Project management has revolutionized through the adoption of advanced techniques
of managing projects. The advancement seeks to reduce cost, enhance reception, and improve
value to the customer. Management of the cost and enhancement of value are the key
elements that determines project’ performance (Venkataraman & Pinto, 2008). The success
of the project depends on the efficient management of cost and creation and enhancement of
value in project management. The elements enable project managers to comprehend the
required budget expenditure and resources. Today, project management utilizes the cost
efficiency and value enhancement tools. The tools require well-structured management
process for efficient formulation and implementation of the project.in form of work
breakdown structure (Venkataraman & Pinto, 2008). Delivering value to clients entails the
formulating an effective work breakdown structure taking into account the cost and value
management of the project.
Importance of work packages in WBS use
Work breakdown structure is the hierarchy of multi-level framework that organize
elements and major phases of a project logically. The mechanism compiles schedule, cost,
and scope of the project capturing the vital information. It is used in identifying, tracking, and
reporting work progress throughout the project’s lifecycle. Developing a work breakdown
structure entails breaking of deliverables into smaller manageable workload including work
packages (Venkataraman & Pinto, 2008). Work packages is a unit within the work
breakdown structure constituting a collection of chunks of tasks. It details small deliverables
which the project manager is able to estimate the cost and schedule and easily controlled by
the team (Devi &Reddy, 2012). Therefore, work packages are important in project’s
lifecycle.
Schedule, Cost, and Value in Project Management 3
Work packages facilitate the creation of efficient work breakdown structure (WBS).
Work packages enable the project manager to provide the team with a simple description of
various work elements of the project (Devi &Reddy, 2012). By doing so, the team becomes
conversant with the workload avoiding confusion and overlapping which may interfere with
project’s schedule. Work packages help WBS technicians to list the details and guidelines
covering series of activities by utilizing elapsed time, dollar-value, and person- hours
classifications.
Work packages facilitate in costing the project by structuring through WBS.
Segregating the project into small manageable activities provide detailed information for
estimating the cost. For instance, in the kiosk project where I was a project manager; I had to
separate the 68 kiosks into various entities such as check-in processes, insurance capture, and
update demographics for ease in estimating the cost of operation. Separating the entities
facilitated the costing of the project up the WBS hierarchy when the need to repair the eight
kiosk arisen. Moreover, costing the work packages minimizes errors in the WBS as long as
the estimation procedure is effectively executed.
Cost and schedule performance measurement baseline.
Performance measurement baseline is the snapshot of the project used as a referral in
comparing the actual results from the plan. The baseline is used to measure deviation
between the original baseline plan and the actual project. The performance measurement
comprises of the schedule baseline, cost baseline, work break down structure, and project
scope.
Developing cost and schedule baseline entails following of procedure from project’s
conception stage to implementation. It involves defining and developing a WBS. The WBS
should define the scope of the project and highlight work packages that helps in budget and
Schedule, Cost, and Value in Project Management 4
schedule estimation. WBS should clearly define the resources required from the conception
to final stage. Establishing the baseline require development of activities and resources
schedule. This step is vital in determining the ratio budget allocated for each task over
specific period. The process creates a direct link between the budget and the schedule as well
as establishing the resources to use over the project cycle (Venkataraman & Pinto, 2008).
Developing time-phased budget facilitate in establishing cost and schedule baseline.
Compiling the information from the initial steps enables the establishment of expenditure for
the whole project’s life cycle. The cumulative value of the budget becomes the planned value
which highlights the budget for various stages within the project. Hence, in project
development the planned value helps in identifying expenditures for certain stage and period.
The final step of establish cost and schedule performance baseline is calculating the cost and
schedule variance. The variances aid in analyzing the project performance and progress. It is
acquired by examining the earned value(EV), planned value (PV), and the actual cost (AC).
Schedule variance is calculated by deducting PV from the EV whereas the cost value is
acquired by deducting AC from EV (Venkataraman & Pinto, 2008). Positive variance
indicate the project is beyond the schedule and below budget, zero indicate it is on schedule
and budget, and negative value means it is behind schedule and over budget.
EVM and how it helps the PM understand project status.
Earned Value Management (EVM) is a management tool used in planning,
management, and monitoring of projects. It defines the work accomplished and cost incurred
within specific period. It integrates cost, schedule, and value to draw inference on the project
status. EVM provides information on the accumulated value relative to the realized value,
forecasting on the estimated time and cost needed for the project completion (Lent, 2013) .
