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The Impact of Cost Estimation and Analysis Software and Its Influence on i

The Impact of Cost Estimation and Analysis Software and Its Influence on i

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A Research proposal presented in partial fulfillment for the award of Bachelor of Business Information Technology from Kenya Methodist University, for the month of August 2011.



I declare that this proposal is my original work and has not been presented to any other institution or examination body for any other award.



SIGN ______________________

DATE _____________________


SIGN _______________________



DEDICATION I dedicate this proposal to my parents.Jahazi for their great influence in my life and their never-ending support. 3 . and Mrs. Mr.

ACKNOWLEDGEMENT This paper would not have been possible to complete without the support of many individuals.Ombiri with whose guidance has enabled me to come up with this proposal May God Bless you all. 4 . Secondly to my dear loving family for providing support both financially and even through their advice. It is however difficult to mention names of all persons that were of great help but nonetheless: First of all I would want to extend my gratitude to God for giving me the strength and heart to do it to completion. Lastly thanks to Mr. Third to all my friends who were there through the research study for their generosity in sharing ideas.

T projects failure rate show that 3 out of 10 projects fail due to poor and unreliable estimates. statement of problem. 5 . CHAPTER ONE INTRODUCTION The chapter contains background of the study. when needed and costs. the significance.THE IMPACT OF COST ESTIMATION AND ANALYSIS SOFTWARE AND ITS INFLUENCE ON I.1BACKGROUND STUDY Statistics over I. The Data will be entered into excel spread sheets and imparted into statistical packages for analysis. objectives of the study. the research questions and scope of the study. The study aims at efficiently and effectively allocating organizational resources to project activities focusing on the required resources. Internet search.T firms. Only few projects are successful many more are delivered which fail on schedule or budget criteria and a substantial number are cancelled having failed badly. The focus on cost estimating and analysis software also help us to understand why some I. clients.T firms. Both primary and secondary sources of data will be used during data collection.T PROJECTS SUCCESS IN COMPUTER PLANET LIMITED. Cost estimating and analysis software improve the processes required to ensure that I. bulletins and other relevant from the various I. outside interested parties and the project team in Kenyan I. journals. The Data will then be subjected to descriptive statistics and presented inform of tables and graphs. 1. This study will be carried out on the senior management. Secondary data will be obtained from extensive library search.T firms produce successful projects while others fail. quantities needed.T projects.T projects are completed within the approved budget. assumptions and limitations of the study. project manager. This is because doing so will help reduce the chances of failure and thus increase success rates on I. Primary data will be collected by use of questionnaires and oral interviews.

I.S. over 500." Like most people.The results are expected to help I.T services. “page) 4. the universe. if these mistakes are made. Albert Einstein has been widely quoted as saying "There are two things that are infinite. right?Then there are those situations which make someone think whether he was onto something. it is thus necessary to ensure correct processes so as to achieve desired goals and objectives. they fall under schedule and budgeting. IT projects have a terrible track record. performed by people. projects delivered on time and within planned cost are deemed to be successful. costing over $81 B in the U. again and again many companies repeatedly tragically avoidable mistakes. sarcastic quip he made on a bad day. executed and controlled. and human stupidity.2% of IT projects were successful and over 31% were canceled before completion. this is usually written off as an amusing. a 1995 Standish Group study (CHAOS) found that only 16. this may be because of some pretty common mistakes that they make. hamstringing themselves with the same ludicrous errors their competitors (fortunately) are also making. and I'm not sure about the universe. Many project managers.T) projects must be new or add enhanced functionality to hardware and software or I.000 new IT projects were started.000 new IT projects and in 2001.T firms understand how best to go about developing their projects so as to attain expected objectives.T project management which is a sub-discipline of project management involves planning. in 2000. alone. All this in the long-run is aimed at creating a unique product or service. there were 300.Inspite of common sense. For many organizations it is deemed as a onetime activity.T projects.(PMI definition:”A Guide to the Project Management Body of Knowledge PMBOK Guide. monitoring and controlling of information technology projects. The need for IT projects keeps increasing. the project will likely fail. It is also constrained by limited resources (budget). regardless of their level of training face challenges in developing I. A project is a temporary endeavor undertaken to create a unique product or service. they must also have a start and end date. it can't possibly be taken literally. Failure of IT projects translates to billions of shillings lost by organizations annually. I mean. planned.Information Technology(I. A project success or failure is viewed merely by its schedule and budget. When dealing with IT projects. using specialized project management techniques will be very beneficial to your ongoing progress leading to a 6 . This will lead to successful projects and better planning processes that will save time and money along the way.

