Working with Costs and Budgeting. . . . 231
231 Reviewing Planned Costs
232 Working with Multiple Currencies 238
Microsoft Office Project 2003 can help you plan, forecast, and track costs associated with the performance of the project. The bulk of your costs is likely to be generated by the resources assigned to tasks. There might also be costs directly associated with tasks.
The starting point is to enter unit resource costs and any fixed costs for tasks. As resources are assigned to tasks, Project 2003 calculates these unit costs to forecast the cost for each assignment, each resource, each task, and the project as a whole.
Use this cost estimate to develop your project's budget. Or if the budget has already been imposed, see whether the project plan is in line with the realities of the budget. If it isn't, use Microsoft Project to make the necessary adjustments.
Cost planning involves estimating your costs and setting your budget, which is the subject of this chapter. If necessary, you can adjust the project plan to conform to the budget. As soon as you start executing the project, you start tracking and managing costs. At that point, you can compare actual costs to your original planned costs and analyze any variances between the two.
For information about tracking costs, including setting cost baselines and entering actual costs, see Chapter 10, "Saving a Baseline and Updating Progress." For information about managing costs, see "Monitoring and Adjusting Costs" on page 338. For more information about adjusting the project plan to conform to the budget, see "Reducing Project Costs" on page 267.
Project cost management is one of the many knowledge areas, or disciplines, required for a successful project execution. Simply put, effective project cost management ensures that the project is completed within the approved budget. Processes associated with project cost management include the following:
Resource planning After you determine the types and quantities of resources needed for the project, you can estimate costs for those resources. You obtain work resources by hiring staff through human resources processes. You obtain contract staff, material resources, and equipment resources through procurement processes. You then enter those resources into your project plan and assign them to tasks.
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What you need to know about… Project Management Made Easy! Project management consists of more than just a large building project and can encompass small projects as well. No matter what the size of your project, you need to have some sort of project management. How you manage your project has everything to do with its outcome.