Project Management - Portfolio Milestone Building on your work in Module 1, 2, and 4 Portfolio Project Milestones and with a specific focus on your product project at the company you selected, develop

Module 5 Portfolio Milestone Tips and Resources

Cost estimates

The order you want to assemble is to start with your Cost estimates. You want to approach it as if whatever that project is that you've created, you know you will have to have some costs assigned to labor. It might be assigned to the equipment. It might be fees you have to pay, whatever those things are; you're going to have some cost estimates. s I'm not going to check what those cost estimates are if they're valid or not, but just make them reasonable so you can use them. However, you derive those cost estimates, you want to show what you're estimating in terms of either its labor or the fee or its equipment, whatever the case may be, and then you're going to show you know your estimates. In the front part of this milestone, you're going to want to explain what your methodology was for determining your cost estimate, so that would be the basis of your estimates. The vendor bid analysis again don't overthink it; what are the numbers that you pulled from wherever you pulled those numbers from terms of the cost estimates, and you're going to do a cost benefit analysis and the cost of quality. Go back in our material, or you can use Google or YouTube and just type in cost or cost-benefit analysis cost quality. It will walk you through how to derive those particular items. Now from your cost estimates, you've got your budget.

Budget

Now one of the things that always trips everybody up most people see budget as a bottom-line number when that is not the budget. The budget is a lot more than that, so you should be thinking of a spending plan when you see a budget. What will you spend the money on, when do you need to spend the money, and how is that particular item or items being funded? Now in the real world, you'll know pretty much all those components. You'll know when you need to spend that money, you know what you need to spend that money on, and you should have a pretty good idea if you don't, you're going to work with your project sponsor to determine where is that funding coming from either an identifiable source or a future source that you guys are going to tap into. In terms of our assignment, you have some latitude; obviously, we're not necessarily doing this for real, so you're going to have to come up with an identifiable source. For example, if you're doing something in the event planning space, maybe that money is coming from the sponsor organizing sponsor. If it's a piece of technology may be, it's coming from the technology department, or maybe it's coming from whatever department that you know is going to be using that particular technology. That gives you part of the equation, but it's not the whole thing. That only produces for the cost baseline where you're at it this point in time and how you project your spending. You must have your management reserves, your contingency reserves, activity contingency reserves, and project funding requirements (Hopefully, you'll remember those from our conversations on risk management). If you do the cost baseline the way I talked about, you'll knock out that project funding requirement because you will have identified the funding mechanism for those things.

Procurement

How are you going to procure; is it just go on the web, click a few buttons, and you order it, or is it something that you need to issue an RFP or an RFQ depending on your threshold you know 15,200 and 50,000, whatever you imagine those spending issues to be at in that organization is going to shape your procurement process. So, what we're looking for here in terms of procurement is if you know what is going to be your plan to procure. Are you using RFP, RFQ, a balance scorecard to evaluate those bids for proposal evaluation? Are you advertising the bids? Are you placing a little ad somewhere in some newspaper, or is there a place on your website? How are you going to do that?

Schedule Forecast

How do you plan on monitoring to spend on monitoring the schedule? Where should you be at two months down the line, three months down the line, four months down the line, so forth? Here's a hint, in your project charter, hopefully, you identified some milestones. Your milestones can help you stake out your schedule forecast. You're going to match that up with your spending plan in terms of where you think things are going to be spent, and all of a sudden, not only do you have a spending forecast, but we have a time forecast as well. Certain activities have to happen for the project to stay on course.

Rules for cost and performance management

So now the rules of cost and performance management in earned value management are right there, there are three key dimensions that you need to identify in each work package. The work package comes from the work breakdown structure. Remember, the work package is that high-level tasks and subtasks underneath it. So, wherever you have an out debt in debt of task that’s a work package; you can identify the three key dimensions of earn value management there and then the rules.

Earned Value Management

Out of all the things that I just discussed; this is probably the thing that most people trip up on the rule's discussion. I do not want to see anybody giving formulas or talk about what planned value equals whatever plan value is or CPI equals whatever that is, or budget at completion equals whatever that is. That is not what you want to do in the milestone that is what you would do in a critical thinking assignment. So, what I want you to do is think about this, nobody except for you and maybe your project team will understand earned value management. So, what you're tasked with doing is taking that very technical mathematical set of constructs and explaining it to them in a language that they can understand. I am going to give you an example, so we know that CPI is greater than one or less than one it means something; same thing with SPI if it equals one, that means we're on target right. So, we can simply wrap that part of the conversation around that language and translate that very technical speak to something that the layperson in the organization can relate to. We can say, for example, if we get to this particular task, it'll be on time, which will meet our performance evaluation for the scheduled performance. We don’t have to say schedule performance index; we can just say schedule performance they'll eat it up.

On the other hand, you might say we're going to in the first quarter of the project we're going to spend X amount of money but know according to our cost performance that will mean we have overspent for the project at that time. Note what I did, I said we're spending because we're overspending in the first quarter and maybe some good reasons to spend in the first quarter. Maybe we're getting a discount if we act now, so we're going to spend those dollars now, but that will skew our project spending plan, right? This means we're going to be over budget, but we're getting a great deal, but later in the project, we can further explain that overspending in the first quarter will be balanced out because there will be less spending. So now we've taken these very real concepts in terms of earned value management, and we're using them in a way that you know somebody in accounting could understand or somebody on the 4th floor where all the C executives are at. Okay, so those are the way that you should look at these particular things; those are the kind of the expectations that you're operationalizing all of these concepts based on your project.