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Chapter 7 - Scheduling and Budgeting

Chapter 7 of 'Strategic Project Management' focuses on project scheduling and budgeting, emphasizing the importance of Work Breakdown Structures (WBS) for organizing tasks and estimating costs. It outlines key scheduling terms, estimation methods (top-down and bottom-up), and the role of Gantt charts in managing project timelines. The chapter also discusses budget management, including types of costs and the steps for creating and monitoring a project budget.

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Jannine Pineda
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14 views

Chapter 7 - Scheduling and Budgeting

Chapter 7 of 'Strategic Project Management' focuses on project scheduling and budgeting, emphasizing the importance of Work Breakdown Structures (WBS) for organizing tasks and estimating costs. It outlines key scheduling terms, estimation methods (top-down and bottom-up), and the role of Gantt charts in managing project timelines. The chapter also discusses budget management, including types of costs and the steps for creating and monitoring a project budget.

Uploaded by

Jannine Pineda
Copyright
© © All Rights Reserved
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
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Strategic Project Management: Theory and Practice for

HR Professionals

Chapter 7 - Project Scheduling and Budgets

Unless otherwise noted, this work is licensed under a Creative Commons Attribution-NonCommercial-ShareAlike
4.0 International (CC BY-NC-SA 4.0) license. Feel free to use, modify, reuse or redistribute any portion of this
presentation.
Learning Objectives
1. Define terms related to scheduling.
2. Be able to calculate parametric estimates.
3. Understand how cost and time are summarized in a WBS.
4. Understand the process of decomposition is used to create a WBS.
5. Understand the difference between a deliverable and work package.
6. Understand the WBS numbering system.
7. Understand top-down estimation methods.
8. Understand bottom-up estimation methods.
9. Be able to calculate learning curves and apply them.
10. Discuss issues related to moving from the planning phase of a project to the scheduling phase.
Scheduling Terms
● Milestone: A significant event, completion of a deliverable (with
dates)
● Activity: an element of work performed (task)
● Duration: time to complete a task (activity)
● Resource: people, materials, equipment (primary ones)
● Cost: an expense
● Time-Constrained: an imposed time frame ie. wedding
● Resource-Constrained: resources may not be available and project
is delayed ie. Employee is sick and cannot finish the flooring on time
Activities and Work Breakdown Structures

The activity definition process is a further breakdown of the work


package elements of the work breakdown structures (WBS).
● It documents the specific activities needed to fulfill the deliverables
detailed in the Work Breakdown Structure (WBS).

● These activities are not the deliverables themselves but the individual
units of work that must be completed to fulfill the deliverables.
Benefits of Work Breakdown Structure
1. A visual of the project
2. An overview for everyone about progress
3. Breaks work into manageable chunks
4. Best for allocating time and costs
5. Identify risks of missing out on something
6. Eliminates confusion
7. Identifies skills needed to finish tasks/activities
8. Boosts transparency
9. Each work package is a measurable unit providing exact status
reports
Work Breakdown Structures
WBS –
continued
Simplified Work Breakdown Structure
Deliverables vs. Work Packages
● Deliverables and sub-deliverables are things such as physical objects,
software code, or events. In a WBS, deliverables and sub-deliverables
are represented by NOUNS

● Work packages are assignable units of work that will be performed to


create the related deliverable. Work packages are action oriented and
will be represented by phrases containing VERBS

