1. Project Cost Estimation for MAGIC Project.
1. Project Cost Estimation for MAGIC Project. Find in the attachment for additional information on the MAGIC project. The attached MAGIC Project WBS & Schedule document gives you planning details about the project, its WBS constructed, schedule developed, and resources planned and assignment information.
INTRODUCTION
Congratulations! You were just informed that your team has been awarded a new IT project titled “MAGIC Project”, which aims to develop a super and fantastic software program that can work like magic!
Upon receiving this great mission, you worked closely with your team members and the clients to determine the Scope and Schedule for this magic project. Yes, you have planned on two aspects of the triple constraints already, with only one left to form the complete project baseline plan (see the attached draft WBS and Schedule). Great starting point!
DESCRIPTION
So, you have put the task – Cost Estimation – as of the 1st priority on your busy agenda today. Now you have gathered all your great team members here and where should you start?
TASK 1
You quietly browsed through the lecture notes you took in one PM class a couple of years ago (lucky you didn’t throw them away!) and made up your mind that you should start by identifying the cost categories and cost items related to completing this magic project. After several turns of hot discussions, you and your team have agreed on the following identified costs:
Cost Type
Cost Estimate
Total Estimate:__________________________
You discussed the initial estimates with the top management and they seem to see eye to eye with you about the identified cost items. As a kindly reminder, they also suggest you go over the estimates once more to make sure there are no missing items. For instance, have you considered the following cost types/items: human resource cost, software development costs, software purchase costs, hardware costs, networks, ongoing support costs, and possible Admin costs (above typical overhead)…
TASK 2
Now you are pretty confident that your cost estimates are reasonable and comprehensive. What is the next step to go? Once again, you feel so glad that you kept a good record of your school stuff so that you have the notes to refer to whenever needed! Here you go – allocate the identified cost estimates to individual work items over the project duration and develop the time-phased project budget (a.k.a. cost baseline)!
Months
Tasks
April
May
June
July
August
Total by Task
Monthly Planned
Cumulative
2. SEE BELOW FOR THIS WEEK’S DISCUSSION TOPICS. YOU CAN DISCUSS ANY OF THE FOLLOWING TOPICS (TITLE YOUR THREAD APPROPRIATELY TO INDICATE THE TOPIC CHOSEN).
Discussion Topics:
Discuss factors that influence the cost estimates of a global or international project. Consider possible international travel expenses and selection of sites involved etc.
Suppose you were asked to prepare a cost estimate for a project to develop a software package for CWU’s intranet. How would you start? Give examples of the various types of costs. How long would it take you to prepare a good estimate? What approach would you use to develop a cost estimate?
There are many examples and real cost data or budget inputs. Budgets for weddings, for example, and Microsoft even provides an Excel wedding budget template (which can be downloaded at https://templates.office.com/en-us/wedding-budget-template-tm22305013 (Note: if the link expires, then go to https://templates.office.com/?legRedir=true&CorrelationId=edc8735e-4795-4081-9fc7-3837ad1b37ac and type in “Wedding budget template” to search for one) Comment on this template and would you suggest adding/removing/changing any cost items therein?
What are the major issues with cost estimation of software projects given the fact that less than 9% of IT projects are completed on schedule and budget, and over half of the software projects will cost almost 200% of their original budget?
What can organizations do to ensure that estimates are good and realistic? What can they do to prevent cost overruns?
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