Cost build up estimation in projects - Revision history

S230214: /* Challenges in cost estimation management and areas for improvement */

2023-05-09T19:07:06Z

Challenges in cost estimation management and areas for improvement

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	=Challenges in ~~cost estimation management~~ and ~~areas~~ for ~~improvement~~=		=Challenges in Cost Estimation Management and Areas for Improvement=

	There are many things that could be done better to make estimation more effective in cost management, but there are many challenges and weaknesses that need to be addressed to make current cost estimation techniques and methods more effective. Also, the understanding of the relationship between customer satisfaction and costs is critical to tracing the origins of customer-level profitability as the need for businesses to become more customer-centric increases. The aforementioned factors and techniques are mainly related to management tools, and little attention has been paid to human communication, either that means communication with the customer or communication of the associated members. Cost modeling still has room for improvement in terms of accuracy and joint cost modeling. In the challenges that will be mentioned below, the complexity, the amount of information, uncertainty, predetermination, human factors, and the other factors play an important role.		There are many things that could be done better to make estimation more effective in cost management, but there are many challenges and weaknesses that need to be addressed to make current cost estimation techniques and methods more effective. Also, the understanding of the relationship between customer satisfaction and costs is critical to tracing the origins of customer-level profitability as the need for businesses to become more customer-centric increases. The aforementioned factors and techniques are mainly related to management tools, and little attention has been paid to human communication, either that means communication with the customer or communication of the associated members. Cost modeling still has room for improvement in terms of accuracy and joint cost modeling. In the challenges that will be mentioned below, the complexity, the amount of information, uncertainty, predetermination, human factors, and the other factors play an important role.

S230214: /* Cost estimation Overview */

2023-05-09T19:05:51Z

Cost estimation Overview

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	[[File:NEW Cost management through the project lifecycle.png\|700px\|thumb\|center\|Figure 1: Cost management through the project lifecycle]]		[[File:NEW Cost management through the project lifecycle.png\|700px\|thumb\|center\|Figure 1: Cost management through the project lifecycle]]

	=Cost ~~estimation~~ Overview=		=Cost Estimation Overview=

	Cost estimating involves developing an approximation (estimate) of the costs of the resources needed to complete project activities. It is a prediction that is based on the information known at a given point in time. Cost estimates include the dentification and consideration of costing alternatives to initiate and complete the project. Cost trade-offs and risks should be considered, such as make versus buy, buy versus lease, and the sharing of resources in order to achieve optimal costs for the project. The key benefit of this process is that it determines the monetary resources required for the project. This process is performed periodically throughout the project as needed.		Cost estimating involves developing an approximation (estimate) of the costs of the resources needed to complete project activities. It is a prediction that is based on the information known at a given point in time. Cost estimates include the dentification and consideration of costing alternatives to initiate and complete the project. Cost trade-offs and risks should be considered, such as make versus buy, buy versus lease, and the sharing of resources in order to achieve optimal costs for the project. The key benefit of this process is that it determines the monetary resources required for the project. This process is performed periodically throughout the project as needed.

S230214: /* Annotated Bibliography */

2023-05-09T19:04:10Z

Annotated Bibliography

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	=Annotated Bibliography=		=Annotated Bibliography=

	~~'''Project Management Institute, 2017, A Guide to the PROJECT MANAGEMENT BODY OF KNOWLEDGE, (PMBOK® GUIDE) Sixth Edition.'''~~

	The PMBOK® Guide provides more detail about key concepts, emerging trends, considerations for tailoring the project management processes, and information on how tools and techniques are applied to projects. Project managers may use one or more methodologies to implement the project management processes outlined in the standard.


	'''Partha P. Datta a, Rajkumar Roy, Available online: August 2010, Cost modelling techniques for availability type service support contracts:A literature review and empirical study.'''		'''Partha P. Datta a, Rajkumar Roy, Available online: August 2010, Cost modelling techniques for availability type service support contracts:A literature review and empirical study.'''
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	The research in this paper is focused on enhancing existing knowledge in cost estimation models for availability type support service contracts that focus on equipment availability targets and predefined service levels.The difficulty of this task lies in properly estimating the costs of activities during the long lasting contracts, which in some cases may reach even several decades.		The research in this paper is focused on enhancing existing knowledge in cost estimation models for availability type support service contracts that focus on equipment availability targets and predefined service levels.The difficulty of this task lies in properly estimating the costs of activities during the long lasting contracts, which in some cases may reach even several decades.

			'''Project Management Institute, 2017, A Guide to the PROJECT MANAGEMENT BODY OF KNOWLEDGE, (PMBOK® GUIDE) Sixth Edition.'''

			The PMBOK® Guide provides more detail about key concepts, emerging trends, considerations for tailoring the project management processes, and information on how tools and techniques are applied to projects. Project managers may use one or more methodologies to implement the project management processes outlined in the standard.