time. Initially only requiring a developer to write the code of the software. and then validates costs for completeness. and budget. for cost analyses. From start to finish. reasonable and realistic solution. analysts.much higher success rate in the long run. It's easy for a project manager to sit in a meeting and listen to what the clients say they need their new system to achieve. For an IT project manager. auditable. We use cost estimating and analysis software as advanced cost 7 . You need software that suite the business and can work within the required engineering. The software development process has undergone drastic changes over the years. the hard part is translating that business requirement into an end product that fully meets that business need. testers and users to develop code. The primary challenge of project management is to achieve all of the project goals and objectives while honoring the preconceived project constraints. The secondary—and more ambitious—challenge is to optimize the allocation and integration of inputs necessary to meet pre-defined objectives. This leads to credible. leaving you wide open to a lawsuit. Planning and carrying out IT projects can be tricky for a variety of reasons. Involving architects.T firms like Computer Planet depend on good cost estimating and analysis software. Government. it is now capable of delivering more advanced results. technical and cost baselines for critical programs at all stages. accuracy. programmers. you must know “the numbers” and the design decisions and characteristics that drive them. Every IT project is driven by a business requirement. You must be confident in your cost analysis software and their capabilities. advances in the industry have expanded development into a more complex process. In today’s budget-constrained and increasingly risk-averse world. You can avoid some of the most common problems that occur with software development by understanding the three most common reasons for project failure. logistics and management so as to identify every cost and develop accurate results. it’s not enough to envision and develop a critical or transformational program. consistency and sensitivity to ensure success of I. The software’s work with program managers to define and understand programmatic. But what happens when what the client asks for and what you think they mean are two different things? When your solution misses the mark. Typical constraints are scope. you're the one your client will blame. leading strategy and technology consulting firms and other I. you must also articulate its cost. you need proven cost estimating and analysis software and cost models. making the ability to complete them successfully a very valuable asset to any employer.T projects.

accessories. The issue of minimized scope. the company offers top brands in computer systems. 1. As we can see the triple constraint of scope-cost-time constraints every project however the senior management of the firm is more weary and struggling with the current cost management system. Computer Planet Limited is located in Mombasa along Maungano road. mitigate risks. made to speed up the schedule and complete project earlier than planned requires assigning more resources.T project success. this has led to failure of many I. with the state of the art facilities and fully qualified staff. Computer planet has an expanding satisfied customer base throughout the country including NGOs corporate and individuals.T projects there before such that even senior management is not motivated about taking any projects they consider profitable.software and I.T consultancy services. To evaluate the types and variety of software packages. 8 . It is conclusively not efficient and effective as they would like it to be. There is no formal methodology contributing poor and unreliable estimates thus impacting negatively on the company. The company has its branch in Mombasa and headquarters in Nairobi. which will pull up the cost.3OBJECTIVES OF STUDY The specific objectives will be:  To find out whether proper cost management influences I. opposite Kenya National Library.2PROBLEM STATEMENT The firm’s current approach to management of costs when developing I. There is also little user involvement in the process making it more difficult to get feedback that is reliable and complete.T projects is not appropriate. 1.peripherals. meet funding objectives and ensure program affordability. Incepted in 2004. Computer Planet firm has established itself as one of the most accredited and leading supplier of computer and related products and services in the country.estimation and modeling technique to help decision makers identify cost drivers. The employees of Capital Software firm are not really involved wholly in the project development life-cycle thus add little value. This is mostly because there is no standard software infrastructure. Their emphasis has been on cost such that contracts are awarded to the lowest bidder which might not necessarily mean high quality work. this is exactly the current situation in Capital Software firm.

