Managing project cost Variances

During the planning phase of your software project, you gather information you need to create your cost estimates, budgets, and baselines (see Chapter 9). Chances are that with a software project, most of your costs will be associated with resources required to complete the project, including programmers, analysts, software engineers, application testers, and other personnel.

Throughout the project, you need to be aware of variances in what you planned for your project to cost, compared to actual costs. For example, if you planned to have a certain percentage of experienced programmers and a certain proportion of junior or associate programmers, this ratio will be affected if a junior programmer is removed from the project and you replace her with a senior programmer. This action will affect your project costs and create a variance.

Aside from the cost of resources creating project cost variance, other actions or decisions can also potentially create a project cost variance. For instance, say you start to run out of time on your project and instead of creating a thoughtful and innovative plan of corrective action, you decide to sweep the problem under the rug by just eliminating one phase of system testing. After all, if there were bugs or problems in the software, wouldn't they have been caught in one of the previous phases of testing? "Besides," you say to yourself as you justify this craziness, "I'll be the hero of Projectville when the client sees how much time and money I'm saving by skipping one small system testing phase of the project!" This ingenious decision to eliminate some system testing could result in added time to the project due to recod-ing, eliminating bugs, and then more thorough testing.

Adding and removing resources creates cost variances, but your bad decisions can also create cost variances. Be careful of the project decisions you make; they can, and probably will, have lasting implications, not just for this one particular part of your project, but also for future phases.

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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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