	'''Olav Torp and Ole Jonny Klakegg, October 2016, Challenges in Cost Estimation under Uncertainty-A Case Study of the Decommissioning of Barsebäck Nuclear Power Plant, Department of Civil and Transport Engineering, Norwegian University of Science and Technology, Trondheim 7491, Norway.'''		'''Olav Torp and Ole Jonny Klakegg, October 2016, Challenges in Cost Estimation under Uncertainty-A Case Study of the Decommissioning of Barsebäck Nuclear Power Plant, Department of Civil and Transport Engineering, Norwegian University of Science and Technology, Trondheim 7491, Norway.'''

S230214: /* Annotated Bibliography */

2023-05-09T19:03:32Z

Annotated Bibliography

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	This paper look into some challenges with the practice in cost estimation processes and identify possible improvements to overcome them. The purpose of this paper is to illustrate better solutions to some of the major weaknesses identified in current cost estimation practice.		This paper look into some challenges with the practice in cost estimation processes and identify possible improvements to overcome them. The purpose of this paper is to illustrate better solutions to some of the major weaknesses identified in current cost estimation practice.

			'''Jaakko Kujala, Tim Brady & Jaakko Putila, October 2014, Challenges of Cost Management in Complex Projects. International Journal of Business and Management, Vol. 9, No. 11.'''

	~~'''M W Fazil~~, ~~C K Lee~~ and ~~P F M Tamyez, 2022, The moderating effect~~ of ~~project~~ complexity ~~on the relationship between organizational controls and cost estimation performance: A conceptual model~~.~~'''~~		This paper, is build on existing research on complex products and systems (CoPS) to address the challenges of managing costs in projects of varying complexity. Based on a qualitative case study, several challenges identified in performing various cost management functions related to cost estimation, cost control and monitoring, revenue recognition, profitability analysis and margin calculation.

	~~This paper quotes that while many prior studies~~ on cost ~~estimation emphasized investigating cost estimation methods~~ to ~~improve the performance of~~ cost estimation, ~~less attention was given to organizational and project factors. Several studies have explored the effects of organizational~~ control ~~on performance but failed to include project complexity in the relationship between organizational controls~~ and ~~performance. Therefore~~, ~~this paper conceptualizes the effect of organizational controls on cost estimation performance with project complexity as a moderator~~.

	=References=		=References=

S230214: /* Annotated Bibliography */

2023-05-09T18:56:24Z

Annotated Bibliography

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	This paper look into some challenges with the practice in cost estimation processes and identify possible improvements to overcome them. The purpose of this paper is to illustrate better solutions to some of the major weaknesses identified in current cost estimation practice.		This paper look into some challenges with the practice in cost estimation processes and identify possible improvements to overcome them. The purpose of this paper is to illustrate better solutions to some of the major weaknesses identified in current cost estimation practice.


			'''M W Fazil, C K Lee and P F M Tamyez, 2022, The moderating effect of project complexity on the relationship between organizational controls and cost estimation performance: A conceptual model.'''

			This paper quotes that while many prior studies on cost estimation emphasized investigating cost estimation methods to improve the performance of cost estimation, less attention was given to organizational and project factors. Several studies have explored the effects of organizational control on performance but failed to include project complexity in the relationship between organizational controls and performance. Therefore, this paper conceptualizes the effect of organizational controls on cost estimation performance with project complexity as a moderator.

	=References=		=References=

S230214: /* Annotated Bibliography */

2023-05-09T18:50:34Z

Annotated Bibliography

← Older revision		Revision as of 18:50, 9 May 2023
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	'''Project Management Institute, 2017, A Guide to the PROJECT MANAGEMENT BODY OF KNOWLEDGE, (PMBOK® GUIDE) Sixth Edition.'''		'''Project Management Institute, 2017, A Guide to the PROJECT MANAGEMENT BODY OF KNOWLEDGE, (PMBOK® GUIDE) Sixth Edition.'''

	The PMBOK® Guide provides more detail about key concepts, emerging trends, considerations for tailoring the project		The PMBOK® Guide provides more detail about key concepts, emerging trends, considerations for tailoring the project management processes, and information on how tools and techniques are applied to projects. Project managers may use one or more methodologies to implement the project management processes outlined in the standard.
	management processes, and information on how tools and techniques are applied to projects. Project managers may
	use one or more methodologies to implement the project management processes outlined in the standard.

	'''Partha P. Datta a, Rajkumar Roy, Available online: August 2010, Cost modelling techniques for availability type service support contracts:A literature review and empirical study.'''		'''Partha P. Datta a, Rajkumar Roy, Available online: August 2010, Cost modelling techniques for availability type service support contracts:A literature review and empirical study.'''