1. This understanding will lead to management better planning and allocation of resources so as to achieve desired goals. First. The fact that there are processes is significant in itself.T firms to carry out more projects. When the management properly understands the role of the employee in this chain. “*The study will benefit different parties as explained below:(a) To the senior Management of Capital Software firm Success in developing any project depends on the effectively and efficiently handling of organizational resources. (b) To the Employees of Capital Software firm The employee is the most important asset in building the customer relationship chain.T projects and also increasing the success rates of I.T projects in the firm. To find out if good cost estimating and analysis software motivate I. the employee will be motivated to work better. Increased involvement boosts employee morale and commitment to give better services to the firm. 9 . Better tools have been created to monitor and control progress and better skilled project managers with better management processes are being used. the average cost of a project has been more than cut in half. The reasons for the increase in successful projects vary.4RESEARCH QUESTIONS This study will be guided by the following research questions:    Does proper cost management influence IT project success? How are cost estimating and analysis software designed and used? Do good cost estimating and analysis software motivate IT firms to carry out more projects? 1.5SIGNIFICANCE OF STUDY This study clearly aims at saving a lot of resources in terms of time and money when developing I.

The study will take about three months. scheduling and budgeting thus enabling projects to be completed in time with efficient usage of resources. 10 . The aim of the study will be to establish that truly the use of cost estimating and analysis software in the firm will increase success rate of I. With increased productivity clients and consumer would enjoy quality service.7LIMITATIONS OF STUDY The researcher might face the following challenges:(i) Non-response Most of the respondents may not be willing to give out the relevant information for effective data analysis.T projects. It also aimed at improving planning. 1.(c) To the customers and clients of Capital Software firm A motivated workforce will always reflect to the company’s customers and clients.6SCOPE OF STUDY The research study will be conducted at Computer Planet Limited. due to certain foreseen difficulties that might be experienced during the study. This will help firm realize its desired goals and objectives. Customers are then more inclined to stay loyal to Capital Software Limited. 1. evaluate project requirement and identify required resources and budget. (d) To the project team The study will enable the project team to effectively understand and appreciate the usage of cost estimating and analysis software in the development of I. The researcher will have to carry out a familiarization exercise and seek permission from the respondents before carrying out any interviews.T projects. (e) To the project manager This study will be used define scope of project. The respondents being employees of Capital Software Limited will not be willing to give out information for fear of being victimized.

It establishes that truly the use of cost estimating and analysis software in the firm will increase success rate of I. This will help firm realize its desired goals and objectives. It also aimed at improving planning. 11 . scheduling and budgeting thus enabling projects to be completed in time with efficient usage of resources. They might not be able to give valuable information required to enable the researcher compile a proper report and relevant report. 1.T Project Success Dependant Variable Reliable estimates Source: Author 2009 Standard s/w infrastructure EXPLANATION The dependant variable in the conceptual framework is profitability.e hardware I.8 Fig 1: CONCEPTUAL FRAMEWORK Cost management processes Cost estimation software Technologyi.T projects.T projects success.(ii) Ignorance Some of the respondents might not be aware of the impact of cost estimating and analysis software and its influence on I.

satisfaction. Therefore profitability loyalty. commitment and productivity are all related to each other. The employee must be committed to their work and must all think “value-adding” to be able to create a superior value for the firm. The creation of superior value is the key driver of satisfaction and loyalty. there must be a dedicated and committed workforce to make it possible.However. 12 .

