Funding Limit Reconciliation

Some times in the project the sponsor might have already decided about what is the overall budget of the project. As a project manager once you determine the budget and when you compare planned budget with the budget decided or allocated, if it exceeds the allocated, then you need to re-plan may be by re-considering the scope or increase the allocated budget itself in approval with sponsor. This is called Funding Limit Reconciliation. In simple sentence it is nothing but reconciling or reworking the budget based on the limitation of the funding availability.

Funding Limit Reconciliation technique is used under the process Determine Budget.

Historical Relationship

While estimating or predicting the budget of the project one can refer the historical data and the other mathematical model which is covered through analogous and parametric estimation techniques. By calculating using these techniques the accuracy and the cost will vary and reliable on the historical information used to develop accuracy, parameters used for the quantification, scalability, complexity of the projects etc..

For example the cost for a particular resource with particular skills set is so much of dollar. Or per square feet with specific material will cost $X, etc… These parameters can be used to develop or predict the project budget.

Historical Relationship technique is used under the process Determine Budget.

Cost Aggregation

Cost Aggregation technique is used to sum of all the costs to be incurred for the entire project as part of the panning. Activities costs aggregated to work package cost. Work packages costs are aggregated to control account cost. Control accounts costs aggregated to project cost. It is similar to bottom up estimating.

Cost Aggregation technique is used under the process Determine Budget.

Vendor Bid Analysis

Vendor Bid Analysis technique is used to analyze the bidding prices received from qualified or potential sellers which in turn will be helpful for estimating the cost at the activity level and the overall budget of the project.

Vendor Bid Analysis is used under the process Estimate Costs process.

Cost of quality

Cost of quality includes the project and the product life cycle cost which are attributed because of the quality. There are two parameters under Cost of Quality. One is Cost of Conformance and second is Cost of non-conformance. Cost of conformance is to prevent the defects and cost of non- conformance is because of the defects. Cost of non-conformance is also called as cost of poor quality.

Examples for cost of conformance are training, testing, documentation, reviews, etc.. which help in preventing the defects.

Examples for cost of non-conformance are rework, wastages or scrapping of materials, warranty cost, business loss.

Cost of Quality technique is used under the processes Estimate Costs and Plan Quality Management.

Project Management Software

The tool helps in tracking the progress of the project with respect to schedule, effort and cost. The actual measurement is compared with the baselines like schedule and cost baselines. From this,variation and forecasting can be found out. This will help in recommending corrective and preventive actions.

Project Management Software tool is used under the processes Estimate Activity Resources, Estimate Costs, Control Schedule and Control Costs processes.

Performance Reviews

When the project is progressing we need to measure, compare and take or recommending necessary actions like corrective and preventive actions if the progress is not as per the expectation. Performance reviews technique helps in carrying out this activity. The outcome can be Schedule and cost variance, remaining duration left out, etc…

Performance Reviews can be carried out using Trend analysis, Critical path method, Critical chain method and Earned value management.

Performance Reviews used under the processes Control Schedule and Control Costs.