Ch.7 Discusion

Ch. 7 Discussion Questions (1,4,6,7)

1. Cost management within an information technology project is probably one of the most difficult tasks an organization will encounter. Estimating the various costs that go into an IT project is extremely difficult to do from the start. This is an important factor to consider when analyzing the success of cost management practices on a particular project, because final costs are measured against the initial estimates. Unfortunately, it is likely that this estimation/budgeting difficulty is what causes many IT professionals to (as the book used) “smirk” at the idea of project cost management and/or cost overruns. In other words: effective IT project cost management is pretty much impossible, so why bother.

4. Cost budgeting involves allocating the project cost estimate to individual work items over time. The WBS is a required input to the cost budgeting process since it defines the work items. An important goal is to produce a cost baseline. A time-phased budget that project managers use to measure and monitor cost performance. Estimating costs for each major project activity over time provides management with a foundation for project cost control. Cost budgeting also provides info for project funding requirements –at what point(s) in time will the money be needed

6. Project Portfolio Management, also known as PPM, is a system allowing enterprises to collect and view information about the various stages of their projects. There are 5 levels to PPM:

1. Put all projects in one database

2. Prioritize the projects in your database

3.Divide the projects into 2 or 3 budgets based on type of investment, such as utilities or required systems to keep things running, incremental upgrades, and strategic investments.

4. Automate the repository

5. Apply modern portfolio theory, including risk-return tools that map project risk on a curve.

7. Spreadsheets are a common tool for resource planning, cost estimating, cost...