Management of Projects and Costing - Case Study Example

Introduction

Project management is a process that involves utilization of a wide range of tools, skills, knowledge, and approaches to meet the specific requirements of a project and ensure that the project task is completed with the scheduled time and resources. Project management involves several phases namely project initiation phase, planning and requirements definition, project execution, performance and control and finally project closure. Therefore, this paper provides a project plan for developing a project costing system that performs a variety of activities such as creating baselines cost and forecasting cash flows.

Scope Statement

Project scope statement is a brief statement that explains what the project will cover, and what area will be covered as well as the assumptions and constraints that the project may experience. In this plan, the project that is to be carried out by the project IT Manager and the technical team. The project financiers will be financial institutions such as the banks. The project will involve developing a costing system that will execute a broad range of task in an organization including cash flow forecast and create base lines cost. The justification why the project is costing should be set up because most business is facing with problems on managing their cost and cash flow and hence the creation of project costing system will provide them with a solution to their problem. Besides, the new costing system will help to improve efficiency and productivity of most organizations. It is assumed that the project will be carried out within the scheduled time as indicated in the plan. Besides, it is assumed that the project will cost $57,550. Time, resources and coordination among the team members will be among the constraints that the project will face. However, such will be overcome by working extra hours and also ensuring there is a seamless flow of information to enhance coordination among the team members.

Estimates

The project for developing a costing system may be based on the underlying estimates namely analogous explanation, Parametric with dependent and independent variables and Bottom-up estimate and reorder of magnitude estimates (ROM). In this project, parametric estimates were employed. Under the parametric estimates, the relationship of project known characteristics and historical resources consumed by a project are frankly revealed. Based on the parametric estimates, the project will have five main independent variables that will cost 64607 dollars. On the contrary, the dependent variables will be built on a percentage to be included in the appendices 1.4.

Project Stakeholders management plan

Anyone who has invested in a project and may influence its budget or future is referred to as a stakeholder. It is their right that they are included in the running and progress of the project through regular updates. Most projects and portfolios will have multiple stakeholders with diverse interests which may affect the outcomes of the project. The stakeholder management plan that is constructed should be all inclusive to feature all of the parties involved. A stakeholder management plan entails an orderly identification, examination, planning, and implementation of procedures meant to engage all stakeholders in a project. It should be dynamic since it is a living document which will need an update as the project evolves and stakeholders change.

An ideal stakeholder management plan should be composed of four parts; stakeholders identification, assessment of their influence and interest, development of a communication plan and lastly engagement of stakeholders. Identification of interested parties will be the first activity carried out in the development of a stakeholder management plan. This will be done by reviewing the project charter and contract documents, interviewing of experts and conducting of brainstorming sessions. A project charter is a set of documents that authorize projects and allows for the appointment of a project manager. It also contains the names of top managers of the project, the objectives, budget, constraints, and assumptions among other important details on the project. From this document, some potential influential stakeholders can be identified. Experts who are specialized in the field will be consulted to find out people who are interested in investing in the project. Brainstorming sessions with team members will also be handy in the identification of stakeholders. Identification of stakeholders is a continuous process that will go on throughout the cycle of the project. If this part is ruled out, then the success of the project will be derailed. The second step in developing of our stakeholder management plan will be the assessment of stakeholder interest and influence.

The stakeholders in a project may hold diverse interests, and the level of commitment to the project shows the magnitude of their interest. This is important because it brings to the table ideas from different backgrounds ensuring a more inclusive project and amplifies the reliability of the organization. The next step will involve the development of a communication plan with the stakeholders to ensure that they are briefed at every step in the running of the project. Lastly, the project manager should have a detailed strategy in engaging the stakeholders in the project. Several tools can be used to ensure that they are incorporated in the running of the project and give their contribution towards it. The easiest and most convenient method is the employment of technology in connecting all the stakeholders and managers through consultations in the project. In some cases, it might be necessary to use a mix of digital and traditional tools of engagement to complement each other. If the stakeholder is satisfied with the running of the project, it is more likely that they will be more willing to make their various contributions without hesitation.

Work Breakdown Structure

Work breakdown structure helps to define the task that needs to be done to come up with a particular product or a system at the end of the project. The work breakdown structure helps to divide the work in a hierarchical manner indicating how the project will be executed from the beginning to the end. It also shows the timelines when the project will start and the time when the project is anticipated to be completed. Work breakdown structure is an essential element of the project because it provides the project managers and the project team members with a clear overview of what they are expected to do. Besides, it allows the project manager to work within the scheduled by identifying a critical task that must be executed together with other activities to ensure the work is completed within the scheduled time. Below is a work breakdown structure for developing a new costing system.

