ITEC 640 United Medical and Dental College Predicting Cost Discussion

Hi, Please, read and respond to peer discussions in 75 – 100 words. Please references should be in APA style. 

Peer 1:

IT Project managers have to deal with a lot of budgeting for projects. Many times they need to compromise on what they want as part of the project. It is important to have a estimate cost, because it lets the people know how long the project will take and how much money they will spend. According to Brett Harned, “A project estimate gives you and your stakeholders a general idea of how much time, effort, and money it’ll take to get the job done. That makes it easier to build a feasible project budget and plan so you can set your team and organization up for success.” (2022, para 5) The ability to make the work easier and feasible is extremely important when trying to create a project that is going to flow. 

When project managers estimate the cost and the time of a project, they are splitting it up into little task. With having smaller task, it is easy to be able to know exactly what parts are needed for the project and therefore know how long the time will take with the little task adding into a big project. It also helps with the cost by knowing exactly how much the smaller task cost while working on them. According to Bert Markgraf, “Methods for estimating project times and costs focus on simplifying the process and breaking it down into little steps. Such methods allow project managers to estimate the cost and duration of small tasks more reliably. Estimates of many small tasks will be both high and low, and some will cancel out, reducing the overall error.” (2016, para 1) With this being in place, it allows the project to be done quicker and it is easier to put everything together at the end. 

references:

Harned, B. (n.d.). How to estimate project time & cost in 7 steps. TeamGantt. Retrieved July 1, 2022, from https://www.teamgantt.com/project-management-guide/how-to-estimate-projects

Markgraf, B. (2016, October 26). Six methods for the estimation of activity duration in project management. Small Business – Chron.com. Retrieved July 1, 2022, from https://smallbusiness.chron.com/six-methods-estimation-activity-duration-project-management-4178 

Peer 2: 

The requirement phrase is important in any project because you should be able to provide a significant outcome. When you have a clear strategy, it will help create a great step-to-step process for the project. IT professionals can utilize these cost estimating techniques: analogous estimating, bottom-up estimating, and parametric estimating. Analogous estimating which is referred to as “top-down estimating”, and this is based on the available data. You must use the actual time and cost to estimate the project. For example, if an IT manager’s budget for the previous fiscal year was $200,000, then the estimated budget for the new fiscal year is $200,00. Bottom-up estimating is a technique used to get the total estimate for the whole project. This technique is lower level in the work breakdown structure (WBS) which is called the activities. Think of it as a detailed list and will estimate each step of the project. For example, when IT project managers estimate all of the status reporting: an IT PM would do 1 report (resource), it would take 15 mins to complete (duration), and it may cost $15,000 (costs). Parametric estimating uses a mathematical model to get a prediction of project costs. This calculates the time, cost, and resources, this calculation will help your project to have a successful outcome. For example, an IT project team at a hospital may be tasked to estimate the computer cost for a space in the hospital. Another important aspect of cost estimating is cost budgeting for your project. This process can help you measure your project performance or during the project. The project reports need to be completed 100% and the reports help control the project cost. The rules for the reports on based on the project manager. I feel it depends on how big or small the project you are working on. For big projects, I would use the 50/50 rule, and for small projects, I would the 20/80 rule. Lastly, The payback period is important because while working on a project you need to know how long it will take to recover.

University of Maryland Global Campus. (2022). Lesson 7 Cost Management. Document posted in UMGC [ITEC 640 9041 (2222)] online classroom, archived at https://learn.umgc.edu 

Peer 3: One of the most important elements of a project than can cause it to be a success or a failure are the cost associated with it. Cost management is the process that involves planning, controlling, and otherwise handling the budget of a business – cost management helps the business predict unavoidable expenses with as much accuracy as possible (Kojic 2022). It can be very difficult for IT project managers to estimate the entire cost of the project and the residual cost that can be associated with the project. There are 4 main project budget management techniques:

• Incremental- Based on the cost from previous projects
• Activity Based- Based on Revenue an organization generates
• Value Proposition- Based on the assumed value to the project
• Zero Based – Based on projected cost of products and services similar to that needed for the project.