6). 13 .T projects. tools. In this chapter the researcher will analyze the already existing literature information relevant to the area of study. Project management is “the application of knowledge.CHAPTER TWO LITERATURE REVIEW 2. Project Management Body of Knowledge (PMBOK® Guide). p. scheduling and budgeting thus enabling projects to be completed in time with efficient usage of resources. Profitability generally is the making of gain in business activity for the benefit of the owners of the business.1 INTRODUCTION This study will be carried out to establish that truly the use of cost estimating and analysis software in the firm will increase success rate of I. express or implied.marselle biottelly (2007). “page) IT projects” refers to projects involving hardware. software. It also aimed at improving planning. oral or written. where the employer has the power or right to control and direct the employee in the material details of how the work is to be performed. 2. Black's Law Dictionary page 471 (5th ed.may be defined as: "A person in the service of another under any contract of hire. An employee . 1979). 2000. The word comes from Latin meaning "to make progress". (PMI definition:”A Guide to the Project Management Body of Knowledge PMBOK Guide. This chapter makes an explanation of the existing theories and analysis of the past established knowledge which will help to outline the organized understanding of the major issues and past studies in the related field of study. Bobette Kyle (2005).2 Definition of terms and meanings A project is a temporary endeavor undertaken to create a unique product or service. Project Cost Management includes the processes required to ensure that project is completed within an approved budget. skills. This will help firm realize its desired goals and objectives. and networks. and techniques to project activities in order to meet project requirements” (PMI*. Cost is a resource sacrificed or foregone to achieve a specific objective or something given up in exchange (Macmillan dictionary definition 2005 version).

Infact changing one almost inevitably changes one or both of the others. is a key aspect of project management because each facet is critical and related to the other two. users. Stakeholders are the people involved in or affected by project activities. Scope-Cost-Time. customers. The Triple Constraint of Project Management The Triple constraint. this may require either reduction of project scope or assigning more resources. Stakeholders include: the project sponsor and project team.Quality iso defines quality totality of characteristics of an entity that bear on its ability to satisfy specific needs. In high technology projects quality requirements often have priority over time and cost. opponents to the project just to name but a few. suppliers. Figure 2. If emphasis is on time then the completion date will be dominant factor.1. which will pull up cost. 14 . support staff. If a decision is made to speed up the schedule and complete project earlier than planned.

communication. risk. cost.Fig 2. and quality) 4 facilitating knowledge areas are the means through which the project objectives are achieved (human resources. and procurement management) 1 knowledge area (project integration management) affects and is affected by all of the other knowledge areas  Project Management Tools and Techniques Project management tools and techniques assist project managers and their teams in various aspects of project management 15 . time.2 Project Management Framework 9 Project Management Knowledge Areas: Knowledge areas describe the key competencies that project managers must develop   4 core knowledge areas lead to specific project objectives (scope.

Most people consider the Manhattan Project to be the first project to use “modern” project management.Some specific ones include:      Project Charter. and WBS (scope) Gantt charts. scope statement. critical chain scheduling (time) Cost estimates and earned value management (cost) Much of the knowledge needed to manage projects is unique to the discipline of project management Project managers must also have knowledge and experience in o general management o the application area of the project 2. This three-year.3HISTORY OF MANAGEMENT OF I. as was building the Great Wall of China. network diagrams. $2 billion (in 1946 dollars) project had a separate project manager and a technical manager 16 . critical path analysis.T PROJECTS Some people argue that building the Egyptian pyramids was a project.

were drawn by hand.Fig 2. Early Gantt Charts. first used in 1917. and each task’s start and finish date are shown on the right using a calendar timescale. 17 .3 Sample Gantt chart The WBS is on the left.

Network diagrams were first used in 1958 on the Navy Polaris project. there were hundreds of different products to assist in performing project management Three main categories of tools exist:    Low-end tools: Handle single or smaller projects well. Arrows show dependencies between tasks. Project 2000 most popular High-end tools: Also called enterprise project management software.Fig 2. before project management software was available. cost $200-500 per user. the whole project will slip unless something is done. The bolded tasks are on the critical path. If any tasks on the critical path take longer than planned.4 PROJECT MANAGEMENT SOFTWARE By 2003. cost under $200 per user Midrange tools: Handle multiple projects and users. 2.4 Sample Network Diagram Each box is a project task from the WBS. often licensed on a per-user basis Project 2002 now includes a separate version for enterprise project management (see Appendix A for details on Project 2002) 18 .

