BSBPMG533 Manage project cost

Task 3 – Project: Manage costs within a project

Assessment Instructions
Assessment context In this assessment, you will determine project costs and budget for a
and overview conference as project officer for ‘Manager Networks’, the case study
organisation for this assessment.
There are two parts to this assessment task.
Your assessor will provide you with clear instructions.

Student Instructions You must:

• Complete all sections of this project, using the Task 3 Assessment
Templates.
There are two parts to Assessment Task
• Part 1: Cost Management Plan
o Update a WBS and Gantt chart (Excel Spreadsheet)
o Develop a Cost Management Plan (CMP)
o Request approval of CMP from Senior Manager
• Part 2: Cost Management and Control
o Develop a Cost Analysis Report
o Develop a Staff Cost Report
o Create a Cost Change Request
o Update Cost Management Plan
o Develop a Conference Finances Report including Lessons
Learned
All work is individual work.

Templates and You will need the following resources.

Resources required • Task 3 –Assessment Templates (in Moodle)
Business documents and resources (in Moodle)
1. Manager Networks - Conference Plan Brief
2. WBS and Gantt Chart – Excel spreadsheet
3. Manager Networks - Cost Management Policy and Procedures
4. OneDrive Instructional Document
For this assessment you may choose to use PMIS software: Assessment
and Project Management Tools and Technology
It is recommended that you use a Project Management Information
System (PMIS) while working on this project. A PMIS is typically a
software management system used to calculate schedules, costs and
expectations and most PMIS will automate and control project
management systems.
There are also a number of Excel templates online to assist in completing
assessments.

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 PMIS software can normally assist in:
• WBS Creation
• Gantt and scheduling activities
• Earned Value Management controls
• Quality control
• Calculating Functions
• Reporting
• Resource levelling
There are many off-the-shelf products, including Microsoft Project, as
well as free open-source products like ProjectLibre.
Other cloud-based solutions include (projectmanager.com,
smartsheet.com) are also available online by taking a 30-day free
subscription.
Discuss the options with your trainer.
If you choose not to use PMIS software, the templates for this project are
available in the Assessment Templates and Required Assessment
Resources folder in Moodle.

Instructions for 1. Download all assessment documents.

assessment 2. Fill in your name and student number, and answer all questions in
submission the Assessment Templates.
3. When finished, click the Add submission button below.
4. *You must submit assessments by the due date.
* If you need to make any corrections or re-submissions you must
do this within six weeks.
5. Tick the I understand and agree declaration box.
6. Drag and drop your document(s) to the File submissions box.
7. Click the Save changes button.
8. You will receive an email confirming your assessment has been
submitted.

Privacy Declaration: The college receives your assessment for marking and moderation only. It
will be treated confidentially, and only authorised college officers will
have access to it. No access will be provided to any other person without
your consent, or unless authorised by law.

Managing document development

You will be required to manage document development and version control during the assessment.
• How to document version control

If you have any queries regarding any of the platforms, talk to your trainer.

TIP!: Learn how to upload and share documents using OneDrive

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Scenario introduction
Refer also to Conference Plan Brief

You are the new project officer for ‘Manager Networks’, an organisation that provides
networking events for businesspeople across Australia.
You will be reporting to project stakeholders, CEO Richard Green, and senior manager Regina
Barlow. Regina Barlow has requested that you include her in all project and stakeholder team
meetings.
As you have not worked in the events industry before, Juan Castello, who has 10 years’
experience as a marketing coordinator and works as external consultant, will provide you with
guidance and will attend your first project and stakeholder meeting.
You have authority to manage the costs and budget for this project. However, you will be
working closely with the senior manager, Regina Barlow, to provide project updates and seek
approval of your cost management plan and budget.