Therefore, it helps the project manager to establish and manage the earned value. For
example, if the repairing of the 4 kiosks had a deadline of 4 weeks before the end of the fiscal
Schedule, Cost, and Value in Project Management 5
year and the budget was twenty thousand dollars, and there were no obstacles at that stage,
this would record a positive earned value. The EVM help the project manager in establishing
the project status. The status can be determined by asking questions such as Are we on
budget? Does the actual work reflect the baseline plan? Do the cost and schedule as per the
baseline? What are our variances? The project manager can also evaluate the status by using
control charts including S- curves and Gantt charts. S-curve plots illustrate a visual trend of
the project enabling the project manager to determine the cumulative amount over time and
where the budget is likely to surge (Venkataraman & Pinto, 2008). It provides current status
of the project since the budget expenditure can constantly be revised and updated. Moreover,
EVM helps managers in formulating viable performance management baseline. EVM
provides information of cost and schedule that help in tracking performance which also help
in establishing the time cost analysis. For instance, in the repairing of the 8 kiosk, I speed up
the signing of the contract by working closely with the vendors which warranted the project
is on schedule and secured emergency funding. Additionally, EVM helps the managers in
estimating the time required to complete the project by calculating the Schedule performance
index (SPI). SPI is attained by planned and earned values. Also, the values are used in
projecting the final cost (Lent, 2013).
How PM uses project control charts to show project status and present value.
Statistical analysis plays a role in monitoring the Implementation of project within
schedule. Computational calculation is vital in setting parameters, updating project’s
progress, and monitoring its status. Project managers uses control charts including Shewhart
and S- curve charts to monitor the performance of the project (Mioara, 2016). Project
managers uses the control charts in identifying the higher and lower limit of the project which
may include the stage and time the budget might fluctuate. Hence, helps the manager in
keeping up with the schedule progress and taking measures when necessary. The S- curve
Schedule, Cost, and Value in Project Management 6
provide current and historical data that facilitate in performance monitoring. Project
managers uses Shewhart chart to determine the satisfactory and unacceptable deviations
which help them in rectifying deficiency hence keeping the project on the right path as well
as showcasing the present status (Mioara, 2016). Additionally, project managers utilize
statistical process control help managers identify performance variation. The manager is able
to classify variation in two ways including random causes variation which are inevitable and
assignable causes occurring as a result of human errors. The random causes are acceptable
while assignable are unacceptable. Classifying the two variation helps in computing the time
and financial losses dawn to occur therefore display the current project values.
Recommendation of an effective change
Change management is the mechanism used in the monitoring, planning, assessing,
and analyzing project. Advancement in technology and consumer expectations have
necessitated project management to reorganize and adopt new techniques to meet clients’
demands. Change management process is the steps undertaken to bring change from the
project’s inception to implementation (Pollack, 2017). Effective change management process
lead to success of the project. The change management process includes identifying the goals
and areas of improvement, creating a guideline framework, formulating a roadmap,
communicating the change, empowering and creating awareness of the change, monitoring
short term results, merging gains and generating more change, and monitoring and reviewing
implementation (Pollack, 2017). Creating guideline framework involves formulating a case
that compel others to understand the need for change. Formulating a roadmap would entail
collaboration with key people in the team to facilitate in pushing for the change. Creating
clear and relevant goals and vision helps people understand the change. Establishing open
line communication within the project will ensure effective implementation of the change.
Educating and creating awareness facilitate in collecting data regarding people’s concerns
Schedule, Cost, and Value in Project Management 7
and feedback on the change. Demonstrating short term results motivates and helps others
buy-in the change process. Continuous rectification and building on the change helps
establish a strong foundational change throughout the project cycle implementation (Pollack,
2017). Lastly, incorporating the change in the project procedure embed the change and
should be reviewed and monitored from time to time. The stages of the change management
process are likely to compel success in the project. Change management entails ascertaining
the necessity for change, planning, executing, and sustaining the change. However, to sustain
the change there is need to have the right tools and resources. Effective management tools
ensure successful execution of the project. Such tools include advanced cloud tools that
facilitate in monitoring change. Therefore, an effective change management implements the
process step by step to achieve success in the project.
In conclusion, the cost and value of the project are determined by various factors
including the work breaking down structure, cost and schedule baseline, and work packages.
The earned value management and control charts are vital tools in monitoring the status and
performance of the project. An effective project entails implementation of change
management process from conception to final stage of the project.
Schedule, Cost, and Value in Project Management 8
References
Cambridge Handbook of Organizational Project Management, Cambridge University Press,
Cambridge, ISBN: 978-1-107-15772-9, Ch. 16, pp. 236-249.
Devi, T and Reddy, V. (2012). Work Breakdown Structure of the Project. International
Journal of Engineering Research and Applications, 683-686.
Lent, B. (2013). Earned Value Management. Cybernetic Approach to Project Management,
111-142.
Mioara, B. (2016) Controlling Project Schedule Progress, Using Control Charts, Cybernetics
and Systems. An International Journal.
Pollack, J. (2017) Change management as an organizational project capability.
Venkataraman, R., & Pinto, J. (2008). Cost and value management in projects.
Schedule, Cost, and Value in Project