See Chapter 7 in the PMBOK ® Guide.
Project
Management, A Systems Approach to Planning, Scheduling, and Controlling,
Seventh Edition by Harold Kerzner, PHD has some excellent additional
material on benefit/cost analysis, depreciation, NPV, etc.
The
WBS on PMBOK ® Guide Page 84 is as follows:
1. Resource
Planning
2. Cost Estimating
3. Cost Budgeting
4. Cost Control
Comments:
1. Assign
people, equipment and materials to the activities in your schedule.
Typically you assign senior people at a low percentage, e.g. 10%,
and junior people at a higher percentage. You have to take other
projects and non project work into account and there is often a
considerable amount of negotiation required. Use templates loaded
with generic resources. See our PMMP Checklist.
2. There is something magical about getting “free” cost
estimates, using the new project management tools.
3. In the bad old days you generally won the job on the basis of
your cost estimate and did the schedule after the job was awarded.
Budgeting was a big job because of the different Work Breakdown
Structures (WBS) used in the cost estimate (high level) and in the
schedule (detailed). These days this approach is almost heresy.
How can you know what a project is going to cost if you don’t
know how long it is going to take? It is often so easy and fast
to do the schedule first, particularly if you have schedule templates
from previous similar projects. Remember too, that the cost baseline
may not be realistic until the schedule has been resource leveled.
The initial Planned Value is often hopelessly skewed and unrealistic.
4. Cost Control remains a challenge for many companies. It is often
difficult to collect actual cost information at the activity level
in time to correct a problem. See Project Communication Management,
Chapter 10 in the PMBOK ® Guide, and our PMMP Checklist.
With
application of resource demands, the schedule provides both a cost
estimate and cash flow projections. Leveling remains one of the
most powerful tools for increasing
profits and avoiding negative impacts. The software can also be
automated to calculate Estimate at Completion based on current performance.
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