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Project Management Certificate Program define project budget

Project Management Certificate Program define project budget. Module 8. Module Objectives. By module end, you will be able to: Understand how to plan Budget and Quality for a project Understand the purpose for using these processes for the project or phase

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Project Management Certificate Program define project budget

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  1. Project Management Certificate Program define project budget Module 8

  2. Module Objectives By module end, you will be able to: • Understand how to plan Budget and Quality for a project • Understand the purpose for using these processes for the project or phase • Understand what tools will be used to plan the Budget

  3. Plan Project Budget • Plan Project Budget is performed to develop the budget for the project • The outcomes desired from the budgeting processes are: • Purchasing decisions should be determined and made • The selected vendor will finalize a contract • The project budget will be fully defined

  4. Plan Project Budget Key Tasks: • Develop project cost estimates • Verify cost estimates are complete • Utilize make-or-buy analysis • Request vendor proposals • Evaluate proposals • Award contract to selected seller/vendor • Allocate overall costs to individual activities • Determine contingency and management reserves • Develop cost baseline

  5. Plan Project Budget In Plan Project Budget, 4 PMBOK processes are used: • Estimate Costs (Cost) • Plan Procurements (Procurement, used with Cost) • Conduct Procurements (Procurement, used with Cost) • Determine Budget (Cost)

  6. Estimate Costs • Process of determining the estimated costs of resources; it includes: • Direct resources • Labor, materials and equipment • Indirect costs • Contingency cost reserves, inflation allowances, cost of quality and overhead • Estimates may be reported in detail or summary form

  7. Estimate Costs Think about the practical application of this process : • Process Documents • Document Templates • Process Tasks • Think About It Exercise

  8. Must Know Concepts

  9. Plan Procurements • Planning process used to document decisions regarding purchasing and acquisition • Identifies potential sellers for required resources • Three primary activities occur: • Make-or-buy decision making • Selecting the type of contract • Creating the Procurement Management Plan

  10. Plan Procurements Think about the practical application of this process : • Process Documents • Document Templates • Process Tasks • Think About It Exercise

  11. Must Know Concepts

  12. Conduct Procurements • Used to solicit and obtain the projects external resources, includes: • Obtaining seller responses & bids • Selection of a seller or sellers • Awarding contracts • Project manager (or purchasing department) will notify sellers of the potential need by providing appropriate procurement documents

  13. Conduct Procurements • Project manager (or purchasing department) will receive proposals from the seller • Statements of work and evaluation criteria developed during “Plan Procurements” may be used

  14. Conduct Procurements Think about the practical application of this process : • Process Documents • Document Templates • Process Tasks • Think About It Exercise

  15. Must Know Concepts

  16. Determine Budget • Project budget is sometimes termed the “Project Cost Baseline” or “Performance Measurement Baseline (PMB) • The cost performance baseline is the time-phased budget • It is used to monitor and measure project cost performance across remaining project phases

  17. Determine Budget • When using Earned Value Techniques, the Performance Measurement Baseline is represented by Budget at Completion(BAC) • Cost performance baselines are typically illustrated using graphs • Plotted cost baselines usually form an S-Curve appearance.

  18. Determine Budget

  19. Cost Baseline • AKA Cumulative Cost Curve or “S Curve” • Time-phased budget used to measure and monitor cost performance on the project (Performance Measurement Baseline – PMB) • Integrates the budget with the schedule • Typically represented graphically

  20. End of Project Period Costs $ Period Typical Incremental Cost Curve Planning Phases Execution Phase Stages Closure Phase Bulk of the work and costs will occur here

  21. Typical Cumulative Cost Curve “Cost Baseline” or “S” Curve End of Project Project will cost this much Cumulative Costs $ And take this long Period

  22. Reserves • Contingency • Included in project budget • To deal with minor cost variances • And in particular to anticipate risk • Management Reserve • Held outside the project budget • To deal with major unknowns • Sometimes as a management control

  23. Determine Budget Think about the practical application of this process : • Process Documents • Document Templates • Process Tasks • Think About It Exercise

  24. Must Know Concepts

  25. MODULE Review

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