Inf337 Week 5
Cost and Value Management Principles
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INF 337: Integrated Cost & Schedule Control
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Date
Cost and Value management is becoming a large part of companies competing in today’s market. According to the text, “projects and their effective management can provide organizations with a significant competitive edge through cost reduction, enhanced responsiveness, and overall value to customers.” (Venkataraman & Pinto, 2008, p. 1). In this paper we are going to focus on some of the techniques and how they can either help or hinder a project. Through information and examples we will explore the importance of work packages and the work breakdown structure (WBS), establishing a cost and schedule performance measurement baseline, earned value management (EVM) and how it relates to the project status, how the use of control charts affect status and value, and finally how effective change management processes can ensure a successful project. There are multiple parts to an initial project startup. A project manager will identify a need, define a scope and then flow down into the work breakdown structure (WBS). “The WBS is a hierarchical structure in which all of the major phases of project work are organized in a logical manner.” (Venkataraman & Pinto, 2008, p. 32). This combines all aspects of the initial stages of project development and planning into one workable document. This becomes a base for the project manager to keep an eye on how the project is progressing as well as to relate the costs of the project at the different stages. The WBS is going to initially start with the overall project, broken down into deliverables and then into the separate work packages that relate to those deliverables. The three main types of WBS’s are product based WBS, organizational based WBS, and process based WBS. In my organization we are an aerospace part manufacturing plant and we produce a product that goes through numerous processes
XXXXXXXX
INF 337: Integrated Cost & Schedule Control
XXXXXXX
Date
Cost and Value management is becoming a large part of companies competing in today’s market. According to the text, “projects and their effective management can provide organizations with a significant competitive edge through cost reduction, enhanced responsiveness, and overall value to customers.” (Venkataraman & Pinto, 2008, p. 1). In this paper we are going to focus on some of the techniques and how they can either help or hinder a project. Through information and examples we will explore the importance of work packages and the work breakdown structure (WBS), establishing a cost and schedule performance measurement baseline, earned value management (EVM) and how it relates to the project status, how the use of control charts affect status and value, and finally how effective change management processes can ensure a successful project. There are multiple parts to an initial project startup. A project manager will identify a need, define a scope and then flow down into the work breakdown structure (WBS). “The WBS is a hierarchical structure in which all of the major phases of project work are organized in a logical manner.” (Venkataraman & Pinto, 2008, p. 32). This combines all aspects of the initial stages of project development and planning into one workable document. This becomes a base for the project manager to keep an eye on how the project is progressing as well as to relate the costs of the project at the different stages. The WBS is going to initially start with the overall project, broken down into deliverables and then into the separate work packages that relate to those deliverables. The three main types of WBS’s are product based WBS, organizational based WBS, and process based WBS. In my organization we are an aerospace part manufacturing plant and we produce a product that goes through numerous processes
References: Arpan, C. (2013). Evm benefits and myths. Unpublished raw data, Ashford University, Retrieved from http://classroom.ashford.edu Venkataraman, R., & Pinto, J. (2008). Cost and value management in projects. Hoboken, New Jersey: John Wiley & Sons, Inc. Retrieved from http://online.vitalsource.com/ Visitacion, M. (Sep 2007). Debunking commonly held evm myths. Contract Management, 47(9), 51-52. Retrieved from http://search.proquest.com.proxy-library.ashford.edu/docview/196310591/13C0C531657250297/1?accountid=32521 Wallace, S. (1999-2007). Scope & change control. Retrieved from www.epmbook.com/scope.htm