Cost and Value Management in Projects provides practicing managers with a thorough understanding of the various dimensions of cost and value in projects, along with the factors that impact them, and the managerial approaches that would be most effective for achieving cost efficiency and value optimization. This book addresses cost from a strategic perspective, offering thorough coverage of the various elements of value management such as value planning, value engineering and value analysis from the perspective of projects.
Autorentext
Ray R. Venkataraman, PhD, is Associate Professor of Management at the Sam and Irene Black School of Business, Penn State Erie. He previously taught at DePaul University and Northern Illinois University, where he received the Ideal Industries Award for Excellence in Business Teaching. His scholarly articles have appeared in several top-tier journals.
Jeffrey K. Pinto is Andrew Morrow and Elizabeth Lee Black Chair in Management of Technology in the Black School of Business, Penn State Erie. Professor Pinto is the coauthor, with Peter Morris, of The Wiley Guides to the Management of Projects series, as well as the author or editor of twenty other books and more than 100 scientific papers.
Klappentext
Business and Economics/Project Management
A British parliamentary committee criticizes the spiraling costs of the 2012 London Olympics.
Infrastructure costs had risen by $1.8 billion over the figure quoted.
The U.S. Navy orders Lockheed to stop work on the new coastal-waters warship because of big cost overruns.
In a study of 300 large companies, consulting firm Peat Marwick finds that 65 percent of hardware and/or software development projects were significantly behind schedule, over budget, or failed to deliver value in terms of expected performance.
In a report on the current state of IT project implementation, the Standish Group predicts that out of a total of 300,000 projects that cost over $350 billion, approximately 43 percent will overshoot their initial cost estimates, while 63 percent will fall behind schedule and perform at only two-thirds of their expected capability.
Why do these problems persist? One key answer is the lack of an integrated cost and value management framework.
Cost and Value Management in Projects provides practicing managers with a thorough understanding of the various dimensions of cost and value in projects, along with the factors that impact them, and the managerial approaches that would be most effective for achieving cost efficiency and value optimization. Addressing cost from a strategic—rather than just a tactical—perspective, this book:
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Covers the various elements of value management from a project perspective, including planning, engineering, and analysis
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Examines project management decision areas that have the potential to enhance value, along with relevant managerial approaches that can be used to optimize that value
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Outlines an integrated framework for managing cost and value that can be useful to practicing project managers
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Provides prescriptive advice on how to avoid common pitfalls in managing cost and value in projects
Projects have become one of the key means by which organizations add to their
bottom lines. Mastering the project-based skills, including cost and value management, contained in this book will confer an important advantage on every organization in the relentless competition for profits, market share, and technical innovations.
Inhalt
1 Introduction to the Challenge of Cost and Value Management in Projects 1
1.1 Importance of Cost and Value Management in Projects 2
1.2 Keys to Effective Project Cost Management 6
1.3 Essential Features of Project Value Management 8
1.4 Organization of the Book 9
References 14
2 Project Needs Assessment, Concept Development, and Planning 17
2.1 Needs Identification 19
2.2 Conceptual Development 22
2.3 The Statement of Work 23
2.4 Project Planning 27
2.5 Project Scope Definition 28
2.5.1 Purpose of the Scope Definition Document 29
2.5.2 Elements of the Scope Definition Document 29
2.5.3 Project Scope Changes 30
2.6 Work Breakdown Structure 32
2.6.1 Types of Work Breakdown Structures 34
2.6.2 Work Breakdown Structure Development 35
2.6.3 Coding of Work Breakdown Structures 38
2.6.4 Integrating the WBS and the Organization 38
2.6.5 Guidelines for Developing a Work Breakdown
Structure 42
References 42
3 Cost Estimation 43
3.1 Importance of Cost Estimation 44
3.2 Problems of Cost Estimation 45
3.3 Sources and Categories of Project Costs 49
3.4 Cost Estimating Methods 51
3.5 Cost Estimation Process 56
3.5.1 Creating the Detailed Estimate 56
3.6 Allowances for Contingencies in Cost Estimation 59
3.7 The Use of Learning Curves in Cost Estimation 61
References 64
Appendix 67
4 Project Budgeting 83
4.1 Issues in Project Budgeting 83
4.2 Developing a Project Budget 85
4.2.1 Issues in Creating a Project Budget 85
4.3 Approaches to Developing a Project Budget 85
4.3.1 Top-down Budgeting 86
Top-down Budgeting: Advantages 86
Top-down Budgeting: Disadvantages 87
4.3.2 Bottom-up Budgeting 88
Bottom-up Budgeting: Advantages 89
Bottom-up Budgeting: Disadvantages 90
4.4 Activity-based Costing 90
4.4.1 Steps in Activity-based Costing 90
4.4.2 Cost Drivers in Activity-based Costing 91
4.4.3 Sample Project Budget 1 91
4.4.4 Sample Project Budget 2 92
4.5 Program Budgeting 93
4.5.1 Time-phased Budgets 93
4.5.2 Tracking Chart 94
4.6 Developing a Project Contingency Budget 95
4.6.1 Allocation of Contingency Funds 95
4.6.2 Drawbacks of Contingency Funding 96
4.6.3 Advantages of Contingency Funding 97
4.7 Issues in Budget Development 98
4.8 Crashing the Project: Budget Effects 99
Crashing Project ActivitiesDecision Making 100
References 104
5 Project Cost Control 105
5.1 Overview of the Project Evaluation and Control System 105
5.1.1 Project Control Process 106
5.2 Integrating Cost and Time in Monitoring Project Performance: The S-Curve 107
5.3 Earned Value Management 111
5.4 Earned Value Management Model 112
5.5 Fundamentals of Earned Value 114
5.6 EVM Terminology 114
5.7 Relevancy of Earned Value Management 115
5.8 Conducting an Earned Value Analysis 117
5.9 Performing an Earned Value Assessment 119
5.10 Managing a Portfolio of Projects with Earned Value Management 122
5.11 Important Issues in the Effective Use of Earned Value Management 123
References 126
6 Cash Flow Management 127
6.1 The Concept of Cash Flow 127
6.2 Cash Flow and the Worth of Projects 131
6.2.1 The Time Value of Money, and Techniques for Determining It 132
6.2.2 Applying Discounting to Project Cash Flow 134
6.3 Payment Arrangements 137
6.3.1 Cost-reimbursable Arrangements 138
6.3.2 Payment Plans 140
6.3.3 Claims and Variations 142
6.3.4 Cost Variation Due to Inflation and ...