In a project management, the cost handling or cost management is a most essential part on which the tangibility of the project plan depends. Cost management emphasize the cost estimation for the components of a project plan comparing their actual implementation price and the previous budget plan for the project (Lloyd-Walker & Walker, 2015). In it project management the cost management can be initially segregated into three separate phases, namely development cost, implementation cost and maintenance cost. The development cost refers the cost for developing the project plan that includes the remuneration of developers, platform cost for testing and other. In the Implementation phase the major cost management is distributed within the installation cost, initiation cost, transmission cost and other cost related to the IT project initiation. At the last and third phase is a long term costing phase that is involved in maintenance cost of the installed system and hardware including fault detection, finding solution, repairing, post-testing and others (Harrison & Lock, 2017). There are two major technical aspects of the cost management process of any IT project management namely Process and Software.
Process of managing IT project cost can be subdivided into three sequential procedures namely cost estimation, budget determination and the spending control. Cost estimation is the most primitive cost management process where the financial department estimated the required cost for purchasing all essential services, software, and hardware to deliver the project efficiently (Baily, 2017). In this section, the project manager uses project cost management software to design the spreadsheet for the calculation and estimation purpose. In Budget determination step the respondents of cost management analyse the market price of the require products and services and enlisted them into the respective fields and records made in the cost estimation stage. It is a collaborative work within the financial department, project manager and IT department. The seeding control is the most tangible cost management process that depends on the practical implementation of the budget planning and cash out-flow for the project management (Crawford, 2014). In this process the amount of spending money in each process of procurement is tracked and controlled to reduce the waste of money and violation of budget plan as decided earlier.
Without the help of cost management software, managing the costs as well as determining the budget of the practically is practically impossible. The above mentioned software takes the control of the process, establish active collaboration with the project team and finally communicate the result to the project stakeholders. The functionality of the cost management software are as follows:
Risk management is identified as a term that is utilized in order to describe the overall procedure whereby organizations can effectively distinguish hazards, challenges and risk factors which exhibit the propensity to pose threats such as hazard identification, effectively assessing and analyzing forms of risks being related with the process of hazard investigation as well as risk assessment and further effectively establish suitable methods in order to successfully eradicate certain hazardous situations or regulate the level of threat or any unconstructive possibility when such menaces cannot be successfully removed (Techniques & Management, 2018). Risk management is further regarded as a major project management practice which purposes to ascertain that minimum rate of risks or unexpected situations are occurring during the execution of any project (Saylor.org, 2018). As organizations often exhibit high level of incompetence to anticipate prospective situations with utmost certainty, those organizations can purposefully implement an undemanding, efficient and streamlined risk management procedure in order to forecast the level of uncertainties in the execution of project and further reduce the level of occurrence and effect of such reservations (Vovchenko et al., 2017). Thus the role of risk management process primarily lie on enhancing the probability of achievable project and decrease the rate of consequences of those forms of risks (Saylor.org, 2018).
The risk management framework followed by Apple Inc essentially provides guidelines for
The role of risk management to categorize and prioritize hazards is considered to a vital way of determining the nature of risk or organizational threat and the level of danger it will cause (Vovchenko et al., 2017). Prioritizing risks is often being established by taking into consideration the level of employee revelation as well as the prospective of the incident, harm or infirmity. Thus through effective transmission of the precedence of risks, organizations tend to create a position or an action list (Saylor.org, 2018). Role management process aids the Project Team to identify all of the potential risks and hazards which might expose the level of achievements of the projects (Techniques & Management, 2018). It is important to observe that effective risk management process fundamentally implies the regulation of potential prospective organizational events and tends to act proactive instead of being mechanical or involuntary.
For instance, a particular activity in a network in a network habitually necessitates an advanced technical expertise which needs to be effectively developed. The schedule however signifies duration of 6 months for the execution of this specific activity which the technical expertise opposes (Vovchenko et al., 2017). If the project manager possesses high level of dedication and practicality, the project team can efficiently deliver a contingency plan and further develop effective resolutions to the hazard prior to the deadline. However, if the project manager exhibits greater level of reactivity that will led the team not to take any step until the occurrence of any risk (Techniques & Management, 2018). The project is anticipated to advance towards its scheduled timeline, resulting to several tasks to remain incomplete leading the manager to act highly responsive to the crisis further causing the team to lose valuable time and effort.
Strategies for successfully addressing an identified risk primarily includes,
Contract processing in procurement management can be defined as the process that supports the contract and consumer life cycle and contributes, creates as well as utilizes contract data. By managing obligations in an effective order, contract management saves the significant time as well as effort along with providing benefit in terms of business strategies and procedures. The mentioned processing dictates each and every aspect of key business strategies and relationship in procurement management (Masterman & Masterman, 2013). A good number of contractual parties invest a considerable amount of time and resources to conclude contracts that serve their specific interest.
After the finalization of a contract and procurement of the services, in several cases, parties often fail to monitor and fulfill the contractual obligations. Failure to meet the obligation results in heavy fines, costly, litigation and broken relationship. All these consequences impose negative impact on both the revenue of the organization as well as the public benefits. With the help of an effective contract processing these issues can easily be eradicated. The procurement management plan details how the procurement process will be managed (Monczka et al. 2015). The procurement plan for contract processing includes, the type of contracts to be used, the delivery date of the products for which the contracting is done, the standard document of the company used for contracting and the number of vendors or contractors involved in the contracting process. It is highly crucial for an organization to select an appropriate type of contract for a successful procurement processing. Contracts can be segregated into two types namely, the cost reimbursement contracts and the fixed price contracts. While the fixed price contracts can be defined as the legal agreement between the project organization and an entity that provides products and services to the project at an agreed-on price, the cost reimbursement contract involves paying the contractors for performing the service.
