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ARU COVER SHEET

MODULE: PROJECT MANAGEMENT


Module Code: MOD001103
Academic Year: 2015/16
STUDENT ID: 1527488/1
COHORT: June 2015
WORD COUNT: 3000

TITLE:

Engineering Consultancy Limited Case Study

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Acknowledgements

I acknowledge Mr. Andre Samuel for his consistent efforts to ensure that there was
a good understanding about the concepts associated with the Project Management
Course.

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Table of Contents
PART A General Overview........................................................................................ 4

PART B Project Planning......................................................................................... 24

PART C Budget Creation......................................................................................... 27

References............................................................................................................ 29

Appendix Part B.1 - Original Gantt Chart 4 months.............................................31

Appendix Part B.2 - Updated Gantt Chart..............................................................32

Appendix Part C.1 - Original Budget......................................................................33

Appendix Part C.2 - Updated Budget.....................................................................34

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PART A General Overview

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1.0 Introduction
This report is intended to provide Engineering Consultancy Limited (ECL) on guidance for the
introduction of a Project Management Office (PMO). The report is important as it can support
decision makers in establishing the optimal PMO for the company.

ECL is a leading company delivering projects and consultancy the field and engineering and
infrastructure in both the private and public sectors. The staff at ECL is comprised of 250
people. The report will be presented to ECLs Managing Director who is preparing for the next
board meeting with key shareholders. The main objectives of this report will be to help the
Managing Director of ECL Engineering Limited understand the benefits of establishing a PMO.
The report will outline the key roles of the PMO, the relationship between the PMO and project
process management and provide a brief description on the processes involved in establishing a
PMO. Evidence to support the information provided to the Managing Director will be sourced
from established Project Management research. A proposed budget and timeline for the
establishment of the PMO is also included in the report.

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Definition
A project is a temporary endeavor undertaken to create a unique product, service or result.
(Project Management Institute (PMI), 2004). Projects are executed using a project management
framework. Project Management Body of Knowledge (PMBOK) defines project management
as the application of knowledge, skills, tools, and techniques to project activities to meet the
project requirements. Burke, (2003) definition of project management combines extends to
include meeting the needs and expectations of stakeholders.
Project Life Cycle
A project has a life cycle can be described as s a series of phases from startup to
decommissioning. Identified hereunder is the generic project life cycle structure:

Starting the project

Organizing and preparing

Carrying out the Project work, and

Closing the project.

The life cycle provides the basic framework for managing the project regardless of the work
involved. Maylor (2010) uses the 4D model to describe the life-cycle or phases of the project.
See Table 1.1 which identifies the project life cycle in Maylors 4D style.

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Table 1.0 Four Phases of Project Management

Phase

Key issues

Fundamental questions

Define the Project

Project and Organizational strategy, goal

What is to be done and why

Design

definition
Modelling and planning, estimating, resources

How will it be done

Process

analysis, conflict resolution and justification

Who will be involved in each part

Deliver the Project

Organization, control, leadership, decision-

When can it start and finish


How should the project

Develop the Process

making and problem -solving


Assessment of process and outcomes of the

managed on a day-to-day basis


How can the process be continually

the

Project

project, evaluation, changes for the future


Source: Adapted from Maylor, 2010 Project Management

be

improved

Turner 2006 argues that the project life cycle take us from the initial germ of an idea that that
there is some change we can make to improve performance to the point where we have an
operating asset providing benefit; and the management process which are the management steps
to be followed at each state to deliver that stage. A distinction must be made between the two.
Group Processes
There are five Project Management process groups which are intended to generate information to
improve project management. These include initiating process group, Planning Process group,
Executing process group, Monitoring and controlling process group and closing process group.
(Burke and Barron, 2007: PMBOK, 2014).
There are different kinds of offices for projects including Project office which refers to a building
or site and the Project Management Office (PMO) which is the focus of this report.