Your first project – Annual Leadership Conference

Your first project is an annual conference event with a key focus on business leadership. The
project commenced 12 weeks ago but is now running behind. You have several tasks to
complete in a shorter timeframe, including booking the conference venue and working out the
budget and cost estimates. You will be working with the events co-ordinator, who will look after
speaker availability.
Initially, the project had a 6-month timeline, with the conference date 23rd November 20XX
(current year). However, you will be commencing the project on Monday 10th September 20XX
(current year). The project timeline is now 12 weeks, which includes a week to wrap up after the
conference.
The CEO Richard Green has requested that you remodel and rework all project documentation.
He has instructed you to finalise scheduling before completing the project cost plan, budgets,
and estimates.
He has supplied you with:
• Conference Plan Brief
• an extracted work breakdown structure (WBS) and incomplete Gantt chart - WBS and
Gantt – Excel spreadsheet
• Cost Management Policy and Procedures

He has also provided the following information on the leadership conference:

Venue: The proposed venue has not yet been confirmed but was quoted at $45,000 for 2 days:
• Day 1 - set up
• Day 2 - conference
Conference catering: should be on-site and include a high-quality morning tea, lunch and
afternoon tea.
Sponsorship: Marketing has secured the following sponsorship:
• Presenting Platinum Sponsor $100,000.
• 2 Gold sponsors at $25,000.
• 5 Silver sponsors at $9000.

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 • 20 Bronze sponsors at $2000.
CEO Richard Green has requested a maximum of 25% of current income to be used to plan the
conference in case sponsors withdraw.
Delegates: There are currently:
• 100 tentative company delegates attending at $1250 per head.
• 15 individual bookings at $1500 per head.
Speakers: the event coordinator is currently confirming the following speakers:
• Speaker A is from Melbourne.
• Speakers B, C and D are from Sydney.
• Speaker E is from the United Kingdom.

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Project activities and directions
This project is divided into two parts:
Part 1: Cost management plan
Part 2: Cost monitoring and control

Part 1: Cost management plan

In Part 1, you will determine project resources by researching and documenting costs for
Manager Networks annual conference project. You will participate in a meeting with project
stakeholders to seek input on resource costs, and develop a cost management plan that
includes a project budget.

Steps:

1. Examine the following information to help you understand the project resource
requirements, and to develop preliminary cost estimates and budget in the following
steps. You will need this information to participate in a project and stakeholder team
meeting in Step 3.
• Case Study Scenario Introduction above.
• Conference Plan Brief in the Required Assessment Resources folder in Moodle.

2. Access the incomplete WBS and Gantt chart in the Excel Spreadsheet located in the
Required Assessment Resources folder in Moodle and save it to your OneDrive (you will
need to use OneDrive to share the spreadsheet with you trainer later). This is the work
breakdown structure document you will complete in Step 4 once you have identified
resource requirements for individual tasks with stakeholders in the upcoming meeting.

3. Project and stakeholder team meeting: Observation Assessment

This is your observation assessment. Your performance will be assessed by your trainer
according to the observation criteria. See the separate instructions and observation
criteria for Task 4 – Observation in Moodle.
In the role of project officer for Manager Networks, you will participate in a project
meeting to determine resource requirements for individual tasks in the (WBS) Work
Breakdown Structure for the project.
− Before the meeting
o your trainer will assist you to schedule the meeting with at least two other class
members who represent project stakeholders.
o ensure you are familiar with the project requirements before commencing the
meeting.
− During the meeting
o share cost and budget information with others, taking a lead role on occasions
to identify resource requirements for individual tasks in the (WBS) Work
Breakdown Structure.

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 o consult with others during the meeting by asking questions and actively
listening to responses.
− After the meeting
o complete Step 4

4. Once you have identified resource requirements for individual tasks with stakeholders,
update the incomplete WBS and Gantt chart in the Excel Spreadsheet. Make sure the
dates are correct.
• Your WBS and Gantt Chart also forms part of your Cost Management Plan which you
will develop in Step 5.
• You have the option of using the WBS and Gantt Chart Excel Spreadsheet for this task
or recreating the WBS and Gantt Chart using your chosen PMIS Software system.
*Speak to your trainer about using a PMIS system and how to submit for marking.

