.net barcode reader sdk 7: Project Cost Management in Software

Printer UPC-A in Software 7: Project Cost Management

7: Project Cost Management
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Accurately reporting to appropriate stakeholders all approved changes and costs Managing any cost overruns within the acceptable limits (consistent with approved contingency reserves)
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The bottom-line intent of project cost control is to effectively manage the approved budget and seek out potential impact variances (both positive and negative) against the budget The best way to ensure cost control is through effective change management and close monitoring and reporting of earned value
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For readers not planning to pursue PMI s PMP exam in the near future, I recommend you scan this section for a high-level overview and not for detailed comprehension You can always come back to this chapter later when you are ready to prepare for PM certification
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PMBOK, Fourth Edition shows six tools and techniques for this process, which will be discussed in this section The first to be discussed is earned value management (EVM) EVM is growing in popularity, especially in large companies and on government projects Some companies even have an earned value analyst (EVA) working with the project managers and teams across multiple projects, tracking and reporting on their EV status using a consistent format and frequency
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Earned value management involves a number of concepts, calculations, and methods that are performed by today s high-tech PM software tools Even the more experienced project manager is often not completely comfortable with EV tracking because it requires extra time and a degree of judgment on when/how to report the completion and progress of activities
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Earned value management can be used in various ways EVM is most often used as a method of measuring project performance in dollars and cents The principle of EVM is used to develop and monitor three key dimensions (components) for each work package (or at the control account level) To manage EV, you collect key data at regular intervals (for example, weekly or monthly, depending on the size and duration of the project) to
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establish a checkpoint (snapshot) in time to measure progress on your project The key dimensions of EVM are as follows:
Planned value (PV) This is the authorized budget assigned to the work planned to be accomplished based on historical or expert knowledge for activities or work packages Planned value is the amount you planned to spend at a given time on the project If nothing changes, the original PV adds up to be the budget at completion (BAC) at the end of the project Actual cost (AC) The total cost actually incurred and recorded for the work performed
NOTE
Tracking and reporting actual cost can be somewhat elusive in the case of delayed invoices from suppliers, allocated costs that are apportioned across multiple projects, and missed or hidden charges
Earned value (EV) The value of the work performed (for example, those activities or work packages that are complete and should receive appropriate credit for the expected dollar value they are assigned) EV must be compared to the PV baseline and actual cost (AC) to determine schedule and cost variance
Earned value should clearly show not just how much of your budget has been spent (AC) against what you thought you were going to spend (PV), but it should also show the value of work completed (EV) EV is becoming more widely used, especially in large companies and government projects
When reporting the progress of work performed and EV in dollars and cents for a particular activity or work package, use the progress-reporting rules introduced in 6:
50/50 rule Fifty percent credit for the value of an activity when it begins and 50 percent when complete 20/80 rule Twenty percent credit for the value of an activity when it begins and 80 percent when complete 0/100 rule Zero percent credit when the activity begins and 100 percent credit when it is complete
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