Executive Summary for Cost Management Plan

Introduction

In project management, a lot of information can be obtained from a Work Breakdown Structure (WBS). In this case, the focus will be on the project cost estimates. Therefore, the aim of this paper is to bring out the cost estimates for each task or project activity, and then the established cost estimates are added on the activities or work packages to come up with a cost baseline. This second item in the discussion is called budgeting while the first item is called cost estimating. Last, for cost management plan to be complete, the aspect of cost controlling will be highlighted in this paper. Cost controlling in this case refers to managing variances, controlling change, making decisions that involve alternatives and trade-offs to fulfill the budgetary objectives while ensuring that the project objectives are not affected (Martin, 2005).

Cost Estimates

From the WBS, the following are the cost estimates for each of the activities in the project. As far as the activity of ordering for office equipment and furniture is concerned, the resource needed is PMSupport2 and it costs $300. The activity of identifying the location at Galaxy for PM Office also needs the PMSupport2 resource that costs $600. The activity of cleaning out any existing fixtures or debris requires a cleanup crew at a cost of $800. Similarly, the activity of refurbishing space, considering such things as paint, walls, power and network also requires a cleanup crew at a cost of $2,000.

The activity of installing new furnishings and equipment requires a cleanup crew and a galaxy IT at a cost of $800 and $520 respectively. The activity of inspecting current “Legacy” policies and procedures requires a project manager at a cost of $2400.

The activity of testing methodologies with selected software also requires a project manager at a cost of $2400. Still the Comparison of performance with company requirements, Approval of New methodologies in place of "legacy" policies and procedures, discontinuation of Legacy policies and procedures and Institution of New PMP methodologies is done by the project manager at a cost of $2400.on the other hand, the activity of Software Requirements Decision is done by PMSupport1 at a cost of $6000. Software Requirements Approval is also aided by PMSupport1 at a cost of $3600. The purchase of Software requires such resources as PMSupport1, Sharepoint server License and SQL server license at the cost of $3600, $7000 and $3399 respectively. Obtain quote for infrastructure from at least three different vendors is done with the help of PMSupport2 at a cost of $2400.PMSupport2 also supports the Schedule a site survey for chosen vendor at a cost of $600.

The scheduling of installation and Inspect Install and Test equipment are done with the help of PMSupport2 at a cost of $1200 and $600 respectively. To Install PMs IS equipment is done with the help of PMSupport2, galaxy IT, phone, fax, Ethernet and IS services at a cost of $6000, $5200, $1000, $1000, $3000 and $25000 respectively. The activities like creation of roster for training, creation of training plan, creation of training schedule, training of group 1 and follow-up group 1are done by the project manager at a cost of $800, $1600, $1600, $4000 and $4000 respectively. On the other hand such activities as training group 2, follow-up group 2, are done using are done with the use of PMSupport1 at a cost of $3000 each while training group 3 and follow-up group 3 are done using PMSupport2 at a cost of $3000 each.

The WBS also provides the hourly rate for each activity and this is broken down as follows:

Cost Budgeting

Resource	Cost
PMSupport2	$17700
Cleanup Crew	$11586
Galaxy IT	$5720
Project Manager	$26400
PMSupport1	$19275
Phone	$1000
Fax	$1000
Ethernet	$3000
IS Services	$25000
Sharepoint server License	$7000
SQL server license	$3399
Galaxy PM1	$5200
Galaxy PM2	$5200
Galaxy PM2	$5200
IS Vendor	$8000
Total	$148,280.00

Cost Controlling

In order to control cost well, the cost estimates in this case has been made in the charter. The same estimates are scheduled to be finished as soon as possible so as to capture the scope errors or changes. Considering the above cost budgeting, it is clear that the human resource, through the project manager is taking the lion share of all the costs budgeted. Therefore, if there should be trade-offs, it should focus on the cost allocated to the human resource. Consequently, this can be done by reducing the headcount and putting in place incentives and motivation that will encourage the remaining headcount to work hard and deliver the objectives of the project. This will cut down the cost of managing the project while increasing the output. There are other resources that are used in several activities. With regards to this, one resource can be used to execute more than one activity without the need for buying another resource or item each time there is need for the same (Taylor, 2008).

References:

Taylor, J. (2008). Project scheduling and cost control: Planning, monitoring and controlling the baseline. Ft. Lauderdale, Fla: J. Ross Pub.

Martin, R. E. (2005). Cost control, college access, and competition in higher education. Cheltenham, UK [u.a.: Elgar.

Itemhourly rateqty Total cost eachfixed costsqtytotal cost eachTotal fixed vs varaible

Bootcamp $3,862.00 311586

sharepoint server license $7,000.00 17000

SQL server license $3,399.00 13399

IS Server $25,000.00 125000

Phone $1,000.00 11000

Fax $1,000.00 11000

Ethernet $3,000.00 13000$51,985.00

Project manager100 264.00$26,400.00

PMS175 257.00$19,275.00

PMS275 236.00$17,700.00

Galaxy PM1 cost65 80.00$5,200.00

Galaxy PM2 Cost65 80.00$5,200.00

Galaxy PM3 Cost65 80.00$5,200.00

Cleanup Crew100 36.00$3,600.00

IS Vendor100 80.00$8,000.00

Galaxy IT Cost65 $5,720.00 $96,295.00

$148,280.00