Project Planning and Budgeting

This article discusses project planning and budgeting, cost management plan, quality management plan, and tools and techniques used for planning project quality management. It also explains how project cost can be affected by poor quality.

Running head: PROJECT PLANNING AND BUDGETING 1
Project Planning and Budgeting
Name
Institution Affiliation

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Part A: Defining Project Quality and its Association to Project Cost Management
According to Kerzner, & Kerzner, (2017) quality on a project is the process through
which the project deliverables as well as outcomes are generated in accordance to the
customer’s specifications, plans and needs. Therefore, quality management complement
project management in the sense that they both emphasis on customer satisfaction. Quality
results in customer satisfaction.
Tools and techniques used for planning project quality management
There are various tools and techniques used for planning a project’s quality
management such as cost benefits analysis, cost of quality and quality control are the primary
planning tools:
Cost benefit analysis: It is also referred to as Benefit-Cost Analysis. Accordingly, this
tool is used to illustrate the value of conducting a project. Therefore, cost benefit analysis
plays the role of calculating the expenses involved to generate a service, product or outcome
for comparison with the benefits supposed to be achieved. Similarly, cost-benefit analysis
provides the present value of upcoming earnings which aid for maters of comparison with
other projects.
Cost of quality (COQ): This is a tool applied in the project for purposes of decision-
making. On the other hand cost of quality is defined as the aggregate expenses needed to
come up with poor quality product or service to the project management defined standards.
Quality control: It is the process of monitoring as well as recording the results of
executing the quality of practices to evaluate performance and provide necessary
recommendation for modification (Larson, & Gray, 2015). Thus, quality control is concerned
with the project results where it works to ensure that the outcomes comply with the quality
standards described for the project to eliminate any causes of unsatisfying performance.

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In addition other planning tools include force filed analysis (FFA), brainstorming and
nominal group technique (NGT). Force filed analysis is a technique used for analysis
concepts by diving these concepts in terms of their characteristic advantages against their
disadvantages. Brainstorming is a technique used for collecting information whereby
different unfiltered inputs are solicited and collected for later analysis and decision-making
(Martinelli, & Milosevic, 2016). On the other hand, Nominal group technique is a refinement
of brainstorming which include ranking of ideas as an extra mechanism in accordance to the
assumptions reached by a nominal groups. Certainly, the ranking of ideas is significant as it
help to generate better results as compared to the traditional brainstorming. On the other
hand, there are also additional tools used in both control quality and quality planning such as
scatter diagrams, histograms, control charts, Pareto diagrams, check sheets, flowcharts, and
cause-and-effect diagrams. These tools are commonly referred to as Ishikawa’s seven basics
tools.
How project cost can be affected by poor quality?
The Cost of poor Quality is the expense associated with giving poor quality service or
product. A good example of cost of poor quality is when a business spends money a certain
project with the intention to produce a product which particular specification but the money is
lost due to the product delivered not beings in the position to meet the business requirements
and specifications.
Part B: Cost and Quality Management Plans
COST MANAGEMENT PLAN
Cost management plan is a process that is majorly concerned with planning,
budgeting and controlling of the project. Therefore, the cost management plan entails
practices such as estimating, planning, manging, budgeting, control as well as funding of the

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expenses of the project within the specified and certified budget. The process of cost
management runs throughout the entire project lifecycle starting from initial planning stage to
evaluating the actual performance cost and project accomplishment (Larson, & Gray, 2015).
Consequently, the main process of project costs management include resource planning, cist
budgeting, cost control and cost estimation.
Resource planning: Resource planning is the process of identifying the project’s physical
resources that is individuals, materials and equipment as well as the quantities that are
supposed to be used to undertake project activities (Kerzner, & Kerzner, 2017). Therefore,
resource planning involves a number of inputs, tools and techniques as well as outputs.
 Resource planning inputs: The inputs of resource panning include scope statement,
work breakdown structure, historical information, resource pool description,
organisational policies.
 Work breakdown structure: The WBS is used to identify the projects aspects that will
require resources hence it is key input to resource planning.
 Historical information: This provides past information about the kind of resources
needed for a similar initial project that can be used if need be.
 Scope statement: The scope statement involves justification of the project objectives
which are explicitly considered during resource planning.
 Resource pool description: accordingly, this provide knowledge regarding the type of
resources that is equipment, people as well as materials which are potentially
significant for resource planning (Harrison, & Lock, 2017).
 Organisational policies: the policies of undertaking organisation concerning the shift
as well as the purchase of rental of equipment and supplies has be considered at the
time of resource planning.