	The research in this paper is focused on enhancing existing knowledge in cost estimation models for availability type		The research in this paper is focused on enhancing existing knowledge in cost estimation models for availability type support service contracts that focus on equipment availability targets and predefined service levels.The difficulty of this task lies in properly estimating the costs of activities during the long lasting contracts, which in some cases may reach even several decades.
	support service contracts that focus on equipment availability targets and predefined service levels.The difficulty
	of this task lies in properly estimating the costs of activities during the long lasting contracts, which in
	some cases may reach even several decades.		'''Olav Torp and Ole Jonny Klakegg, October 2016, Challenges in Cost Estimation under Uncertainty-A Case Study of the Decommissioning of Barsebäck Nuclear Power Plant, Department of Civil and Transport Engineering, Norwegian University of Science and Technology, Trondheim 7491, Norway.'''

			This paper look into some challenges with the practice in cost estimation processes and identify possible improvements to overcome them. The purpose of this paper is to illustrate better solutions to some of the major weaknesses identified in current cost estimation practice.

	=References=		=References=

S230214: /* Annotated Bibliography */

2023-05-09T18:47:28Z

Annotated Bibliography

← Older revision		Revision as of 18:47, 9 May 2023
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	management processes, and information on how tools and techniques are applied to projects. Project managers may		management processes, and information on how tools and techniques are applied to projects. Project managers may
	use one or more methodologies to implement the project management processes outlined in the standard.		use one or more methodologies to implement the project management processes outlined in the standard.

			'''Partha P. Datta a, Rajkumar Roy, Available online: August 2010, Cost modelling techniques for availability type service support contracts:A literature review and empirical study.'''

			The research in this paper is focused on enhancing existing knowledge in cost estimation models for availability type
			support service contracts that focus on equipment availability targets and predefined service levels.The difficulty
			of this task lies in properly estimating the costs of activities during the long lasting contracts, which in
			some cases may reach even several decades.

	=References=		=References=

S230214 at 18:43, 9 May 2023

2023-05-09T18:43:46Z

← Older revision		Revision as of 18:43, 9 May 2023
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	Nevertheless, there are challenges and there is plenty of opportunity for improvement in cost estimation management. These include addressing weaknesses in current techniques and methods, improving the accuracy of cost modeling, and considering human communication when estimating projects. Furthermore, achieving customer-centric profitability depends on a knowledge of the link between expenses and customer pleasure.		Nevertheless, there are challenges and there is plenty of opportunity for improvement in cost estimation management. These include addressing weaknesses in current techniques and methods, improving the accuracy of cost modeling, and considering human communication when estimating projects. Furthermore, achieving customer-centric profitability depends on a knowledge of the link between expenses and customer pleasure.
	Overall, accurate cost estimating is essential for project managers to make informed decisions, complete projects efficiently, and prevent cost overruns. Project managers can improve the accuracy of cost estimates and ensure successful project cost management by considering all factors affecting cost build-up and using the right estimating strategies.		Overall, accurate cost estimating is essential for project managers to make informed decisions, complete projects efficiently, and prevent cost overruns. Project managers can improve the accuracy of cost estimates and ensure successful project cost management by considering all factors affecting cost build-up and using the right estimating strategies.

			=Annotated Bibliography=

			'''Project Management Institute, 2017, A Guide to the PROJECT MANAGEMENT BODY OF KNOWLEDGE, (PMBOK® GUIDE) Sixth Edition.'''

			The PMBOK® Guide provides more detail about key concepts, emerging trends, considerations for tailoring the project
			management processes, and information on how tools and techniques are applied to projects. Project managers may
			use one or more methodologies to implement the project management processes outlined in the standard.

	=References=		=References=

S230214: /* Challenges in cost estimation management and areas of implementation */

2023-05-09T17:57:59Z

Challenges in cost estimation management and areas of implementation

← Older revision		Revision as of 17:57, 9 May 2023
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	[2],[4]		[2],[4]

	=Challenges in cost estimation management and areas ~~of implementation~~=		=Challenges in cost estimation management and areas for improvement=

	There are many things that could be done better to make estimation more effective in cost management, but there are many challenges and weaknesses that need to be addressed to make current cost estimation techniques and methods more effective. Also, the understanding of the relationship between customer satisfaction and costs is critical to tracing the origins of customer-level profitability as the need for businesses to become more customer-centric increases. The aforementioned factors and techniques are mainly related to management tools, and little attention has been paid to human communication, either that means communication with the customer or communication of the associated members. Cost modeling still has room for improvement in terms of accuracy and joint cost modeling. In the challenges that will be mentioned below, the complexity, the amount of information, uncertainty, predetermination, human factors, and the other factors play an important role.		There are many things that could be done better to make estimation more effective in cost management, but there are many challenges and weaknesses that need to be addressed to make current cost estimation techniques and methods more effective. Also, the understanding of the relationship between customer satisfaction and costs is critical to tracing the origins of customer-level profitability as the need for businesses to become more customer-centric increases. The aforementioned factors and techniques are mainly related to management tools, and little attention has been paid to human communication, either that means communication with the customer or communication of the associated members. Cost modeling still has room for improvement in terms of accuracy and joint cost modeling. In the challenges that will be mentioned below, the complexity, the amount of information, uncertainty, predetermination, human factors, and the other factors play an important role.

