For my capstone project, my team and I had initially determined a budget of $110 for the development of our project. Unfortunately, our project ended up going over budget because we made the error of accounting for only a small number of spare parts. Due to errors during soldering, we ended up damaging a sensor including the spares we had purchased. Therefore, at this stage, our project ended up going over budget resulting in a negative cost variance because we had to purchase extra sensors that were not originally accounted for. Due to a two-week time delay for us to receive the new sensors, our schedule variance was also negative at that point because we were behind schedule. Despite this setback, we were able to eventually get back onto schedule and complete our project prior to our scheduled completion date. At the time, my team and I had only used our budget to assess whether we were above or below our proposed value, but it is now clear that calculations of the schedule and cost variance would have been beneficial in monitoring the progress of our project.
With any project management process cost analysis need to be a major component of the planning portion. Without knowing how much your project may cost can detrimentally affect the chances of success. It is also important information to know because the project maybe financially draining and the risks might outweigh the benefits. Cost analysis is beneficial because of the information gained and it also gives the project team the time to brainstorm and figure out the best way to make the development process more efficient and cost effective to increase the future profit.
In this week’s lecture, we learned about planned value and actual cost. Planned value is the value of the work you are supposed to have on a certain date. While the actual cost is the cost of the project actually winds up being.
For my capstone project, we had to come up with an estimated budget to develop our mobile application and potentially pay people to see if the application can be crashed. We estimated a budget of about $2,000, but at the end of the project, we spent less than what we proposed. Thus, our cost variance was less than what we thought and thus we were under budget in creating the mobile application. We did not conduct a schedule variance. Moreover, we did not have planned value for our project. So we were not able to see the value of our project.
Share a time when you oversaw a project in school or industry that you had to do a budget. How did your budget play out? Was it over or under? Why? Did your company or team have a planned value for the project? If so, how was the schedule variance?
I have yet to cover this topic in my course, but I can think of a time there was a budget involved in a project. In my current profession, education, I previously sponsored the school pageants. There were two per year (one for girls and boys). We depended on patrons and ticket sells from the prior year to support the following: decor, flowers, crown, plaques, judges, photographer, videographer, security, trophies, programs, newspaper, music, participants' gifts, and scholarship award. When I inherited the pageant and pageant club, it had been a well established program. We weren't rich, but we had enough to produce the pageants. I always ensured that I cut costs wherever possible. I would have to defer to the bookkeeper regarding our budget. Some years the judges would get paid more or less depending on what funds were available. Thankfully most of the things that were needed remained the same or similar price from year to year, so it was easier to account for some things that might cost more every now and then. We ended up below budget every year.
While in undergrad, I ran for student body vice president. This entailed providing a campaign budget with which we used to buy supplies for our campaign. The budget had a $100 limit (very low) so creativity was needed on the part of my team and me. In the end, I was able to stay within the budget, utilizing local businesses and other students on campus. After notifying people of the campaign, they were usually willing to award me with a discounted price, which is how I was able to stay within the budget. Overall, this experience not only taught me the value of a dollar, it taught me how important budgeting can be to a project. Being able to be resourceful and stay within the budget then is a main reason I am more fiscally responsible now.
My favorite project is when I hired a software programmer to build a software app and he was on budget. My worst was the programmer I hired before the successful programmer. He was a habitual liar, and essentially, the lies became too much for him to keep up with. He could not meet any milestones. Whereas my successful programmer implemented a project management system. We used this system to monitor progress and payment. The unsuccessful programmer did not have such a tool. We also achieved the planned value for the project and we slightly exceeded the schedule variance, but it was due to change requests. Ultimately, the learning was that you must have contractors take you thought a project simulation before you hire – but it has to be in detail.
During my Capstone project, my group initially created detailed plans of the design and materials we would need to complete the project. We then estimated our budget based on the cost required to purchase the necessary materials. We were creating a protective cap, so a significant part of our budget was materials that would be effective in absorbing impact. Our project ended up being under budget due to the fact that we ended up having access to a large portion of the materials we needed. Some materials were passed down from previous groups and we also acquired samples of impact reduction materials from vendors to save money during material testing and fabrication. We did not have a planned value for the project, so we were not able to determine schedule variance.
In this week’s lecture, we learned about planned value and actual cost. Planned value is the value of the work you are supposed to have on a certain date. While the actual cost is the cost of the project actually winds up being.
For my capstone project, we had to come up with an estimated budget to develop our mobile application and potentially pay people to see if the application can be crashed. We estimated a budget of about $2,000, but at the end of the project, we spent less than what we proposed. Thus, our cost variance was less than what we thought and thus we were under budget in creating the mobile application. We did not conduct a schedule variance. Moreover, we did not have planned value for our project. So we were not able to see the value of our project.
Share a time when you oversaw a project in school or industry that you had to do a budget. How did your budget play out? Was it over or under? Why? Did your company or team have a planned value for the project? If so, how was the schedule variance?
What are the threats of being under budget to a project? If you had a planned value for your project would this have reduced the value of the project?
