Introduction
Note: Complete the assessments in this course in the order in which they are presented. Be sure you have completed Assessments 1 through 3 before beginning this assessment.
Threlfall (2014) states, The failure rate of projects with budgets over $1M is 50% higher than the failure rate of projects below 350k. According to Flyvbjerg and Budzier (2011), One out of six IT projects has an average cost overrun of 200% and a schedule overrun of 70%. Around 45% of companies admit that they are unclear about the business objectives of their IT projects.
This assessment will help you gain a deeper understanding of the cost estimating process, which involves developing an approximation of the cost of the resources needed to complete the project activities or tasks. There are different types of variations of cost such as when the project is performed under contract. This assessment will help you identify various costing alternatives. You will use the project management software tool Microsoft Project to organize your resources, including the resource rate and schedule.
References
Flyvbjerg, B., & Budzier, A. (2011). Why your IT project may be riskier than you think. Harvard Business Review, 89(9), 2325.
Threlfall, D. (2014). Seven shocking project management statistics and lessons we should learn. https://www.teamgantt.com/blog/seven-shocking-project-management-statistics-and-lessons-we-should-learn/
Preparation
The following resources are required to complete the assessment.
CAPELLA RESOURCES
Cost Budget Template [XLSX].
Project Management Plan Template [DOCX].
MICROSOFT SOFTWARE
Microsoft Project is required for completing this assessment. Microsoft Visio is optional.
If you have a Capella MS Imagine account, go to Step 2. Otherwise, see the instructions for registering an account at Microsoft Imagine Software Store.
Log into Capellas Microsoft Imagine Webstore.
Identify the versions of MS Visio and MS Project that are compatible with your operating system.
Download and install.
If you encounter any difficulties in the download and installation process, post a detailed question in the Ask Your Faculty Discussion in the menu dropdown when you click the image of your faculty.
Note: Complete the assessments in this course in the order in which they are presented.
As you prepare to complete this assessment, you may want to think about other related issues to deepen your understanding or broaden your viewpoint. You are encouraged to consider the questions below and discuss them with a fellow learner, a work associate, an interested friend, or a member of your professional community. Note that these questions are for your own development and exploration and do not need to be completed or submitted as part of your assessment.
You have developed the project schedule and are working on your cost estimate. Consider how you use the project schedule to help develop the cost estimate. Consider your own project for the following questions:
How will you reach the level of detail needed for a complete cost estimate?
What items should you include in your cost estimates that are not explicitly present in the project schedule?
Overview
Estimating project budgets is far from an exact science. Many of us have heard of projects running over budget. Why is this? Why do we consistently forecast low? There are many reasons for this inconsistency, including everything from improper funding at the beginning of the project to taking shortcuts that should never have been taken. Whatever the reason, there is a need for project managers and their teams to become better at forecasting technology costs.
For this assessment, you will complete the Cost Budget Template (linked in the Resources under the Required Resources heading), update your project schedule in Microsoft Project, and update the Cost Estimate / Schedule Update section of the Project Management Plan Template.
Instructions
Based on the information from Assessment 3, the Project Management Plan Template, and your WBS, provide a complete budget using the Cost Budget Template. Also update the project schedule in Microsoft Project.
For the budget estimate:
Identify the following:
The costs of each task.
The time frames within which the costs will be incurred.
Prepare a cost estimate for the project using the Cost Budget Template.
Prepare a budget for the project using the cost estimate.
Copy and paste the Summary Table (on Summary Tab) and Comments into the Budget Summary Information Cost Estimate /Schedule Update section of the Project Management Plan Template.
Enter your budget into Microsoft Project.
Use the Microsoft Project function to establish a baseline budget.
Copy the Microsoft Project file link into the MS Project Schedule Update Cost Estimate /Schedule Update section of the Project Management Plan Template.
Review the Cost Estimate / Schedule Update Scoring Guide to ensure you meet all evaluation criteria.
Note: Microsoft Project is provided free of charge for your use in this assessment. See the instructions in the Resources.
Additional Requiremen