5. Review the Conference Plan Brief and develop a Cost Management Plan in the
Assessment Templates.
Include the following in your Cost Management Plan template:
a. Purpose:
• Describe the purpose of the Cost Management Plan for Manager Networks
conference project (about 40 words).
b. Resource requirements:
• Include the major resource requirements you identified in the meeting to assist
with cost estimation and consider agreed tolerances according to information in
the conference plan brief (about 30 words).
c. Potential causes of increases in costs:
• Describe at least three (3) factors that need to be considered that would increase
costs (about 40 words).
d. Project cost control procedures:
• Describe cost control management processes that will be followed and include
approval requirements. Consider the control methods will need to put in place
and what units of measure you are using regarding costs (about 40 -50 words).
e. Cost change control process:
• Outline the requirements for the cost change control process (about 100-140
words) .
f. Performance measurement:
• Outline the rules you will use to measure performance (about 80 words).
g. Cost reporting and format:
• Explain in detail how you be reporting on project costs (about 180 words).
h. Estimating costs:
• Detail the process you will use to estimate costs (about 120 words).
i. Resource requirements and estimated costs:
• Estimate the resource requirements and all major project costs using the table.
Estimate costs using a Three Point Estimate technique and provide either a top-
down or bottom-up approach for developing the budget according to Manager
Networks policy and procedures.

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 Please note: When estimating costs, you will find some information in the Conference
Plan Brief. For all other cost estimates, you will need to source information online.
j. Developing budget:
• Which approach will you use; a top-down or bottom-up method (about 80
words)?
• Include a flow chart to show a top-down or bottom-up budget approach.
k. Project Budget:
• Develop a budget of project costs and project income according to agreed
tolerances using the table in the Cost Management Plan template. If you are
using PMIS software to create the budget, notify your trainer and include a link to
the budget in the template.

6. Request feedback on your CMP and Budget:

• Ask your trainer who represents the senior manager of ‘Manager Networks’, to check
and approve your Cost Management Plan and Budget.
• Use OneDrive to share the document with your trainer and include a message
requesting approval. Refer to the OneDrive instructional document in the Required
Assessment Resources folder if you need help using OneDrive.
• Take a screenshot of your approval request to the senior manager and add to the
image to the space in the Assessment Templates.
• If approval is not given the first time, your trainer, representing your senior manager,
will provide you with feedback to incorporate into your CMP and budget. You will
need to update the plan and request approval again. Ensure you update the
document development table and version control each time you update the CMP and
budget.

7. Once approved, complete the document development table in the Cost Management Plan
with the date of approval. If you are using PMIS software to develop the plan, the
template must be replaced, but you must include all the template criteria. You will
continue to update your Cost Management Plan and Budget in Part 2.

IMPORTANT: Check you have completed the following for Part 1:

 Project and stakeholder team meeting - Observation assessment

 WBS and Gantt Chart (Excel Spreadsheet)
 Cost Management Plan (including budget)
 CMP and budget approval request
 Document Development table update (including version control and approval date)

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Part 2: Cost monitoring and control
In Part 2, you will monitor and control project costs, manage a cost change request and report
on cost management issues.

Scenario update:
You are six weeks into the project. Budgeted costs for the conference were finalised according
to your budgeted expenses.
You receive the following information:
1. The first choice of venue is now unavailable on the day you require.
2. The second-choice venue costs are an additional $5000.
3. Speaker B has just cancelled and is no longer available. The only other speaker available
has advised his fees are $3500. This is higher than the allocated $2000 per speaker.

