Project Time & Cost Management: Activity definition and sequencing,

Estimating activity durations and resources, Developing the project schedule,

Schedule control and monitoring, Cost estimation techniques, Budget
development and monitoring, Earned Value Management (EVM), Cost control
and analysis
Activity Definition and Sequencing.
ACTIVITY
• Define Activities is the process of identifying and documenting the specific
actions required to produce the project deliverables.
• The main goal is to break down work packages into individual schedule
activities.
• Foundation Role: These defined activities serve as the basis for:
1. Estimating resources and durations
2. Scheduling project tasks
3. Executing planned work
4. Monitoring project progress
5. Controlling changes throughout the project lifecycle

• This process is ongoing and is performed throughout the entire project

duration.
• It ensures all activities are well-defined and aligned with the project’s
goals and objectives.
SEQUENCE ACTIVITY
• Sequence Activities is the process of identifying and documenting
relationships among project activities.
• Its main goal is to establish a logical order of tasks to maximize efficiency
while considering project constraints.
• This process is performed continuously throughout the project lifecycle
to ensure that all activities are logically connected.
• Logical sequencing of tasks helps in ensuring well-organized and smooth
project execution.
• Each activity (except the first and last) is linked to at least one
predecessor and one successor using logical relationships.
 • Lead or lag time may be applied between activities to support a practical
and achievable schedule.
• The process converts the list of activities into a project schedule network
diagram, which becomes the initial step in developing the schedule
baseline.
ESTIMATING ACTIVITY DURATIONS AND RESOURCES
• Estimate Activity Durations involves estimating the number of work
periods needed to complete each activity with the allocated resources.
• The goal is to determine the time required for each activity to reach
completion, enabling accurate planning and scheduling.
• This is an iterative process, carried out throughout the project lifecycle,
helping to refine schedule accuracy over time.
• Leads to smoother execution, on-time delivery, and adherence to budget
constraints.
• Benefits:
1. Ensures the right resources are available at the right time
2. Prevents delays and cost overruns
3. Addresses resource shortages proactively
• This process works in close coordination with:
1. Estimate Costs
2. Schedule Development
3. Resource Management

DEVELOPING THE PROJECT SCHEDULE

Develop Schedule is a crucial process that involves analyzing activity sequences,

Durations , Resource Requirements and schedule constraints to create schedule
model for project execution, monitoring, and control.
Key Inputs:
1. Project Management Plan
• Schedule Management Plan:
Defines scheduling method, tools used, and approach for schedule
calculation.
• Scope Baseline:
Includes:
1. Scope statement
2. Work Breakdown Structure (WBS)
3. WBS dictionary
2. Project Documents
• Activity Attributes:
Details used to construct the schedule model.
• Activity List:
Lists all activities to be scheduled.
• Assumption Log:
Contains assumptions and constraints impacting the schedule.
• Basis of Estimates:
Explains how duration estimates were calculated.
• Duration Estimates:
Work period estimates needed to complete each activity.
• Lessons Learned Register:
Helps apply insights from past scheduling efforts.
• Milestone List:
Key project milestone dates.
• Project Schedule Network Diagrams:
Visual representation of activity dependencies.
• Project Team Assignments:
Specifies resources assigned to each activity.
• Resource Calendars:
Shows availability of resources during the project.
 • Resource Requirements:
Details resource types and quantities needed.
• Risk Register:
Identifies risks affecting the schedule; used to define schedule reserves.
• Agreements:
Vendor timelines and commitments that impact scheduling.
3. Enterprise Environmental Factors (EEFs)
• Government or industry standards
• Communication channels
4. Organizational Process Assets (OPAs)
• Scheduling Methodology:
Includes policies and procedures for schedule model development.
• Project Calendars:
Define working days and hours for scheduling.

COST ESTIMATION

⚫ Estimate Costs is the process of approximating the financial resources

required for project activities.
⚫ It Conducted periodically throughout the project lifecycle.
⚫ It Determines the monetary requirements for the entire project.
⚫ It Supports budget planning, funding decisions, and cost control.
⚫ Estimates are primarily expressed in currency units, but may also include
staff hours and equipment usage time.
⚫ Covers all project resources including labour, materials, equipment,
services, and contingency reserves.
⚫ Cost estimates can be prepared at the activity level or as a summarized high-
level view.

TECHNIQUES

• Expert Judgment: Input from individuals or groups with specialized

knowledge.
• Analogous Estimating: Using values from previous similar projects for
estimation.
• Parametric Estimating : Using statistical relationships between historical data
and other variables.
• Bottom-Up Estimating: Detailed estimation at the activity level, rolled up for
reporting.
• Three-Point Estimating : Using optimistic, pessimistic, and most likely
estimates for uncertainty.
• Data Analysis: Techniques like alternatives analysis and reserve analysis.
• Project Management Information System (PMIS) : Software and tools for
cost estimating.
• Decision Making : Techniques like voting to improve estimate accuracy and
commitment.

