Cost and Quality Plan for Galaxy Industries PMO Project
Cost Estimating
The cost estimating process first consists of the WBS breakdown. The project is broken down
into its WBS which identifies all major deliverables and tasks. Then there are the cost categories
which define the associated costs for each WBS element.
1. The PMO setups cost estimate is $50,000 which includes office space, furniture and
equipment. This also includes the cost of setting up office space, buying necessary
furniture, and equipment
2. The Project Management Software’s cost estimate is $30,000 which includes software
licensing and implementation.
3. The training and PMP certification are estimated to be $20,000. This includes the cost of
training employees to achieve PMP certification. Includes instructor fees and study
materials.
4. The software deployment is estimated to cost $15,000, which includes software
integration and tech support.
5. The miscellaneous and contingency has a budget of $10,000. This is for unforeseen costs
or risks
The total estimated cost is 125,000.
The cost baseline will be used to monitor the financial progress of the project.
Cost Budgeting
The PMO setups planned budget is $50,000 with a cumulative budget of $50,000. The project
management software has a planned budget of $30,000 with a cumulative budget of $80,000.
The training and PMP certification have a planned budget of $20,000 with a cumulative budget
of $100,000. The software deployment has a planned budget of $15,000 with a cumulative
budget of $115,000. The miscellaneous/contingency has a planned budget of $10,000 with a
cumulative budget of $125,000.
Cost Controlling
Any changes to the project scope or costs must be documented through change requests. These
changes will be looked at for impact on the budget. Any adjustments to the cost baseline will be
formally approved by the project sponsor. Track CPI to assess whether the project is staying
withing the budget. Use cost variance to measure the difference between earned value and the
actual cost.
For monitoring and reporting, it’s important to hold monthly meetings with key stakeholders to
review the financial status of the project and discuss any discrepancies between actual spending
and planned costs. Also, use EVM to track cost performance and make adjustments as needed to
keep the project on track.
If a cost overrun is identified, analyze alternatives to mitigate the financial impact. Make sure to
also assess trade-offs between cost and quality. The $10,000 contingency reserve will be used
only for unforeseen issues or risks. If this reserve is used in any way, it must be documented and
justified. If the reserve is exhausted, a formal change request is to be submitted for additional
funding.
1. Cost Management Plan
The objective is to define how the project’s costs will be planned, estimated, budgeted and
controlled. This ensures that the PMO project is completed within the budget, and it meets the
financial goals.
Cost Estimation:
Direct Costs—
-PMO setup and installation (equipment, installation, furniture etc)
-Licensing fees for project management software
-Training costs for the PMP certification
-Salaries for the internal employees and external partners
Indirect Costs—
-Accounts for indirect costs which include administrative overhead and any unanticipated
expenditures.
Cost Budgeting:
Cost Breakdown Structure (CBS)—Based on the WBS, breakdown the costs by
deliverables and tasks. Each element will have a budget allocation.
Contingency Reserve—Set aside a portion of the budget for unexpected expenses like
changes in the scope or unexpected delays.
Cost Control:
Earned Value Management—Use EVM metrics to keep an eye on the projects cost
performance. Key metrics: Planned Value, Earned Value, Actual Cost, Cost Performance
Index (to measure efficiency)
Regular Budget Reviews – Conduct monthly reviews of the budget by having meetings
with the stakeholders to track spending against the baseline budget.
Cost Change Control—If deviations from the planned budget are to happen, establish a
process for approving and documenting changes to the budget.
2. Quality Management Plan
This ensures that the PMO project will deliver high quality results by outlining the approach for
quality planning, assurance and control.
Quality Planning:
The functionality of the PMO setup (fully operational PMO, fully trained staff, and PMP-
certified project managers).
The successful deployment of the project management software and intranet site.
On-time and within-budget completion of project milestones
Quality Metrics:
PMO Setup Quality: Completion of PMO facilities, equipment, and technology
installations.
Project Manager Certification: Number of project managers successfully completing
PMP certification.
Software Deployment: Timely and functional deployment of the project management
system.
Stakeholder Satisfaction: Feedback from internal and external stakeholders.
Quality Assurance:
Process Audits: Regular audits will be conducted at key stages (PMO setup, software
deployment, training completion) to make sure quality processes are followed.
Training Programs: Make sure all staff are well trained on using the project management
software and following standardized project management practices.
Continuous Improvement: Implement a feedback loop with stakeholders to gather input
throughout the project and adjust plans or processes as needed.
Quality Control:
Test Plans: Implement testing protocols for the project management software and intranet
system.
Quality Reviews: Monthly review meetings to look over quality performance.
Corrective Actions: If there are any quality issues, create an action plan for addressing
them, which could include modifying project plans, adjusting processes, or reallocating
resources.
3. Integration of Cost and Quality Management
Make sure a seamless integration of cost control and quality assurance efforts, which allows
project’s quality standards to be met without exceeding the budget.
Cost vs. Quality Trade-off: The higher the quality, it may require more resources or
time.
Budgeting for Quality: Allocate portions of the budget specifically for quality-related
activities:
Software testing
Employee training
Risk mitigation for quality-related issues
Cost Performance and Quality Performance Evaluation: Establish mechanisms for regularly
evaluating both cost performance and quality performance, comparing actual results against
planned objectives. Both should align to meet the project’s goals.
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