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Tools and techniques of resource planning: In order to determine the tools and resource
required for resource planning its calls for expert judgement. Indeed, an expert judgement
comes from an expert’s professional experience. On the same note, resource planning
demand for alternative identification since projects are likely to change over time thus, it is
important to take a range of scenarios into account. In so doing, it is possible to come up with
solutions for use as change happens (Heagney, 2016). Therefore, alternative identification
involves two approaches pattern thinking and lateral thinking. Pattern thinking is an approach
that entails pattern recognition which is relevant for improvement in accordance to the
previous experiences. Lateral thinking is a method that calls for creative thinking as well as
problem solving which concepts which could not be obvious initially.
Outputs from resource planning: The outputs of resource planning defines the type of
resources as well as the quantities in which every component included in the work breakdown
structure.
Cost Estimation
Cost estimation include establishing an approximation of the expenses of the
resources required to ensure that it accomplishes the project events. Therefore, cost
estimation involves coming up with an evaluation of the possible quantitative results that is
the amount of money that incurred by the organisation to make available the service or
product needed (Heldman, 2018). As a result, cost estimation include considering and
identifying different costing alternatives. Accordingly, cost estimation involves inputs, tools
and techniques as well as outputs.
Inputs to cost estimation
The inputs to cost estimation include work breakdown structure, resource requirements,
resource rates, event duration estimates, historical information and chart of accounts.

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Work breakdown structure: The WBS is used to identify the projects aspects that will require
resources hence it is key input to resource planning.
Resource requirements: Resource planning is the process of identifying the project’s physical
resources that is individuals, materials and equipment as well as the quantities that are
supposed to be used to undertake project activities (Martinelli, & Milosevic, 2016).
Therefore, cost estimation involves a number of inputs, tools and techniques as well as
outputs.
Resource rates: It is important that the groups or person preparing the estimates is well
conversant with unit rates such as the cost of employee per hour for every resource so as to
compute the project costs. Certainly, in case the real rates are unknown then the rates can be
estimated.
Historical information: Historical information on cost comes in a range of source s such as
project files, project team knowledge and commercial cost estimation.
Event duration estimates: It illustrates the act of quantifying the amount of time which is
projected that the activity will last to completion.
Chart of accounts: A chart of accounts defines the coding structure utilised by the performing
company to report monetary information through its general ledger.
Tools and techniques for cost estimation
Analogous estimating: It involves using the real cost of a previous similar project to project
the cost of the present project.
Parametric modelling: It entails use of project features using a mathematical model to project
the project’s cost (Gido, Clements, & Clements, 2014).

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Bottom-up estimating: It the techniques of estimating the expense of each distinct work and
then rolling-up the estimate to determine the total project cost.
Computerised tools: It involves the use of computerised tools such as project management
software to aid in cost estimating.
Outputs from cost estimating
The cost estimating outputs include cost estimates, supporting details, and cost
management plan.
Cost Budgeting
Cost budgeting entails the general allocation of cost estimates to specific work items
so that to develop a cost baseline for evaluating the performance of the project (Newton,
2016). The project cost is estimated at $275,500 as shown in the table below.
No
Units/hrs
Cost/hrs/unit
($)
Subtotal
s ($)
WBS
Level 1
Total
($)
%
Total
1. Project
Management
101,000 37.1
Project manager 500 70 35,000
Project team members 1200 55 66,000
Contractors (10 of total
project management)
10,100 10,100 3.7
2. Resource planning
(20% of the project
20,200 20,200 7.4

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management)
3. Tools and
techniques (40% of
the project
management)
40,400 40,400 14.8
Hardware 20,200 20,200 7.4
Handheld devices 20 800 16,000
Servers 3 1400 4,200
Software 20,200 20,200 7.4
Licensed software 20 200 4,000
Software development 16,000
4. Testing (10% of the
total cost for
hardware and
software)
10,100 3.7
Training and support 30,000 11.1
Reserve (20% of total
estimate)
20,200 7.4
Total project cost estimate 272,500 100
Table 1: Cost management plan
QUALITY MANAGEMENT PLAN
Project quality management plan is a procedure that is needed to make sure that the
project is a position to satisfy the needs and specifications for which it was intended.
Therefore, quality management entails all the general management functionalities which