1.1 Relationship between (PMO) and Project Process Management

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A project Management Office (PMO) is a management structure that standardizes the projectrelated governance processes and facilitates the sharing of resources, methodologies, tool and
techniques. The responsibilities of the PMO can range from providing project
management support functions to actually being responsible for the direct management of a
project. (PMI, 2013).
Hobbs & Abry (2007) argue that a PMO is that of a functional unit present at an
organizational level that attempts to centralize the coordination of the management aspects of
projects. The PMO is a special department in an organization that is endowed with the
responsibility of putting into action the designated project ideas. The structure of the PMO
provides an organized and systematic approach to project management (Engle, 2005).
For the purposes of this report the PMI definition will be used.

Purpose
The purpose of the PMO can be described in three words facilitating, integrating and
enabling (Meredith and Mantel, 2012). The PMO manages the interdependencies between
projects (Effective PMOs, 2006). It is difficult to provide an accurate description of the roles of
the PMO, because of the large number of roles they perform. (Hobbs & Abry, 2007) identified
twenty seven different functions of PMOs in their research. See Table 1.1

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Table 1.1 Twenty Seven Functions of PMO


1.Monitoring and Controlling Project
Performance

Report project status to upper


management
Monitor and control of project
performance
Implement and operate a project
information system
Develop and maintain a project
Scoreboard

4. Strategic Management

2. Development Of Project Management


Competencies and Methodologies

Develop and implement a


standard methodology

Promote project management


within the organization

Develop competency of
personnel including training

Provide mentoring for project


mangers

Provide a set of tools without an


effort to standardize
5. Organization Learning

Provide advice to upper


management
Participate in strategic planning
Benefits management
Network and environmental
scanning

Monitor and control performance


of PMO
Manage archives of project
documentation
Conduct Project audits
Implement and manage database
of lessons learned
Implement and manage risk
data-base

Multi-Project Management

Coordinate between projects


Identify, select, and prioritize
new projects
Manage one or more portfolios
Manage one or more programs
Allocate resources between
projects

6. Other functions (not in any group)

Execute specialized tasks for


project managers
Manager customer interfaces
Recruit, select, evaluate and
determine salaries for project
managers

Source Hobbs & Abry (2007)


Hurts & Thomas (2009) classified these twenty-seven groups into five groups of functionality.
Similarly Dai and Wells, 2004 classified the same groups into six groups, all supporting the
achievement of the same objective.
According to the PMI 2013 the primary function of the PMO is to support managers in a variety
of ways which may include but not limited to:

Managing shared resources across all projects administer by the PMO

Identifying and developing project management methodology, best practices and


standards, coaching, mentoring, training and oversight

Developing and managing project policies, procedures, templates, and other shared
documentation

Conducting communication across projects

A 2011 PMI survey found that having a PMO was a key practice in improving project
performance, and their roles now commonly include portfolio management, program
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management, monitoring project success metrics, and managing project resource allocation
The PMI found that over 72% of the companies which implemented a PMO have achieved
higher performance levels against those companies which did not implement PMO Structures.
Weaver (2005) states that the success rates among mature PMOs are 98% and 53% for newly
established PMOs. Weaver argues that without PMOs the projects success rate is less than 50%.
The PMOs main purpose therefore is to establish project administration procedures for
selecting, initializing and planning, budgeting, and scheduling projects as well as to serve as a
repository for reports on performance. The role of the project manager and strategic management
is inextricably linked as one of the project managers roles is the assimilation of project best
practice throughout the organization.

Types of Project Management Offices (PMOs)


There are various types of PMOs that exist in the corporate world (Wellman, 2007). They are
described as supportive the PMO, the controlling PMO and the directive PMO. Each one will be
briefly examined using the PMBOK as the springboard.
Supportive PMO
The supportive PMO adopts a consultative role and provides projects with templates, best
practices, training, access to information and lessons learned from other projects. The supportive
PMO serves as a project repository and has more performs more of an influencing than
controlling role (Wellman, 2007)

Controlling PMO

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The controlling or governance PMO provides support and establishes end ensures compliance
throughout the project (Luftman, 2004). Compliance may involve adopting project management
frameworks or methodologies, using specific templates, forms and tolls, or conformance to
governance (Wren, 2005). This PMO provides a moderate degree of control.
Directive PMO
The directive PMO takes control of the projects directly by managing the projects. The degree of
control in this PMO is high.