1 INTRODUCTION This section will discuss the methods that were used during data collection for the research in order to attain the objectives of the study. that is. Table 1: Sample size in strata Cadre Senior Management Employees 150 72 48 Population 6 Sample Size 3 Percentage 50 19 . Computer Planet Limited.4 Sample Size/Design The sample size will be drawn from the target population. clients. A sample size of 100 respondents will be drawn and fairly distributed throughout the sections of the hotel fraternity. The study will target a population of 100 drawn from the three cadres. sampling technique. employees and the senior management. sample size. project team and the Senior Management. Below is a representation of the sample size. scheduling and budgeting thus enabling projects to be completed in time with efficient usage of resources.3 Population of the study The study area of the research will be Computer Planet Limited with the target population being clients. source of information.2 Research Design This research study will be undertaken as a case study as the investigation will only cover Computer Planet Limited. Mombasa has a population of approximately 150 employees and six managers. 3. data collection instruments and procedures and data analysis method. it is aimed at improving planning. The study will outline the research plan. 3.CHAPTER THREE RESEARCH METHODOLOGY 3. 3. design. population. the research site. employees.

bulletins and Hotel magazines. extensive library research. The respondents will be picked randomly and also the questionnaires will be randomly distributed across the three cadres. (b) Personal Interviews This is a face to face conversation with the respondents where the researcher will collect data from the responses given during the interviews. the researcher will sought for permission from the sections heads for the lists of targeted respondents and then distribute the questionnaires. a) Questionnaires The researcher will prepare simple open ended and structured questions in line with the research objectives which will be distributed to the respondents.Clients TOTAL 50 206 25 100 50 148 3. random sampling technique will be used to be sure of availability of respondents and to obtain accurate information required. the researcher will give a draft of the survey questionnaires to some of the managers for approval. newspapers. 20 .5 Sampling Technique For the purpose of time saving and to eliminate bias.7 Data collection procedures a) Questionnaires The researcher will prepare 100 questionnaires that will help realize the objectives. The respondents will be requested to complete the questionnaires and hand over after three days. 3. the Internet. 3. In order to guarantee the soundness of this instrument.6 Data Collection Instruments/Methods The Primary data will be collected by use of questionnaires and Personal Interviews. After approval of the questionnaires. Secondary data will be collected from text books.

the researcher will then collect the data and reported the findings in terms of respondents sample size.b) Personal Interviews The researcher will carry out the interviews at the firm premises. http://office. the researcher will schedule for interviews during lunch breaks. The analysis will be given in terms of percentages and in tabulations. 21 .com/en-us/project/HA102354821033.microsoft. REFERENCE 1.aspx. ^ a b c Chatfield.8 Data analysis method and Presentation technique Subsequent to the giving out of the survey questionnaires and conducting the personal interviews. For those respondents who will be busy during working hours. There will be pre-arranged appointments with the guests through the management made to make it as convenient as possible to conduct the interviews. cadres and respondent’s characteristics. "A short course in project management". The representation will then be done graphically. 3. Carl. The researcher will then record all responses as data. Microsoft.

Ireland (2006) Project Management. 2nd Ed. Sebastian. Elias G.n.35 and further. p. McGrawHill Professional. In: The story of managing projects. Ltd. ^ Lewis R. London (Financial Times / Prentice Hall): 2007. ^ Young-Hoon Kwak (2005). McGraw-Hill Professional. ^ Paul C. Dinsmore et al (2005) The right projects done right! John Wiley and Sons. ^ Dennis Lock (2007) Project management (9e ed. ISBN 0-07-223062-2 p. PMP Project Management Professional Study Guide. Greenwood Publishing Group. ISBN 0-7879-7113-8. Nokes.2. ISBN 1-56720-506-2 22 . 5. 2005.) Gower Publishing. 2007. ISBN 0-07-147160-X. 6. ISBN 978 0 273 71097 4 3. ISBN 0-566-08772-3 7.110. (9 eds). 2003.. p. 2006. ^ *The Definitive Guide to Project Management.354. 4. 2005. "A brief history of Project Management". Carayannis et al. ^ Joseph Phillips (2003).

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