PROJECT PLANNING AND BUDGETING 9
determine the quality objectives, policy as well as responsibilities (Aaltonen, & Kujala,
2010). Therefore, quality management plan involves quality control, quality planning, quality
improvement, and quality assurance. Particularly, the primary quality management process
include quality planning, quality assurance and quality control.
Quality planning
The process of quality planning include the identification of the quality standards
significant to the project as well as determining ways on how to realise them. Accordingly,
this is one of the chief facilitating projects during planning which has to be undertaken
consistently and parallel with other processes of project planning (Sahi, 2009). Therefore,
quality planning involves certain inputs tools and techniques and outputs.
Inputs to Quality Planning
Quality planning has various inputs such as:
Quality policy: Quality policy is describes as the general directive and intent of the
organisation in regard to quality.
Scope statement: The scope statement is a major input to quality planning as it documents
key project deliverables together with the project objectives which work to describes relevant
stakeholder necessities.
Tools and techniques for quality planning
Some of the tools and techniques used for ensuring quality planning include cost
analysis, benchmarking, design of experiments and flowcharting.
 Cost analysis: The process of quality planning has to consider cost/benefit trade-offs.
Consequently, the core benefit of realising quality requirements is less work which

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means lower expenses, higher productivity as well as increased stakeholder
satisfaction.
 Benchmarking: It involves making comparison between real-time project carry outs
against other projects so as to come up with concepts for enhancing and offering a
standard by which to assess project performance (AIMS, 2015).
 Design of experiments: This is an analytical technique that aids in the identification of
the variables that are more influential to the entire project outcome.
 Flowcharting: It is used to illustrate the manner in which the project elements
interrelate.
Quality assurance
Quality assurance is the process used to ensure that all the planned project activities
are systematically implemented within the borders of quality standards to deliver confidence
that the project meets the appropriate standards of quality (Ainamo et al., 2010). Certainly,
quality assurance involves various inputs, tools and techniques as well as outputs. The inputs
to quality assurance include quality management plan and results quality control measures.
The tools and techniques for quality assurance comprises quality audits, and quality planning
tools and techniques.
Quality Control
Quality control encompasses monitoring certain project outcomes to determine
whether they agree with the accepted quality standards by looking for ways to eliminate
causes of unsatisfactory outcomes (Pensar, 2010). The inputs to quality control include
checklists and work lists. The tools and techniques for quality control include control charts,
flowcharting, and Pareto diagrams among others. Lastly, the outputs from quality control
include completed checklists, acceptance decisions, quality improvement and rework.

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References
Aaltonen, K., & Kujala, J. (2010). A project lifecycle perspective on stakeholder influence
strategies in global projects. Scandinavian Journal of Management, 26(4), 381–397.
AIMS (2015). What is Project Cost Management? Tools, Techniques and Processes for PMP
& PMBOK | AIMS Lecture. Retrieved from https://www.youtube.com/watch?
v=PflAkMayixM
Ainamo, A., Artto, K., Levitt, R. E., Orr, R. J., Scott, W. R., & Tainio, R. (2010). Global
projects: Strategic perspectives. Scandinavian Journal of Management, 26(4), 343–
351.

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Gido, J., Clements, J., & Clements, J. (2014). Successful project management. Nelson
Education.
Harrison, F., & Lock, D. (2017). Advanced project management: a structured approach.
Routledge.
Heagney, J. (2016). Fundamentals of project management. Amacom.
Heldman, K. (2018). PMP: project management professional exam study guide. John Wiley
& Sons.
Kerzner, H., & Kerzner, H. R. (2017). Project management: a systems approach to planning,
scheduling, and controlling. John Wiley & Sons.
Larson, E. W., & Gray, C. F. (2015). A Guide to the Project Management Body of
Knowledge: PMBOK (®) Guide. Project Management Institute.
Martinelli, R. J., & Milosevic, D. Z. (2016). Project management toolbox: tools and
techniques for the practicing project manager. John Wiley & Sons.
Newton, R. (2016). Project management step by step: how to plan and manage a highly
successful project. Pearson UK.
Pensar, S. (2010, August 17). Five challenges in global projects. Retrieved from
https://www.itforbusiness.org/article/five-challenges-in-global-projects/
Sahi, R. (2009). Managing Projects across the Global Enterprise. Retrieved from
http://www.pmi.org/learning/managing-projects-global-six-challenges-6823

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