Cost and Value Management in Projects

Cost and Value Management in Projects
 
Project manager's guide to achieving cost efficiency and value optimization--thoroughly updated with new cases, examples, and problem sets
 
The newly revised and updated Second Edition of Cost and Value Management in Projects provides project 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 for achieving cost efficiency and value optimization. Whereas most cost management books discuss the topic from a tactical perspective, such as through the use of simple budgeting or Earned Value Analysis, this Second Edition addresses cost from a strategic perspective, examining project management decision areas that have the potential to enhance value and providing an integrated framework for managing cost.
 
The Second Edition includes updates to key topic areas such as project benefits realization, updated end-of-chapter exercises such as discussion questions and problem sets, updated case studies, and new spreadsheet analytic techniques and examples.
 
Written by two highly qualified authors with significant experience in the field, Cost and Value Management in Projects includes information on:
* Value management through value planning, engineering, and analysis from the perspective of projects, and best practices on how to avoid common pitfalls in managing cost and value
* Organization strategy and project selection, organization structure and culture, project definition (and contracts), and estimating project times and cost
* Developing project plans and schedules, managing risk, scheduling resources and cost, reducing project duration, leadership, performance measurement, and project closure
* Attainment of value in complex environmental settings and benefits of effective project management
 
Cost and Value Management in Projects is an essential resource on the subject for stakeholders at all corporate and government levels, including executives measuring performance, middle level corporate managers, project and team managers, engineers, project team members, and business consultants, along with students in related programs of study.

