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Estimate Cost

it talks about estimating project cost

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yuti6211
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25 views

Estimate Cost

it talks about estimating project cost

Uploaded by

yuti6211
Copyright
© © All Rights Reserved
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
You are on page 1/ 27

Estimate cost for Web

and Database Projects


Instructor: Bedru Y.
Target Group:L-III students

WEB DEVELOPMENT AND DATABASE ADMINISTRATION 1


Course Objective
◦ A student completing this course will be able
to understand and apply
◦ Formal software project management approach

◦ Tools and techniques

◦ Principles and theories

◦ Project management framework, and

◦ Development of software project management plan

WEB DEVELOPMENT AND DATABASE ADMINISTRATION 2


Overview of
Software
Project
Management
CHAPTER 1

WEB DEVELOPMENT AND DATABASE ADMINISTRATION 3


Causes of Project
Management Failure
◦ Bad Communications
◦ Poor schedule or resource Management
(mismanagement)
◦ Weak requirements definitions (leads to inadequate
planning)
◦ Inadequate planning, assumptions, risks, or resources
◦ Use of new or unproven technologies/methods

WEB DEVELOPMENT AND DATABASE ADMINISTRATION 4


… Causes of PM Failure
◦ Ineffective (or nonexistent) quality controls
◦ Managing multiple projects at once or multi-tasking
resources
◦ Supply chain failures
◦ Scope creep or poor impact analysis
◦ Lack of qualified resources

WEB DEVELOPMENT AND DATABASE ADMINISTRATION 5


Advantages of Using
Formal SPM
◦ Better control of financial, ◦ Higher quality and

physical, and human increased reliability

resources ◦ Higher profit margins

◦ Improved customer relations ◦ Improved productivity


◦ Better internal
◦ Shorter development times
coordination
◦ Lower costs
◦ Higher worker morale

WEB DEVELOPMENT AND DATABASE ADMINISTRATION 6


What is project?
◦ A project is a temporary endeavor
undertaken to create a unique product
or service.

WEB DEVELOPMENT AND DATABASE ADMINISTRATION 7


Attributes of projects

◦ Unique purpose

◦ Temporariness

◦ Require resources, often from various areas

◦ Should have a primary sponsor and/or


customer
◦ Involve uncertainty
WEB DEVELOPMENT AND DATABASE ADMINISTRATION 8
The Triple Constraint
◦ Every project is constrained in different ways by its

◦ Scope goals: What is the project trying to

accomplish?
◦ Time goals: How long should it take to complete?

◦ Cost goals: What should it cost?


◦ It is the project manager’s duty to balance these three
often competing goals
WEB DEVELOPMENT AND DATABASE ADMINISTRATION 9
The Triple Constraint of Project
Management

WEB DEVELOPMENT AND DATABASE ADMINISTRATION 10


What is project
management?
◦ Project Management is the discipline of planning,
organizing, and managing resources to bring about the
successful completion of specific project goals and
objectives.
◦ Project management is “the application of knowledge,
skills, tools, and techniques to project activities in order to
meet project requirements.” (PMI*)
*The Project Management Institute (PMI) is an international professional society. Their web site is www.pmi.org.

WEB DEVELOPMENT AND DATABASE ADMINISTRATION 11


Project Management
Framework

WEB DEVELOPMENT AND DATABASE ADMINISTRATION 12


Project Stakeholders
◦ Stakeholders are the people involved
in or affected by project activities
◦ Stakeholders include
◦ the project sponsor and project team
◦ support staff
◦ customers
◦ users
◦ suppliers
◦ opponents to the project
WEB DEVELOPMENT AND DATABASE ADMINISTRATION 13
Project Management
Tools and Techniques
Project management tools and techniques assist project
managers and their teams in various aspects of project
management

Some specific ones include


◦ Project Charter and WBS (scope)
◦ Gantt charts, network diagrams, critical path analysis, critical chain
scheduling (time)
◦ Cost estimates and earned value management (cost)
WEB DEVELOPMENT AND DATABASE ADMINISTRATION 14
How Project Management
(PM) Relates to Other
Disciplines
Much of the knowledge needed to manage
projects is unique to PM
However, project managers must also have
knowledge and experience in
◦ General management
◦ The application area of the project

Project managers must focus on meeting


specific project objectives
WEB DEVELOPMENT AND DATABASE ADMINISTRATION 15
Financial Analysis of
Projects
◦ Financial considerations are often an important
consideration in selecting projects
◦ Three primary methods for determining the projected
financial value of projects:
◦ Net present value (NPV) analysis

◦ Return on investment (ROI)

◦ Payback analysis
WEB DEVELOPMENT AND DATABASE ADMINISTRATION 16
Net Present Value
Analysis
◦ Net present value (NPV) analysis is a method of
calculating the expected net monetary gain or loss
from a project by discounting all expected future
cash inflows and outflows to the present point in time
◦ Projects with a positive NPV should be considered if
financial value is a key criterion
◦ The higher the NPV, the better

WEB DEVELOPMENT AND DATABASE ADMINISTRATION 17


• NPV can be computed using the following
formula

Where:
r= discount rate
t= year
n= analysis horizon (in years)

* The annual percentage rate that an amount of money is discounted to bring it to a present value

WEB DEVELOPMENT AND DATABASE ADMINISTRATION 18


Net present value
example

Note that
totals are
equal, but
NPVs are
not because of
the time value
of money.

WEB DEVELOPMENT AND DATABASE ADMINISTRATION 19


Return on Investment

Where r= rate
y=year

WEB DEVELOPMENT AND DATABASE ADMINISTRATION 20


Payback Analysis
◦ Another important financial consideration is payback analysis

◦ The payback period is the amount of time it will take to


recoup, in the form of net cash inflows, the net dollars
invested in a project
◦ Payback occurs when the cumulative discounted benefits and
costs are greater than zero
◦ Many organizations want IT projects to have a fairly short
payback period
WEB DEVELOPMENT AND DATABASE ADMINISTRATION 21
NPV, ROI, AND PAYBACK ANALYSIS FOR
PROJECT 1

WEB DEVELOPMENT AND DATABASE ADMINISTRATION 22


NPV, ROI, and Payback Analysis for
Project 2

WEB DEVELOPMENT AND DATABASE ADMINISTRATION 23


Weighted Scoring Model
◦ A weighted scoring model is a tool that provides a
systematic process for selecting projects based on
many criteria
◦ First identify criteria important to the project
selection process
◦ Then assign weights (percentages) to each
criterion so they add up to 100%
◦ Then assign scores to each criterion for each
project
◦ Multiply the scores by the weights and get the total
weighted scores
◦ The higher the weighted score, the better
WEB DEVELOPMENT AND DATABASE ADMINISTRATION 24
Since Project 2
has the highest
weighted project
score, it is the
winner!
Project 4

Project 3

Project 2

Project 1

0 10 20 30 40 50 60 70 80 90

WEB DEVELOPMENT AND DATABASE ADMINISTRATION 25


Project Charters
◦ After deciding what project to work on, it
is important to formalize projects
◦ A project charter is a document that
formally recognizes the existence of a
project and provides direction on the
project’s objectives and management
◦ Key project stakeholders should sign a
project charter to acknowledge agreement
on the need and intent of the project

WEB DEVELOPMENT AND DATABASE ADMINISTRATION 26


I thank you.

WEB DEVELOPMENT AND DATABASE ADMINISTRATION 27

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