Project Cost / Finance Management

MSPM Bahria University

Week – 1-2
Instructor Information

• Name : Tariq Mahmood

• Email Address: Tariq.tmahmood@gmail.com
• Cell Number: 0324-4568352
• Preferred medium of contact: Email
• Preferred Call/Text Time: 9AM to 9PM
 INTRODUCTION
• Introduce Students to Instructor and one another

Instructions:
1. His / Her Name
2. Profession & Qualification
3. Any 3 things you want to learn from this course
4. Why you picked MSPM degree program
5. Anyone working as Project Manager
6. What do you understand by this statement “”MSPM, 1.5 Years, 1Million”
7. What is one goal you’d like to accomplish during your lifetime?
 How Grading will be done?

• 30% Mid Term

• 30% Assignments/Quizes
• 40% Final Exam
 Walkthrough of Course Outline
Course Description
Project Cost/Finance focuses on the cost management of projects which plays a
pivotal role in any project. This course is designed considering project life cycle
and its dependency on cost throughout the life cycle.

Course Objectives
This course will cover the basic tools, skills, and knowledge necessary to
successfully manage a project considering cost and finance Management area
throughout project. Industries best practices and their mappings to PMI
standards will also be considered as one of the major course objectives to
synchronies students theoretical knowledge with current market scenarios and
practices.
 Walkthrough of Course Outline
Learning Outcomes
 Enhance knowledge for industries best practices for Cost/Finance
Management within organization and related projects.

 Gain knowledge of Cost Management through mapping of different project

management standards esp. PMI.

 Perform comprehensive Estimation, Budgeting and control of costs with in

projects.

 Formation of Cost Management Plans and there control and monitoring

within organization and Projects

 Knowledge of estimation, and control tools and skills like Earned Value
Management and its implementation in projects

 Gain knowledge of traditional cost processes vs agile cost processes

 Walkthrough of Course Outline
• Project Framework Mapping with Cost Management processes
• Introduction to Course and Project Management Standards
• Role of a Project Manager
• Capital Budgeting Techniques
• Cost Categories , Pricing Categories, Components of Cost
• Project Planning (Pre-requisite for Cost Management)
• Cost Estimation (Inputs, tools and Techniques)
• Project Budgeting (Inputs, tools and techniques)
• Project Cost Control (Performance Methods and Reporting) using Earned
Value Analysis
Project
A project is a temporary endeavor undertaken to create a unique product, service,
or result. The temporary nature of projects indicates that a project has a definite
beginning and end.

Program
A program is defined as a group of related projects, subprograms, and activities
managed in a coordinated way to obtain benefits not available from managing
them individually. A project may or may not be part of a program but a program
will always have projects.
Project Management office

A project management office (PMO) is a management structure that standardizes the project-
related governance processes and facilitates the sharing of resources, methodologies, tools,
and techniques. The responsibilities of a PMO can range from providing project Management
support functions to actually being responsible for
the direct management of one or more projects.
Supporting PMO: Least Control. Provide templates, best practices, training etc
Support project managers.
Controlling PMO: Moderate level of control. The main task is Project governance
and conformance.
Directive PMO: Most Controlling. Include strong governance frameworks.

Stakeholder
Any person or organization who has direct or indirect impact on project or being impacted by
project is a stakeholder.
Role of PMO in Project Finance
• PMOs with full control on Finance
 All Budgets are transferred to PMO
 PMO Allocated funds

• PMOs with no Control on Finance

 Mostly on Projects using Internal Resources
 Only tracks the progress

 Finance and PMO Partnership

 Finance resources are part of PMO Team
Project Manager Role

• Leadership role to achieve project Objectives

• Project Manager should possess Project Management Knowledge,
Technical know how and Understanding & Experience.
• The project manager define the project, reduce it to a set of manageable
tasks, obtain appropriate resources and build a team .
• The project manager must set the goal of the project and motivate the
project team to complete the project on time within budget according to
the sponsor expectations.
• The project manager must keep updated all stakeholders of progress on a
regular basis.
• The project manager must assess and monitor risks of project and mitigate
them on regular basis.

All Projects are different and Project Mangers must be quick learner and adapt to
changing environment.
 Project Manager Skills / Competencies
Communication! Communication! Communication!
• The ability to communicate with stakeholders, including the team , sponsors
and anyone else who is impacted by the project.
• Fine tuned skills using multiple methods (e.g., verbal, written, and
nonverbal);
• Creating, maintaining, and adhering to communications plans and schedules;
• Communicating predictably and consistently;
• Seeking to understand the project stakeholders’ communication needs
(communication may be the only deliverable that some stakeholders received
until the project’s end product or service is completed);
• Making communications concise, clear, complete, simple, relevant, and
tailored;
• Including important positive and negative news;
• Incorporating feedback channels
• Relationship skills involving the development of extensive networks of
people
Project Manager Skills / Competencies
Project manager should have or need to have the following competencies:
• Leadership/People management
• Effective verbal and written communication
• Negotiation
• Conflict management
• Planning
• Contract management
• Estimating
• Problem solving
• Creative thinking
• Time management
 Project Cost Management
How its Different

Post – Project
Phase
Pre – Project
Phase

QUALITY

SCOPE
Project Cost Management
Pre-Project Kickoff Phase
Prioritized Project with PM Assigned
 Project Cost Management
Post- Project Kickoff Phase
• Initiation

• Planning

• Executing

• Monitoring & Controlling

• Closing

QUALITY

SCOPE
Project management Process Groups
 Project management Process Groups
• Initiating. Processes performed to define a new project or a new
phase of an existing project by obtaining authorization to start the
project or phase.
• Planning. Processes required to establish the scope of the project,
refine the objectives and define the course of action required to attain
the objectives that the project was undertaken to achieve.
• Executing. Processes performed to complete the work defined in the
project management plan to satisfy the project requirements.
• Monitoring and Control. Processes required to track, review, and
regulate the progress and performance of the project; identify any
areas in which changes to the plan are required; and initiate the
corresponding changes.
• Closing. Processes performed to formally complete or close the
project, phase, or contract.
Project Life Cycle
 Assignment / Presentation
• Pick any recently completed project or under development in
Pakistan.

• Research its failures/success factors.

• Role of Cost in success and failure of the Project.

• A 3-5 page presentation/hard copy on your analysis

highlighting key cost elements for every project.

• All assignments must be submitted Friday by 12 noon at

tariq.tmahmood@gmail.com