Contracting process steps includes developing a procurement plan after the decision of purchasing the product or outsourcing the services has been made. The contract processing involves the following steps:
Communication planning process primarily focuses on defining forms of information organization delivers, which will attain the information, the structure for communicating it as well as its timing of its release and allocation (Marchewka, 2014). It has been noted that around 90% of a task assigned to a project manager is executed on communication process thus it is essentially important for everyone to receive accurate information at the right time. Performance reporting is identified as a vital activity in project communication management which incorporates collecting and propagating project information, communicating project development, resources implementation along with forecasting prospective growth and status to wide range of stakeholders. It is important to note that during the process of performance reporting, the task outcomes generated from other processes are further evaluates and amalgamated into performance reports (Project Times, 2018). These reports are usually executed in tabular, statistical or graphical formats which may be shown either as text or visual based or at certain times a successful compilation of both (Masterman & Masterman, 2013). In business perspective, performance reports are considered to be evaluation of performance to the project performance baseline and thus involves
Status report- Project managers can generate status assessment or report every week or on a monthly basis and on certain projects, managers can generate daily reports at the time of implementation period. The level of frequency of status reports relies on the status of the project and the stage it is currently present. Project managers can create generalized status report template or can further utilize the ones within tend to emerge with their project management software (Kaiser et al., 2015). A status report generation system for a project management program will not be executed appropriately without the utilization of appropriate software. This software let the project manager to take control over the entire project management plan including the cost estimation part involving management tree, Gantt chart and other templates and software equipments and tools (Project Times, 2018).
Risk reports- These reports on the other hand are typically produced monthly and is often identified as the relevant result post risk evaluation meeting. Risk reports on the contrary to status report tend to focus on facts related to potential risks to raise complexities for the anticipated project. As an example, in an IT project procurement plan a project manager must estimate the possible outcomes after the procurement and installation of new system (Marchewka, 2014). This risk assessment involves the software or hard ware failure, communication disturbance, diverted goals and others (Project Times, 2018). This risk report helps the project manager and other respondents to formulate an appropriate solution for risk free implementation that includes the amendment of communication plan, aim setup, budget plan, time allocation and other essential alterations (Masterman & Masterman, 2013).
Resource report-Major proportion of software equipments whether the Gantt chart software of entirely equipped project mechanisms with highly incorporated timesheet, project managers will attain the option to generate resource reporting (Marchewka, 2014). As Resource reporting will reveal the framework of team distribution and focuses on allocation issues, it is considered to be more efficient and useful than other two reporting (Kaiser et al., 2015). Though it cannot work on two things simultaneously, it is necessary to utilize resource reporting to guarantee project managers have rescheduled those tasks. Resource reporting are thus identified as the most efficient forms of project reports for a project manager to implement successfully. Though unlike other project reporting, resource reporting can be challenging to properly comprehend at the initial stage (Masterman & Masterman, 2013).
References
Apple – Annual Report. (2018). Apple – Annual Report. Retrieved from https://investor.apple.com/secfiling.cfm?filingid=1193125-11-282113&cik=
Baily, P. (2017). Procurement. In Contracting for Project Management (pp. 105-116). Routledge.
Crawford, J. K. (2014). Project management maturity model. Auerbach Publications.
Dumas, M., La Rosa, M., Mendling, J., & Reijers, H. A. (2013). Fundamentals of business process management (Vol. 1, p. 2). Heidelberg: Springer.
Harris, F., & McCaffer, R. (2013). Modern construction management. John Wiley & Sons.
Harrison, F., & Lock, D. (2017). Advanced project management: a structured approach. Routledge.
Kaiser, M. G., El Arbi, F., & Ahlemann, F. (2015). Successful project portfolio management beyond project selection techniques: Understanding the role of structural alignment. International Journal of Project Management, 33(1), 126-139.
Lloyd-Walker, B., & Walker, D. (2015, April). Collaborative project procurement arrangements. Project Management Institute.
Marchewka, J. T. (2014). Information technology project management. John Wiley & Sons.
Masterman, J., & Masterman, J. W. (2013). An introduction to building procurement systems. Routledge.
Masterman, J., & Masterman, J. W. (2013). An introduction to building procurement systems. Routledge.
Monczka, R. M., Handfield, R. B., Giunipero, L. C., & Patterson, J. L. (2015). Purchasing and supply chain management. Cengage Learning.
Project Times. (2018). Top 10 Leadership Qualities of a Project Manager. Retrieved from https://www.projecttimes.com/articles/top-10-leadership-qualities-of-a-project-manager.html
Roehrich, J., & Lewis, M. (2014). Procuring complex performance: Implications for exchange governance complexity. International Journal of Operations & Production Management, 34(2), 221-241.
Saylor.org. (2018). Retrieved from https://www.saylor.org/site/textbooks/Project%20Management%20-%20From%20Simple%20to%20Complex.pdf
Techniques, P., & Management, R. (2018). Project Risk Management Basics. Retrieved from https://www.project-management-skills.com/project-risk-management.html
Vovchenko, G. N., Holina, G. M., Orobinskiy, S. A., & Sichev, A. R. (2017). Ensuring financial stability of companies on the basis of international experience in construction of risks maps, internal control and audit. European Research Studies Journal, 20(1), 350-368.
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