Hours accrued table

Peggy Lee, from Human Resources, has reported the project hours accrued from 10th September
20XX to 20th October 20XX (20XX represents the current year):

Hours Hourly
Name Title E mail
Accrued Pate

Richard
CEO r.green@mnetworks.com 5 N/A
Green

Regina Senior Manager/Project

r.barlow@mnetworks.com 3 $110.00
Barlow Sponsor

Student
Project Manager yourname@metworks.com 60 $75.00
Name

Simon
Finance Manager s.stokes@mnetworks.com 0 $110.00
Stokes

Human Resources
Peggy Lee P.lee@mnetworks.com 5 S110.00
Manager

Jenny
Admin Assistant j.Quan@mnetworks.com 15 $30.00
Quan

Part time Events

Juan
Coordinator and j.costello@mnetworks.com 50 $34.00
Castello
External Consultant

4 Casual
4 x Casual Event Staff Event.staff@mnetworks.com On file $25.00
Event Staff

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Steps:

1. Based on the information above, develop a Cost Analysis Report in the Assessment
Templates. Update the expenses table, determine current project costs and calculate any
cost variations. The report must include:
a. Project costs to date (about 100 words).
b. Planned costs to actual costs (update the table)
c. Analysis of variations to projected costs (about 50 words).
d. Actions required (about 50 words).

2. Using the project hours incurred in the table above and your WBS and Gantt Chart,
calculate the costs of human resources, and report on estimates of total costs to be
incurred. Develop a Staff Cost Report in the Assessment Templates (about 150 words).

3. Arrange a time to discuss your Cost Analysis Report and Staff Cost Report with your
trainer, who represents the senior manager, Regina Barlow, in a simulated work
environment. Add any recommended changes and finalise your report according to the
feedback. Update the Document Development table in the template with the details of
the trainer’s feedback.

4. You receive the following email request from the marketing manager. The email reads:
Dear Project Officer
I recently attended a conference that included a comedian and singer. I felt this type of
entertainment made the conference much more interesting and memorable. I would like
to incorporate this into our program. I have made some enquiries and found two suitable
entertainers. This would involve an additional cost of $4,000, which I am hoping can be
accommodated.
Regards
Marketing Manager

5. Following the request from the manager in the email above, analyse possible alternatives
and adjust the costs from figures in the Cost Management Plan developed in Part 1.
• Make a change request using the Cost Change Request Form in the Assessment
Templates. Include the reason for the change and your recommendation after
analysing costs. As the project officer, you have the authority to approve the extra
costs, however you must follow Manager Networks procedures and complete a
change request. Include:
o Scope change description: What is the additional cost of conference
entertainment being considered (about 20 words)? Include the current cost
baseline.
o Business, client and end user benefit summary: outline at least one key benefit
to the business of making the scope change (about 40-80 words).
o Benefits to the client and/or end user: Outline at least one key benefit to the
client or end user/customer of making the scope change (about 40-80 words).
o Implications of not making the change summary: Outline at least one key risk to
the project of not making the scope change (about 40-80 words).

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 o Impact analysis to the project: Address whether the change of scope is expected
to have an impact on the project and include a rationale (about 40 words).

6. Following company protocols, you receive confirmation from the senior manager, Regina
Barlow for your change of costs.
• Now, update the costs in the Cost Management Plan. Complete the version control
table and update the Document Development table with the reason for the update.

Scenario update:
The conference is now over, and you have received the final costs. Review the information
provided, to calculate and report on the success of the conference and if a 50% profit was made.
The senior manager has identified that while the conference had a positive outcome, they
would like further recommendations on best practice project cost estimating.

7. Based on the information above, develop a Conference Finances Report in the

Assessment Templates. As you have used Excel or PMIS to record to costs throughout the
project, the final report will include EVM and other processes.
o Introduction: Update the expenditure details showing the overall financial outcomes
from the conference (about 20 words).
o Evaluation: Establish the project goal and determine the actual outcome (about 20
words). Update the conference expenditure details using the table.
o Lessons learned: Document lessons learned from any mistakes and/or successes
during the project life cycle (about 40 words).
o Recommendations: Include at least (4) four recommendations to improve the
process of estimating costs for future projects (about 60-80 words).

IMPORTANT: Check you have completed the following for Part 2.

 Cost Analysis Report

 Staff Cost Report
 Cost Change Request Form
 Cost Management Plan (update final document version)
 Conference Finances Report (including Lessons Learned)

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