● Gives everyone the information they need to stay informed


Quick Example-WBS information and coding

Scope: Paint (what) my bedroom (where) on Saturday, March 10,


2022 (when) with my friend and myself (who), at a cost of $100.00.
(cost)
Deliverable: Purchase paint 1.0
Sub-deliverable: 1. Choose paint 1.1
Work Package: Lowest level of the WBS
Activity 1. Research paint colours 1.2
Activity 2. Visit paint store 1.3
Activity 3. Get ideas from paint representative 1.4
Activity 4. Compare prices of paint 1.5
Numbering (Coding) and
Decomposition
● Project managers use the WBS during project execution to track
the status of deliverables and work packages.
● The items in a WBS are numbered so it is easy to understand
the deliverable, or sub-deliverable, to which any particular work
package is related.
● Decomposition is the process used to break the project scope of
work into the deliverables, sub-deliverables, and work
packages involved in completing the project.
Time Estimation
1. Estimates have a huge influence on a project and are a large source
of project risk.
2. Helps with good decisions about approval
3. Helps schedule the work
4. Determines how long the project with take to complete
5. Decide if it is worth doing the project
6. Helps to decide how much money is needed for project
7. Helps stakeholders know how well the project is moving forward
Top Down Estimations
Top-down, or macro, estimation methods
are used usually by top officials with little
knowledge of details of the project, to
determine:
1. if a project is feasible
2. calculate funding requirements, and to
3. determine the resources needed to
complete a project
Benefits of Top Down Estimations
● These basic guidelines should be followed when generating top down
estimates: (small projects generally)

1. When the project affects the strategic objective of the organization


2. The project has uncertain success
3. Small project and does not affect the whole organization
Bottom Up Estimations
Bottom-up, or micro, estimation
methods used by people directly involved
in the project are used to provide

● A detailed, and more accurate,


estimate and are usually derived
from the detailed list of work
packages or activities found in the
work-breakdown structure.
Bottom Up Benefits

These basic guidelines should be followed when generating bottom


up estimates: (large projects generally)

1. Have people familiar with the work make the estimate. (several people if possible)
2. Estimates should be based on normal conditions and a normal level of resources.
3. Estimates should not make allowances for contingencies. Has a fixed cost
4. The customer wants to be involved (details)
5. Costs and timing are critical to success
Human Resources Assistance with Scheduling

● Support with organizing the scheduling and estimating


● Ensure hiring of the “right people” with the expertise required for
scheduling
● Collaborate or support coordination of several strategic projects
concurrently running over the course of a budget year
Managing the Schedule
The Gantt Chart
A Gantt chart is a
type of bar chart,
developed by Henry
Gantt, that illustrates
a project schedule.
Benefits of a Gantt Chart
1. A visual image of the schedule
2. Easy to design
3. Easy to read
4. Excellent planning tool
5. Track relationships between tasks and keep everyone on track
6. Simple to manage the team and their tasks
7. Help organize the project
Estimating Costs: Types of Costs
● Direct Costs: an expense traced directly to the project
(product/service) ie. Trainer’s wages
● Indirect Costs: an expense not directly related to the project,
yet costs of the project ie. Purchase of audio/visual equipment
● Direct Project Overhead Costs: an expense tied to specific
resources in the organization that are used in the project ie.
Photocopier
● General/Administrative Overhead Costs: indirect costs of
running a business that supports the project ie. IT support
Understanding Budgets
Budget: the approved amount of money that will be spent on the
project
Project Budget: is a combination of all the activities’ milestones and
tasks in the project

Simple Budget Steps:


1. Break project into small tasks and milestones
2. Estimate each task and milestone
3. Add the estimates all together
4. Add in any contingencies/taxes/other costs
5. Seek Approval
Managing Budgets
● Project Manager manages the budget once approved
● Project Manager is responsible to monitor financial performance of the
project and make financial decisions
● The budget is evaluated regularly as to whether the project is ahead,
behind or on track with spending
● Reports are completed on “actual spending” within a certain period of
time (monthly, quarterly, yearly)
● When a budget is overspent, the Project Manager needs to take
corrective action
● Contingency Funds are completed (sometimes) to set aside
unanticipated costs.
Key Takeaways
1. The creation of a WBS is one of the first steps in organizing and
scheduling the work for a project.
2. Activity definition uses everything we already know about the project
to divide the work into activities that can be estimated.
3. Estimates have a huge influence on a project and are a large source
of project risk.
4. Budgets are the money approved for the project
5. Types of costs include direct, indirect, overhead and general
administrative costs

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