S230214: /* Challenges in cost estimation management and areas of implementation */

2023-05-09T17:54:14Z

Challenges in cost estimation management and areas of implementation

← Older revision		Revision as of 17:54, 9 May 2023
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	=Challenges in cost estimation management and areas of implementation=		=Challenges in cost estimation management and areas of implementation=

	There are many things that could be done better to make estimation more effective in cost management, but there are many challenges and weaknesses that need to be addressed to make current cost estimation techniques and methods more effective. Also, understanding the relationship between customer satisfaction and costs is critical to tracing the origins of customer-level profitability as the need for businesses to become more customer-centric increases. The aforementioned factors and techniques are mainly related to management tools, and little attention has been paid to human communication, either that means communication with the customer or communication of the associated members. Cost modeling still has room for improvement in terms of accuracy and joint cost modeling. In the challenges that will be mentioned below, the complexity, the amount of information, uncertainty, predetermination, human factors, and the other factors play an important role.		There are many things that could be done better to make estimation more effective in cost management, but there are many challenges and weaknesses that need to be addressed to make current cost estimation techniques and methods more effective. Also, the understanding of the relationship between customer satisfaction and costs is critical to tracing the origins of customer-level profitability as the need for businesses to become more customer-centric increases. The aforementioned factors and techniques are mainly related to management tools, and little attention has been paid to human communication, either that means communication with the customer or communication of the associated members. Cost modeling still has room for improvement in terms of accuracy and joint cost modeling. In the challenges that will be mentioned below, the complexity, the amount of information, uncertainty, predetermination, human factors, and the other factors play an important role.


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	In their final discussion they quote that among the most crucial cost management tasks and subtasks related to the execution phase of complex projects are updating the project cost estimates, monitoring project costs, controlling project costs, calculating and releasing particular contingencies, calculating margins, and profitability analysis. The main challenges related to estimation cost in management in complex projects, which were characterized by the following attributes: '''large size, complexity, uncertainty and uniqueness'''. Conducting estimation costs in complex projects effectively creates new challenges in terms of the organizational structure, project management, and employee competency. In cost management, function faces unique challenges as projects become more complicated because many of the old cost estimation techniques are unable to handle the complex and unpredictable nature of today's large-scale projects. Additionally, estimating cost in complex projects offer individualized solutions to address the customer's problem, hence the final solution frequently diverges dramatically from those of earlier projects. The estimations are inaccurate because of a lack of experience with comparable projects and the limited accessibility of the previous data. Furthermore, the collaboration of numerous internal and external stakeholders is an important challenge for cost control in large projects. Managing and estimating supplier expenses becomes more challenging as the number of suppliers rises. Also, the uniqueness of a project always causes cost overruns and of course it is a great challenge. Finally, is quite challenging for cost calculation and the financial statements to provide the proper information for the reliable calculation of the project’s cost, and the percentage of completion of the project to be reliably quantified in the financial statement.[8]		In their final discussion they quote that among the most crucial cost management tasks and subtasks related to the execution phase of complex projects are updating the project cost estimates, monitoring project costs, controlling project costs, calculating and releasing particular contingencies, calculating margins, and profitability analysis. The main challenges related to estimation cost in management in complex projects, which were characterized by the following attributes: '''large size, complexity, uncertainty and uniqueness'''. Conducting estimation costs in complex projects effectively creates new challenges in terms of the organizational structure, project management, and employee competency. In cost management, function faces unique challenges as projects become more complicated because many of the old cost estimation techniques are unable to handle the complex and unpredictable nature of today's large-scale projects. Additionally, estimating cost in complex projects offer individualized solutions to address the customer's problem, hence the final solution frequently diverges dramatically from those of earlier projects. The estimations are inaccurate because of a lack of experience with comparable projects and the limited accessibility of the previous data. Furthermore, the collaboration of numerous internal and external stakeholders is an important challenge for cost control in large projects. Managing and estimating supplier expenses becomes more challenging as the number of suppliers rises. Also, the uniqueness of a project always causes cost overruns and of course it is a great challenge. Finally, is quite challenging for cost calculation and the financial statements to provide the proper information for the reliable calculation of the project’s cost, and the percentage of completion of the project to be reliably quantified in the financial statement.[8]


	=Conclusion=		=Conclusion=