CONTROL COST

⚫ It Involves continuous monitoring of project costs throughout the project

duration.
⚫ Ensures the cost baseline is kept up-to-date.
⚫ Updates the budget based on actual costs incurred.
⚫ Any budget increase requires formal approval via the change control
process.
⚫ Manages cost changes and ensures they align with project goals.
⚫ Monitors cost performance against the approved cost baseline.
⚫ Aims to prevent cost overruns and keep them within acceptable limits.
⚫ Keeps stakeholders informed of approved changes and related costs.

TECHNIQUES
• Expert Judgment: Involves the use of variance analysis, earned value analysis,
forecasting, and financial analysis by experts to assess cost performance.
• Data Analysis : Includes Earned Value Analysis (EVA) to compare planned
value, earned value, and actual cost, and Variance Analysis to explain cost,
schedule, and variance at completion (VAC) variances.
• To-Complete Performance Index (TCPI) : Measures the cost performance
required to meet a specific management goal, expressed as the ratio of the cost to
finish outstanding work to the remaining budget.
• Project Management Information System (PMIS) : Used to monitor EVM
dimensions, display graphical trends, and forecast possible final project results.
EARNED VALUE MANAGEMENT (EVM)
⚫ Earned Value Management (EVM) is a project management technique used
to assess a project's performance and progress by integrating scope,
schedule, and cost measurements.
⚫ It provides a way to objectively measure into project health and make
informed decisions.
Benefits of Earned Value Management (EVM)

· Accurate Cost Control: Maps work to costs, turning unknowns into

measurable factors for better financial oversight.

· Performance Monitoring: Compares actual progress with the baseline to

detect deviations and manage critical paths.

· Informed Decision-Making: Provides data-driven insights for optimizing

scope, resources, and budget.

· Proactive Management: Enables early interventions to adjust scope, budget,

and resources as needed.

· Transparency & Accountability: Offers objective performance metrics,

enhancing stakeholder visibility and responsibility.

· Comprehensive Oversight: Delivers project- and portfolio-level insights to

support strategic alignment and resource prioritization.

• Planned Value (PV) / Budgeted Cost of Work Scheduled (BCWS):

The authorized budget for the work planned to be completed by a specific point in time
(the "status date").

• Earned Value (EV) / Budgeted Cost of Work Performed (BCWP):

The value of work actually completed up to the status date, as per the project plan.

• Actual Cost (AC) / Actual Cost of Work Performed (ACWP)

The total cost incurred for the work completed up to the status date.

Performance Indicator Calculator:

1. Cost Variance /CV = EV - AC: Indicates whether the project is under or

over budget at the status date
2. Schedule Variance (SV) = EV - PV : Indicates whether the project is ahead
of or behind schedule at the
3. Cost Performance Index (CPI) = EV / AC: Measures the cost efficiency of
work performed compared to
4. Schedule Performance Index (SPD) = EV / PV: Measures the schedule
efficiency of work performed

Example:
Project X has a budget at completion (BAC) of $50,000. After one month of work,
the project manager assesses the progress and determines that 30% of the work
has been completed. Calculate the Earned Value (EV).

Solution:
Earned Value (EV) = Percentage Complete (%) * Total Project Budget
(BAC)

EV = 0.30 (30%) * $50,000 = $15,000

The Earned Value for Project X after one month is $15,000.

Example:
Project Y has a budget at completion (BAC) of $200,000. At the end of the second
quarter, the project manager evaluates the project progress and finds that 60% of
the work has been completed. However, the actual costs incurred so far amount
to $120,000. Calculate the Cost Performance Index (CPI) and the Schedule
Performance Index (SPI).

Solution:
Cost Performance Index (CPI) = Earned Value (EV) / Actual Cost (AC)

CPI = $120,000 (EV) / $120,000 (AC) = 1

Schedule Performance Index (SPI) = Earned Value (EV) / Planned Value (PV)

SPI = $120,000 (EV) / $200,000 (BAC x Percentage of work scheduled

to be complete at this point)

SPI = $120,000 (EV) / $200,000 (0.60) = 0.60

The Cost Performance Index (CPI) is 1, indicating that the project is on budget.
The Schedule Performance Index (SPI) is 0.60, suggesting that the project is
behind schedule.
Example:
Project Z has a budget at completion (BAC) of $80,000. At the end of the project,
the project manager reviews the performance and finds that 90% of the work has
been completed. The actual costs incurred throughout the project amount to
$75,000. Calculate the Cost Variance (CV) and the Schedule Variance (SV).

Solution :

Cost Variance (CV) = Earned Value (EV) - Actual Cost (AC)

CV = $80,000 (0.90) - $75,000 = $72,000 - $75,000 = -$3,000

Schedule Variance (SV) = Earned Value (EV) - Planned Value (PV)

SV = $80,000 (0.90) - $80,000 = $72,000 - $80,000 = -$8,000

The Cost Variance (CV) is -$3,000, indicating that the project is over budget at
this point. The Schedule
Variance (SV) is -$8,000, suggesting that the project is behind schedule.