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Project Portfolio Management : Assignment

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Added on  2020-11-30

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EBUS614: Project and Portfolio Management in OrganisationsLecture 6 – Budgeting and SchedulingDr Fotios Misopoulos and Dr Matthew Tickle
Project Portfolio Management : Assignment_1
What we will discuss today1.BudgetingBudget EstimationTop Down vs. Bottom Up BudgetingWork Element CostingCategory Budgeting vs. Project Budgeting2.SchedulingTechniques & TerminologyNetwork Diagrams (Activity on Node)Expected Time of ActivitiesCritical PathSlack2
Project Portfolio Management : Assignment_2
BudgetingA budget is a plan for allocating resources to a projectOnce signed off by senior management, the project manager can begin spending resourcesManagers must work within budget constraintsSenior management must be careful not to over / under-fund projectsProjects with higher budgets usually get more support from senior managementThe budget is also a monitoring and control mechanismAllows resource use to be monitored carefully through comparisons between actual and planned use of resources3
Project Portfolio Management : Assignment_3
BudgetingWhen developing a budget, we must:1.Forecast what resources the project will require2.Calculate the required quantity of each3.Decide when they will be needed4.Understand how much they will costAn easy way to develop a budget is to cost the Work Breakdown Structure (WBS)We use either Top-Down or Bottom-Up Budgeting to calculate the cost of each activity within the WBS4
Project Portfolio Management : Assignment_4
Top-Down BudgetingHigh level cost estimate for entire project is created based on opinions and experiences of middle and senior managersLower managers then breakdown this overall cost estimate into estimates for specific tasksProcess continues to lowest level5
Project Portfolio Management : Assignment_5
Top-Down BudgetingAdvantagesDisadvantagesOverall budget is very accurateSenior managers tend to underestimate costsEnsures budget is highly predictableMore difficult to get buy-inNo aspect of the project is overlookedCan lead to competition between managersExperience of senior management ensures “hidden” activities are included in overall estimate6
Project Portfolio Management : Assignment_6
Bottom-Up BudgetingTasks, schedules and initial budgets are constructed based on WBS to create Work PackagesLower managers are then asked about the time and resources required to complete their work packagesDiscussions between senior and lower managers are used to resolve differences of opinionOverheads and profits are added, alongside a project reserve for contingenciesThis forms the final project budget7
Project Portfolio Management : Assignment_7
Bottom-Up BudgetingAdvantagesDisadvantagesMore accurateMore difficultGreater buy-in from lower managersRisk that not all elements of the project will be includedIncreases Junior management experienceIndividuals more likely to overestimate resource requirementsMore likely to include “unusual” expensesSenior managers more likely to cut the estimated budgets8
Project Portfolio Management : Assignment_8

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