Project Cost Management

In recent years, with China's booming economy, the logistics industry, one of the top ten industries to revitalize, is even more prosperous. With the development of this industry, the management of logistics vehicles is imminent. In this case, in September 2010, a software company's senior management took the lead in developing a IOV system to seize the future information market of the logistics industry. The system provides vehicle management services for vehicles installed with GPS Terminals Based on google maps technology to improve the utilization rate and overall response speed of the fleet and reduce fuel consumption, provide scientific management decision-making basis for logistics enterprises and other users. This system allows you to query the geographical location of a fleet and the vehicle status (door switch) query, work status query, mileage statistics, vehicle and driver data management, data statistics and analysis, and other functions. I am a project manager in this project, responsible for project feasibility analysis, project planning, project management, and so on.

Project cost management is the cost incurred during project implementation on the premise that the system quality, construction period, and other contract requirements are met, it is a scientific management activity that achieves a predetermined cost goal through planning, control, and coordination, and minimizes the cost as much as possible. It mainly uses technology (such as the formulation and evaluation of technical solutions), economic (such as accounting) and management (such as project organization management, various rules and regulations) activities to achieve the intended goal, to achieve profitability.

The cost is the sum of various costs in the project implementation process. Cost management covers a wide range of content throughout the whole process and every aspect of project management activities, from the signing of the project's bidding to the project initiation, project planning, project R & D, project acceptance, etc, each stage is inseparable from the cost management work. For the complete process of cost management, the content generally includes cost estimation and cost control. The following briefly describes the cost estimation and Cost Control of the IOV project.

1. estimate costs and determine cost control objectives

Cost Estimation refers to the approximate estimation of the costs of various resources necessary to complete the activities at various stages of the project. Determine the cost control objectives based on the estimated project cost. The cost of IOV projects includes software/hardware cost, labor cost, and travel cost. Effective estimation of various costs is closely related to the formulation of detailed plans and work structure decomposition. The specific activities are as follows:

1.1 break down the job structure

In the project planning stage, I will split the work structure of the project task based on the project process definition selected in the earlier stage and the functional requirements of the project proposal, based on the loose schedule, I split the project into the following phases: project planning, demand analysis, system design, system coding, system testing, and acceptance. Secondly, based on the principle of splitting the minimum workload required to complete the task, I split the tasks in WBS in the most detailed way, make sure that the workload of each task is between 1-3 person-days (personal experience indicates that the finer the task splitting, the easier it will be to track later tasks ). Finally, the project's work structure is decomposed.

1.2 project workload Estimation

The premise of human cost estimation is to estimate the workload required to complete the project. In this project, I used the more popular PERT Method in the industry. I convened a total of three developers from our colleagues and the project team to participate in the estimation. Each person estimates the maximum (MAX), minimum (MIN), and most likely (ML) workload for the task module in the work breakdown structure ), the formula (MAX + MIN + ML * 4)/6 is used to obtain the task module's working value. Then, the estimated data of the three persons is added and the average is calculated, obtain the final work value of each task. In the estimation, if there is a big difference between three people, the estimation will be suspended until the end of the estimation is persuaded and the estimation results are consistent. The workload of the project task is estimated based on the above estimation.

1.3 estimate direct costs

After completing the estimation, follow the daily cost standards defined by the company for each person, that is, the Project Manager RMB 350 per person per day and the software engineer RMB 300 per person per day, RMB 250 per person per day for Quality Engineers, test engineers, and configuration engineers. The direct labor cost for this project is RMB 94000.

1.4 estimate total cost

After obtaining the direct cost of a project, calculate the indirect cost (including the risk fund) at 15% of the direct cost by referring to the indirect cost calculation parameters defined by the company ). Because the hardware in the project is provided by the company in advance, this part of the cost is not included in the project cost. The formula for calculating the total cost in the project is: direct cost + indirect cost + travel cost. The total cost of the project is calculated as follows: 94000 + (94000*0.15) + 5000 = 113100 RMB.

It is time-consuming to estimate the workload and cost of a project by multiple people, but it ensures the credibility of the estimation results.

2. control costs based on cost Objectives

Project cost control is to supervise, inspect and measure the resource input, implementation process and results during the project implementation process, and take measures to ensure the realization of the project cost objectives. The object of cost control is a software project, and its subject is a human management activity. The purpose is to rationally use human, material, and financial resources to reduce costs and increase benefits. Practice shows that the main content of cost control of information system integration projects lies in the cost of human resources. hardware costs such as servers and PCs are clear and transparent, and generally there is no large deviation. However, the control of human resource costs is largely related to the Plan's implementation on time and rework. Therefore, in the project, I mainly reduce the cost increase caused by planned delay and rework by doing well in Plan Management and task check.

In the daily cost tracking, I mainly use the MS PROJECT tool to form the PROJECT progress and cost benchmark plan through a reasonable budget during the PROJECT planning process, there is also a tracking plan for the benchmark plan. Obtain the workload information of the progress and completion progress using the daily report, Weekly Report, weekly meeting, and stage summary of the project team members, and input the actual progress data into the tracking plan. The PROJECT tool automatically performs statistical analysis to clearly display the information of the baseline scheduled task and the tracking scheduled task. By comparing, checking, and correcting various planned costs and actual costs, supervise the completion of tasks according to the schedule so that the actual cost of the project is controlled within the budget. In the project coding stage, a software engineer was not familiar with google Maps, resulting in a two-week delay in the task progress. Later, I had to reschedule it for two days for separate training. After the training, the incomplete tasks will be divided into other fast-growing software engineers, slowing down the delay of the project tasks as a whole, and working overtime later to make the project go to normal.

In addition, I pay attention to the change control and risk management of the project in daily project management. 1. Apply for, approve, implement and verify changes in accordance with the company's change management rules, accept necessary changes, reduce changes that do not affect system applications, and make the change management clear and formal. 2. Regularly identify and analyze project risks and take certain measures to control project risks. The above two tasks have a good effect on reducing the problem of increased workload and costs caused by chaotic changes and excessive risks.

After six months of hard work, the project finally passed the acceptance test and was officially launched for operation, which was well received by the company's leaders. The success of this project is largely due to my progress control, cost estimation, and cost tracking and control. However, there are still some problems in the project due to the delay of risk control and the increase of project costs. In the future project management, I will learn from my lessons and sum up my experience to do a good job in project management.