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Communication Plan

Once the project stakeholders have been identified, a plan is necessary to ensure they receive all the information needed in regards to the project. It is also important that the level of involvement and interest of the stakeholders is analyzed before making the communication plan to determine the amount of detail that each of them will require. It is also important to identify the kind of information that the stakeholders may need to avoid flooding them with unnecessary information. A stakeholder communication plan develops from the information and results of the management plan. It should contain the list of various stakeholders who require being given communications. The type will categorize this information, frequency and amount of detail required. It may make sense to stipulate the communications plan instantaneously after the blueprint, or they may be merged as two parts of a single program. Typically the stakeholders will not have access to the whole communication plan at one go because it developed at every step of the project to fit the changing situations. They will, however, get accustomed to getting the communication plan on a regular basis for example through weekly emails and reports.

Risk analysis

In project management risk analysis is a process that aimed at identifying and analyzing events and factors that may threaten the project life and may prevent successful completion of type project within the required time and budgeted resources. Some of the project risk includes time risk, lack of adequate resources, conflicts among project team members among other factors. If the project is not completed within the scheduled time, it implies that the project has failed and hence it may require injection of additional time and resources to ensure that it is completed. However, such resources may not be at disposal, and hence the project may end up remaining stagnant for a very long time. Also, conflict among the project team members makes coordination not possible, and hence it may end up doing the project to fail. It is imperative for the project team leaders to ensure that conflicts within the team are adequately addressed to prevent project coming to a halt which consequently heightens project risk. Risk analysis in it project such as the one being undertaken in this case requires proper documentation and utilization of both qualitative and quantitative techniques of solving such risk. Quantitative risk analysis may involve determining the likelihood of various events happening and the extent of such events to taking place. On the contrary, qualitative risk analysis does not use probabilities and quantitative techniques to predict threats or any form of risk that may face a project. In this project, risk analytical report was utilized to align the objectives of the developing project costing system

Procurement Plan

A project procurement plan has to be developed for every project to provide a generalized projection of goods and services that the project is likely to need. The next step will involve giving of detailed information of the vendors, service providers, and products plus their costs as well as who is going to oversee the drafting, signing, and actualization of contracts. Before a procurement plan is drafted, it is essential that we obtain a strong understanding of the market dynamics within the industry that we are working in and carry out spend and need analysis. The procurement plan should look into what is required for the project, how much it costs and who can provide it at the best prices. Data on this can be obtained from past similar projects that have been carried out or by getting advice from experts in the field. A well thought of plan will also allow the managers to see if the plans are realistic and achievable within the given timelines of the project. Materials and services will be designed for regarding what stage they are needed in the project to avoid stalling of the project. The procurement plan should be approved and signed by the relevant persons before it can be implemented. A well-planned procurement plan will pave the way for smooth implementation of the project.

Gantt chart

Gantt chart is a tool for planning and scheduling project to determine a task that is most critical and these that should be completed earlier before time lapses. Gantt chart indicates the critical path and helps the project manager to prioritize the most critical activities. Gantt chart displays events against time such that even a person who has little or no background in project management can be in a position to tell about the progress of a project. The Gantt chart below indicates activities against time for developing a costing system that will help to execute different financial task including costing and forecasting cash flows. The red line shows the most critical activities that must be undertaken concurrently.

Critical Chain

Critical chain is a scheduling method that emphasizes the resources required to carry out project tasks. This includes the people, physical space, and equipment that will be necessary for running of the project. It is composed of three sections namely planning phase, execution phase and review phase. Aspects of the project will be executed based on priority and timelines for completion. The review phase is done after completion of the project to verify if the goals set at the beginning of the project have been met and possible areas that may not have been achieved. This is done in the form of written reports and may be used in future projects for reference. Using this method projects can be completed on time, have excellent reliability and reduce uncertainties that may be brought about by poor planning.

Cost Baselines

Cost baseline is part of project management baselines such as scope and schedule baselines. Cost baseline indicates the amount of money that a project is going to spend. It normally has two parts manly when the money is going to be spent and is represented by the time and the second part involves predicted the amount of money that a project will spend. In this plan developing of costing software will include a project baseline that indicates factors that have not been covered in work breakdown structure and Gantt chart.