Info

Software Productivity Research, Inc.

Products support:

• Estimation

• Benchmarking

• Function Point Analysis

www.spr.com

Table l.5 Project Management Software

SOURCE: G. H. Anthes, "Competitors," Computerworld, March 18, 2002. http:IIwww.computerworld.eomIhardwaretopicsIstorageIstoryI0,10801,ó9118,00.html.

however, may also provide certain benefits to the employee (i.e., health care, life insurance, and so forth) that should be included in the cost for using this particular resource. Since these costs are going to vary from organization to organization, let's assume that our friends in the accounting department have conducted a cost accounting analysis for us and that the true cost of using this particular employee (i.e. hourly wage plus benefits) is \$25 an hour. Subsequently, if we pay our employee for one day's work (i.e., an eight-hour day), the cost of completing this particular task is:

Cost of task = Estimated duration x True cost of the resource = 8 hours x \$25/hour = \$200

We can even estimate the cost of a salaried employee by prorating her or his salary. This just means that we assign a portion of that salary to the task at hand. For example, let's say that the fully loaded. or true annual, cost to the organization is \$65,000. If this employee works a five-day work week, the associated true cost to the organization would be for 5 * 52 = 260 days a year. Therefore, the prorated cost per day would be \$65,000 - 260 workdays = \$250 a day.

However, this whole process can be greatly simplified if we use a project management software tool. We still have to identify the tasks and accurately estimate their durations, but determining the costs of a particular task and for the whole project becomes painless. Figure 7.9 shows how resources can be assigned to specific tasks on a project.

The project's total budget is computed using a bottom-up approach by summing the individual costs for each task or activity. As shown in Figure 7.10, the basic budget for this project is \$5,203.85,

Other Costs

It is important to keep in mind that our example has only considered direct costs, or the cost of labor for using this resource directly. In addition to direct labor, resource

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