan communicationsPlan qualityTask durations estimatedDevelop human resource planPlan risk management, identify &amp; analyze risks28</p>

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