List of contents

About the Authors xiii
 
Introduction to the Second Edition xv
 
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 7
 
1.3 Essential Features of Project Value Management 9
 
1.4 Organization of the Book 11
 
Chapter Summary 20
 
References 21
 
2 Project Needs Assessment, Concept Development, and Planning 23
 
2.1 Needs Identification 25
 
2.2 Conceptual Development 29
 
2.3 Project Feasibility 32
 
2.3.1 Five Areas of Project Feasibility 32
 
2.3.2 Benefits of Conducting a Project Feasibility Study 33
 
2.4 The Statement of Work 34
 
2.5 Project Planning 37
 
2.6 Project Scope Definition 38
 
2.6.1 Purpose of the Scope Definition Document 38
 
2.6.2 Elements of the Scope Definition Document 39
 
2.6.3 Project Scope Changes 42
 
2.7 Work Breakdown Structure 43
 
2.7.1 Types of Work Breakdown Structures 44
 
2.7.2 Work Breakdown Structure Development 46
 
2.7.3 Coding of Work Breakdown Structures 49
 
2.7.4 Integrating the WBS and the Organization 49
 
2.7.5 Guidelines for Developing a Work Breakdown Structure 52
 
Chapter Summary 53
 
Discussion and Review Questions 53
 
References 53
 
3 Cost Estimation 55
 
3.1 Importance of Cost Estimation 58
 
3.2 Problems of Cost Estimation 60
 
3.3 Sources and Categories of Project Costs 64
 
3.4 Cost Estimating Methods 66
 
3.5 Cost Estimation Process 75
 
3.5.1 Creating the Detailed Estimate 76
 
3.6 Allowances for Contingencies in Cost Estimation 78
 
3.7 The Use of Learning Curves in Cost Estimation 81
 
Chapter Summary 85
 
Discussion and Review Questions 86
 
References 87
 
3A Appendix to Chapter 3: Forecasting Methods for Cost and Value Management 89
 
3A.1 Categories of Forecasting in Project Management 90
 
3A.2 Forecasting Methods for Projects 91
 
3A.3 Time Series Analysis 91
 
3A.4 Linear Regression Analysis 92
 
3A.4.1 Evaluating the "Fit" of the Regression Line 96
 
3A.4.2 Limitations in Forecasting Using Linear Regression 99
 
3A.4 Forecasting the Project End Conditions 102
 
3A.5 S- Curve Forecasting 102
 
3A.6 Technological Forecasting 109
 
Chapter Summary 110
 
Discussion and Review Questions 111
 
References 112
 
4 Project Budgeting 113
 
4.1 Issues in Project Budgeting 114
 
4.2 Developing a Project Budget 115
 
4.2.1 Work Breakdown Structure (WBS) 117
 
4.2.2 Issues in Creating a Project Budget 117
 
4.3 Approaches to Developing a Project Budget 118
 
4.3.1 Top- down Budgeting 118
 
4.3.2 Bottom- up Budgeting 120
 
4.3.3 Preparing the Project Budget 123
 
4.4 Activity- based Costing 124
 
4.4.1 Steps in Activity- based Costing 124
 
4.4.2 Cost Drivers in Activity- based Costing 124
 
4.4.3 Sample Project Budget 1 125
 
4.4.4 Sample Project Budget 2 125
 
4.5 Program Budgeting 126
 
4.5.1 Time- phased Budgets 127
 
4.5.2 Tracking Chart 127
 
4.6 Developing a Project Contingency Budget 128
 
4.6.1 Allocation of Contingency Funds 129
 
4.6.2 Drawbacks of Contingency Funding 130
 
4.6.3 Advantages of Contingency Funding 131
 
4.7 Issues in Budget Development 132
 
4.8 Crashing the Project: Budget Effects 13

About the author

Ray R. Venkataraman, PhD, is Professor and Chair of Project and Supply Chain Management in the Black School of Business at Penn State Erie.
Jeffrey K. Pinto, PhD, is the Andrew Morrow and Elizabeth Lee Black Chair in Management of Technology in the Black School of Business at Penn State Erie.
Together and individually, Dr. Venkataraman and Dr. Pinto are the authors of numerous publications in top-tier Operations Management and Project Management Journals, as well as authors or editors of some 30 books.

Summary

Cost and Value Management in Projects

Project manager's guide to achieving cost efficiency and value optimization--thoroughly updated with new cases, examples, and problem sets

The newly revised and updated Second Edition of Cost and Value Management in Projects provides project 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 for achieving cost efficiency and value optimization. Whereas most cost management books discuss the topic from a tactical perspective, such as through the use of simple budgeting or Earned Value Analysis, this Second Edition addresses cost from a strategic perspective, examining project management decision areas that have the potential to enhance value and providing an integrated framework for managing cost.

The Second Edition includes updates to key topic areas such as project benefits realization, updated end-of-chapter exercises such as discussion questions and problem sets, updated case studies, and new spreadsheet analytic techniques and examples.

Written by two highly qualified authors with significant experience in the field, Cost and Value Management in Projects includes information on:
* Value management through value planning, engineering, and analysis from the perspective of projects, and best practices on how to avoid common pitfalls in managing cost and value
* Organization strategy and project selection, organization structure and culture, project definition (and contracts), and estimating project times and cost
* Developing project plans and schedules, managing risk, scheduling resources and cost, reducing project duration, leadership, performance measurement, and project closure
* Attainment of value in complex environmental settings and benefits of effective project management

Cost and Value Management in Projects is an essential resource on the subject for stakeholders at all corporate and government levels, including executives measuring performance, middle level corporate managers, project and team managers, engineers, project team members, and business consultants, along with students in related programs of study.

Product details

• Authors: Jeffrey K Pinto, Jeffrey K. Pinto, Pinto Jeffrey K., Venkataraman, Ray R Venkataraman, Ray R. Venkataraman, Ray R. (Penn State University - Erie Venkataraman, RR Venkataraman, Venkataraman Ray R.
• Publisher: Wiley, John and Sons Ltd
• Languages: English
• Product format: Hardback
• Released: 21.05.2023
• EAN: 9781119933540
• ISBN: 978-1-119-93354-0
• No. of pages: 400
• Subjects: Natural sciences, medicine, IT, technology > Technology > Miscellaneous; Social sciences, law, business > Business > Management; Projektmanagement, Projekte, Industrial Engineering, Industrielle Verfahrenstechnik, Projektmanagement i. d. Industriellen Verfahrenstechnik, Industrial Engineering / Project Management