Project Management : A Common Problem Within The Stakeholder Theory Literature

Project A: This project is new to your company. You do not feel confident in estimating the project costs using internal resources. There are other companies that have done this type of work. Yet you still want the most accurate estimates possible.

(TCO B) Good project cost estimations are critical to a successful project. With that in mind, compare and contrast parametric estimating and vendor bid analysis as cost estimation techniques on a project. Please provide an example of each.

The stakeholders have also have also decided on a $200,000 budget. This is a realistic goal; however there are some risks involved in the process. One risk that may be incurred is that one or more personnel may leave the project for one reason or another. There shall be a “pool” of qualified contract project professionals, on stand-by, just in case this happens. Another risk that may possibly happen is the lack of resources. There will be a process put in place to contact appropriate personnel should resources, such as, equipment, monies, personnel, etc. run short.

‘’Cost performance on project s often poor, what are the possible causes of this and how can it be improved?’’

The budget for the initial and respecified project was reported to have been established after a reasonable period of time and considerable investigations. However, the planning on both occasions, were done by appointed experts in isolation, who did not consult with the two departments responsible for delivering the project and did not requested their inputs. The Australian National Audit Office (ANAO) reported, upon conclusion of the project, the reasons for the budget blow-outs. One reason clearly stood out, which was a lack of stakeholder involvement during planning and drafting the budget. As a result, the ANAO recommended that future projects should effectively integrate stakeholders,

(from Larson, E.E., and Gray, C.F., 2011 Project Management – the managerial process, fifth edition p441) Sitting in her office, Karin Chung is reviewing the past four months of the large corporate accounting software installation project she has been managing. Everything seemed so well planned before the project started. Each company division had a task force that provided input into the proposed installation along with potential problems. All the different divisions had been trained and briefed on exactly how their division would interface and use the forthcoming accounting software. All six contractors, which included one of the Big Five consulting companies, assisted in developing the work

Team structure, effective communication, risk, cost data and projections, performance metrics, and personnel resources are all pertinent mechanisms that have to be considered in order to track and successfully execute a project (CSU-Global, 2015). After a period of meticulous planning, project managers anticipate that their projects will be executed on schedule and within the proposed budget; nevertheless, according to Maheshwari and Credle (2010), there are internal and external factors that can impede a project’s progress. Therefore, once a project is in motion project managers often rely on tools to assist them with staying on course – and to mitigate project risk. One such tool is an Earned Value Analysis (EVA) report that can help quantify a project 's progress during the monitoring and controlling stages - at select time intervals. The EVA can also be used to forecast a project’s completion date and present an analysis of variances that may occur due to additional or misinterpreted requirements (Maheshwari et al., 2010).

Project management is to forecast and track costs to avoid cost overruns. Poor management leads to rising cost. Effective project management identifies such possible sources of cost overruns early and mitigates their effect. This paper explains the underlying causes of project cost overruns and provides some cost estimating methods used to avoid the overruns in the project.

One common concern that business leaders have is that the time, effort and money that is spent utilizing project accounting is not as valuable as one

ABI is using a top-down process in this project, meaning that determination of the final budget comes almost strictly from a compilation of experiences and judgments of the top and mid-level managers in the company. The higher-level managers break down costs into major categories, pass down their cost estimates to the next lowest level, lower-level managers break the major categories down into subcategories and so on until the estimation process reaches the lowest level of the company. By the end, each level knows the specific amount of money that it is allotted to complete the project tasks required at that level. Because the project is so extensive in price and risk, it would have been smarter for them use a bottom-up process which would have involved the employees who would actually be part of the work team so that management could get a more accurate estimate of the time and money that would be required to complete the project.

A project team can be made up of several roles that will be determined with project manager discretion as part of the project charter. The core team roles are:

Unlike conventional forms of financial management, cost management has a backbone effect in any kind of project management as not only does it ensures efficiency in terms of costs, but also efficiency in terms of time and output. The aim to incorporate cost management in organizational operations especially when planning outputs or evaluating viability of a project, cost management helps giving out result oriented indicators that help in decision making that can reduce the level of risk of misjudgement (Richman, 2002). That said, cost management is based on a lot of assumptions, presumptions and fluctuating factors that may implicate the indicators given out by existing cost schedules. This calls for cost schedules to be flexible and keep enough room to accommodate any instability or unforeseen changes and also calls for making certain assumptions so that variables that can fluctuate at a high rate can be stabilized when making calculations.

In the event there was poor estimating techniques used will cause risk management into the process to have to overcome unknowns. Some techniques to improve the poor estimating techniques is developing the process. According to Kerzner (2013), functional managers typically allocate the possibility additional required time or cost for cushion. The inflation of the allocated time or cost will time to ratify challenges. But in order to prevent poor estimating time in the future our organization can talk to additional industry leaders whom have undertaken a certain type of project. Talking to other industry leaders will allow direct feedback and possibilities to plan for to reduce poor estimating in future projects. In addition to other’s industrial leaders is to use dummy variables for project estimating techniques. By using dummy variables will provide ample lagged variables to essentially collect all required data (Pfeffer and Davis-Blake, 1986). For example using the variance analysis figures could allow some additional cost for materials.

NTCP Model is closely related to PMBOK principles of project management, it incorporates the basic belief and put forward a framework for addressing risk and uncertainties within project management domain. This model has been formulated by undertaking serious research involving multiple dimensions. Henceforth, the model presents a solid framework to understand basic project elements and map them accordingly to understand what type of methodologies and skill set will be required by the project manager to effectively manage the project meet its outcome objectives. Using the clear approach provided by NTCP model towards dealing with risk or uncertainty makes the model very effective. Furthermore, key element is that model can

There however are challenges in the industry occasioned by uncertainty on future spending on construction projects by the government. Moreover, the cost of doing business and the ability to increasingly make revenue have created a challenging environment for the construction firms. Therefore stakeholders in the construction industry are concerned with whether the government would increase its spending and whether the public construction projects will be available in the future since less than 10 percent are currently financing their clients.