Systems Pricing

The basis of successful program management is the establishment of an accurate cost package from which all members of the organization can both project and track costs. The cost data must be represented in such a manner that maximum allocation of the corporate resources of people, money, and facilities can be achieved.

The systems approach to pricing out the activity schedules and the work breakdown structure provides a means for obtaining unity within the company. The flow of information readily admits the participation of all members of the organization in the program, even if on a part-time basis. Functional managers obtain a better un-

Figure 14-11. System approach to resource control.

derstanding of how their labor fits into the total program and how their activities interface with those of other departments. For the first time, functional managers can accurately foresee how their activity can lead to corporate profits.

The project pricing model (sometimes called a strategic project planning model) acts as a management information system, forming the basis for the systems approach to resource control, as shown in Figure 14-11. The summary sheets from the computer output of the strategic pricing model provide management with the necessary data from which the selection of possible programs can be made so that maximum utilization of resources will follow.

The strategic pricing model also provides management with an invaluable tool for performing perturbation analysis on the base case costs. This perturbation analysis provides management with sufficient opportunity for design and evaluation of contingency plans, should a deviation from the original plan be required.

Project Management Made Easy

Project Management Made Easy

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.

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