Project Management 803
Project Planning II: Cost Estimating and Cost Budgeting

Course Introduction

Imagine the following situation. You're in the implementation phase of a project. As you look at the budget outlays, you see that expenditures are within budget for the time period. Because the budget has not been tied to achievement, however, you have ignored the fact that funds have been spent far in advance of accomplishment. You continue in this way until someone from accounting puts through an emergency call to say you're already way over budget—and you are in only the second of four phases of implementation! You hang up the phone in a cold sweat, wondering how you'll explain this in the meeting you have today with the senior management stakeholders, when . . . you wake up!

And you are oh so glad that you now know what you need to do, while you're still in the planning phase. You were just having a nightmare!

In this course,we will focus on how budgeting is conducted at your place of work. With a solid grounding in the basic principles of cost estimating and budgeting, you should be able to avoid budgeting nightmares like the one you just read.

Course Objectives

By the end of this course, you will be able to

• describe inputs to cost estimating and how they are used;
• use a work breakdown structure (the WBS) to estimate project costs;
• use top-down, parametric, and bottom-up beginning line techniques for cost estimating;
• develop a baseline budget for project, using cost estimates you create; and
• give and receive constructive feedback with the other members of your team.

Course Overview

This course—Project Management 803: Cost Estimating and Cost Budgeting—is composed of two lessons, and is designed to be completed in four weeks. You will submit an assignment and prepare answers to discussion questions once every two weeks.

Completing This Course

To complete this course, you must do the following:

• Read the assigned sections of the textbooks.
• Complete all written assignments.
• Participate in specified team activities.

About the Lessons

Each lesson in these online course materials provides a reading assignment, a list of objectives, key terms, a practice exercise, discussion questions, and an assignment. The material included in the lessons is designed to help you use new skills as you learn them. You'll find examples from various industries, and interactive exercises and assignments ask you to relate course concepts to your own work situation. These online course materials will also coordinate your reading and writing assignments, help you prepare your answers to the discussion questions, and remind you about Team Project Notebook deliverables.

Key Terms

Each lesson includes key terms important to the concepts you will learn in the lesson. Although you will not be quizzed on key terms, you should try to incorporate them into your work wherever appropriate. You will find the terms discussed in either the lesson commentary, the assigned readings, or both. There are also glossaries in the back of Lewis and the PMBOK that you may find helpful.

At the beginning of each lesson, you will also see a list of abbreviations used in the lesson. Use this list as a reference tool, because many terms used in project management are commonly abbreviated.

Practice Exercises

Practice Exercises allow you to apply the concepts presented in each lesson. These are for practice only and do not need to be submitted. The answers are provided so you can check your work.

Discussion Questions

An important part of this course, and the certificate program as a whole, is the discussion questions.

Each lesson contains either an exercise or an installment of an ongoing case-study situation to which you will apply your developing project management skills. As part of each assignment, you will be required to prepare responses to the problems posed. Satisfactory completion—measured by one substantive response to each discussion question—will result in a satisfactory participation grade for this segment of the course work.

About the Assignments

Each of the two lessons in this course requires preparing answers to discussion questions and an individual assignment for evaluation.

Note: You are expected to complete the Team Project Notebook deliverables outside of the lesson assignments. While each assignment provides a reminder about Team Project Notebook deliverables, how you manage this work is up to each team (see "Team Project Notebook Deliverables"). The following is a preview of the assignments for this course:

Assignment 1

You will prepare answers to two questions on budgeting and cost estimating. On your own, you will perform two reviews of a model cost estimate, and then write a complete cost estimate report based on the model cost estimate.

Assignment 2

You will answer three questions on budget negotiations. On your own, you will also create three cost estimates (each sorted in a different order) for preparing 1,000 sandwiches for an athletic event, and you will prepare a work schedule for this project.

Working in a Team

This course, like all the courses in this certificate program, requires that you work as part of a team to complete portions of the assignments. (See "About the Assignments" in this introduction for an overview of each assignment.) This means communicating with fellow team members in a variety of ways: through e-mail, phone calls, and perhaps meetings. Take advantage of the variety of available communication options, both to accommodate individual team members' needs and to enhance teamwork by choosing the most appropriate method for the task at hand.

Team Project Notebook Deliverables

Throughout the course, your team will be responsible for putting deliverables in the Team Project Notebook (each team should select one member to put items in the notebook). It is your team's responsibility to put these deliverables in the notebook before the end of the program. You will most likely want to do so after you receive your instructor's feedback on related assignments and can integrate any changes into the notebook deliverables. At the end of the program, the program mentor will review your Team Project Notebook.

Your course instructor or the mentor can provide additional guidance in creating your Team Project Notebook deliverables; you may submit deliverables for review via e-mail at any time during the course for that instructor, or at any time during the progam.to the mentor. Both will return your deliverable with comments in time for you to revise your deliverable before the end of the program.

Note: Team Project Notebook deliverables do not always correspond to the assignments; each team must work out the what, how, and when for managing these deliverables. While reminders are placed throughout the course, Team Project Notebook deliverables are due by the last day of the course.

Evaluation and Grading

Because this is a noncredit professional certification program, all submitted assignments are graded satisfactory (S) or non-satisfactory (NS). Other exercises will count toward the participation grade, as noted in individual lessons.

Study Tips

Many students find the concepts in this course to be challenging. The following tips may help you devise a successful study strategy for completing this lesson.

• Each lesson is designed to be completed in two weeks. Plan ahead to give yourself extra time to complete the readings and assignments. If you work full time during the week, you should try to budget extra weekend study time while completing this course. It will be difficult to catch up if you fall behind.
• Practice the concepts and techniques with simple projects (for example, household or garden projects); if you plan to try using project management software in this course, practice entering the data for these projects into your software program.
• Work with your teammates—try resolving your questions and practicing concepts together.
• Use the lists of learning objectives and key terms at the beginning of each lesson in these online course materials to direct your study.
• Use the objectives listed at the beginning of chapters in EPM, and the questions and review points at the end of chapters in Lewis as guides to your study.
• Take advantage of your instructor's expertise!

Using Project Management Software

You may find you will often be using project management software in your job, especially during the planning and controlling/monitoring phases. Project management software is not required for this program, though you may use it in this course if you wish. You should fully understand the concepts being taught in the lesson, however, rather than hope the software will make these concepts clear to you. It is easy to produce erroneous data with this type of software when you don't understand the basic principles underlying the functions you are trying to carry out.

If you think you will want to use your project management software in this course, take time now to become familiar with it. Try budgeting simple projects, and allow time to experiment a little before you are under pressure to turn in an assignment. This is not a course in learning to use management software, and we will not be able to devote time to answering questions about how different software packages function.

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