Fundamental of Project Budgeting & Cost Management

ABOUT COURSE 

This  training course equips you with the ability to prepare and control budgets, and confidently manage costs within your project's commercial framework.

During the training course you will address three broad themes that underpin project cost:

  • The project budget - What is the project budget and how does it compare to the final cost
  • Cost estimating - How do we develop an estimate of the cost - and does this differ between client, designer and contractor
  • Risk and value - How are risk and value incorporated into the budget

Set against a background of estimating in the construction industry you will explore the elements of project cost and how budgets are established. Working from first principles, cost build up and bills of quantities will be developed and tested using case studies. Contractor tender pricing processes and the effects of risk, value and decision making on project costs will be explored.

Objectives:

  • Understand the benefits of good project cost control for successful project outcomes
  • Use best practice to minimise costs and negative impacts
  • Describe a typical project cost management lifecycle
  • Explain the action required at each phase of the project cost management lifecycle and understand the significance of each phase
  • List the key attributes of cost necessary to understand and manage cost effectively
  • Explain the key steps required to improve project estimates, budget and cost base lining, performance measurement and analysis, cost monitoring and control during project execution and interpreting and reporting project performance throughout a technical project lifecycle
  • Specify key quantitative measures for determining the project performance using Earned Value Management (EVM)
  • Provide meaningful project progress reports using EVM together with forecasts of likely outcomes and management options to correct where necessary
  • Apply this cost management process to a simple case study

 Who Should Attend?

  • Project managers and project team leaders who wish to build upon and consolidate their project management skills
  • Project planning engineers and heads who need to develop their project management skills
  • Senior project control and business services professionals who have the responsibility for planning, monitoring and controlling, and reporting on project
  • budget and cost performance

Course Outline:

An Overview of Project Management

In this module the participants will learn the PMI PMBoK® globally accepted standard approach to managing projects. This will provide the context for developing and managing the project budget. This module will cover:

  • Basic Project Management definitions
  • The PMI PMBoK® project management processes
  • Project phases and life cycles
  • Typical project terminology
  • Setting up for success
  • The project cost management processes – estimate costs, determine budget and control costs

Developing the project schedule – estimating cost

The basis for good cost control is the development of an accurate Work Breakdown Structure (WBS) on which the work packages depend for accurate estimation. In this module we will create the overall project schedule and learn how the project cost is tied to each individual project activity. This module will cover:

  • Understanding project management inputs to estimating cost
  • Creating the work breakdown structure (WBS)
  • Work Packages as building blocks
  • Estimation techniques
  • Optimising the schedule
  • Estimating the overall project cost

Developing the project budget – determining budget

Whether working on a simple or complex project all project managers need to develop an accurate budget based on the total resources required for their project. Here the participants will learn how to create the detailed budget and the cost baseline necessary for project control. This module will cover:

  • Understanding project management inputs to determining budget
  • Estimating personnel, materials and equipment costing including overheads
  • Considering the risk management process, risk response planning and risk reserves
  • Estimating Risk Response costs, and Reserve or Contingency cost
  • The S-Curve for risk and for cost

Utilizing Control Accounts and effectively controlling project costs

In this module the participants will learn about setting up Control Accounts, the Project Cost Performance Baseline and the necessary steps to monitoring and controlling the project budget. This module will cover:

  • Control Accounts and the Control Account Plan (CAP)
  • Understanding what measures are required
  • Change Control processes and re-base lining the cost performance baseline
  • Understanding project management inputs to controlling costs
  • Identifying and managing hours worked
  • Tracking costs

Project performance measurement, Interpreting and Reporting EVM results

Whether or not the project manager is familiar with Earned Value Management, it is rapidly becoming the favoured means of tracking project performance.  In this module the participants will learn that for large, complex projects the most accurate way to track progress and performance is through Earned Value Management. Participants will learn about measuring and interpreting EVM results and how to report project status to senior management and customers. This module covers:

  • What is Earned Value Management (EVM)?
  • What are the main measures used for EVM?
  • Analysing results – variances, performance indices and forecasting
  • Interpreting results and considering options to redress unacceptable variances
  • Forecasting and developing response plans

Reporting EVM to senior management and customers

Certificates

A Certificate of Completion will be issued to those who attend & successfully complete the programme.

Schedule

  08:30 – 10:15 First Session

 10:15 – 10:30 Coffee Break

10:30 – 12:15 Second Session

 12:15 – 12:30 Coffee Break

12:30 – 14:00 Third Session

 14:00 – 15:00 Lunch

 Fees

 The Fee for the seminar, including instruction materials, documentation, lunch, coffee/tea breaks & snack is:

 

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