Project Process Groups & The Role of the PMO


The PMO and project process management are inseparable entities. Project management
involves different processes that are considered key elements towards realizing the success level
of the project. Despite the changes and the methodology that the entity undertakes, the main
processes that the project should articulate include: initiation, planning, execution,
monitoring/controlling, and closing (Wells, 2007). Figure 1.1 looks at the project management
process and the various roles performed:
Figure 1.1Project Process Management

These will be discussed in detail hereunder using the PMBOK as a springboard:


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Initiation Process Group: The initiation process group consists of those processes performed to
define a new project or a new phase of an existing project by obtaining authorization to start the
project or phase (PMI, 2013). The initiation process group has two processes: Project Charter
and Risk Register. The role of the PMO is defined, resources are committed, stakeholders
identified and the project manager selected and processes documented in the project charter and
stakeholder register. The purpose of this process group is to align the stakeholders expectations
with the project purpose, give them visibility about the scope and objectives, show how their
participation in the project and its associated phases can ensure that their expectation are
achieved. It is here that the vision is set and mission identified.

Planning Process Group: The planning process group consists of those processes performed to
establish the total scope of the effort, define and refine the objectives, and develop the course of
action required to attain those objectives (PMI, 2013).

The planning process aids in the

development of the project management plan, scope and project documents for the project. The
tools and methodologies such as the flowchart and management schedule are used in determining
the efficacy of the project. Here the planning and documentation are repetitive and ongoing
activities. This process group defines the strategy and tactics as well as the as well as the
activities necessary for project completion. The project manager, for instance, defines refines the
Scope of Works, budget, procurement,

timelines, human resources and communications

management and deliverables for team members and subcontracts to ensure prioritization and
delivery of key project milestones and deliverables.

Executing Process Group: The executing process group consists of those processes performed to
complete the work defined in the project management plan to satisfy the project specification.
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These processes belong to several knowledge areas ranging from Project Integration
Management to Project Human Resource Management to Project Stakeholder Management.
This process group focus is on allocation of resources, co-ordination of activities, and managing
the human resources (PMI, 2013). This project process involves working within the budgeted
costs and materials that are budgeted by the organization. These processes enable the completion
of the work defined in the project management plan. Most of the project budget is used in this
Execution process group. The role of the PMO in this process group is to work with the project
leadership to execute on the governance plan defined in the proposal.

Typical activities

undertaken include defining award and account setup to facilitate the teams research, aiding in
staffing the project, mapping contract and procure requirements to project deliverables, and
initiating team communications mechanisms such as websites and meetings. The PMO is also
responsible for directing and managing project work, performing quality assurance, onboarding
the project team, and managing stakeholder engagement.

Monitoring and Controlling Process Group: The monitoring and controlling process group
consists of those processes required to track, review and orchestrate he progress and
performance of the project; identify any areas in which changes to the plan are required; and
initiate the corresponding changes.

There are several processes in the Monitoring and

Controlling Process Group. These processes belong to knowledge areas ranging from Project
Scope Management to Project Risk Management to Project Quality Management. (PMI, 2013)
The key benefit of this process group is to identify variances from the project management plan.
The role of the PMO monitor the project teams performance to the proposed timelines for
milestones and deliverables, project expenditures (capital, personnel, direct costs, cost share,

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etc.), and communications is to control the changes and recommend preventive action,
monitoring the project plan and performance of the project team. The PMO will monitor the
project teams performance to the proposed timelines requirements with the sponsor The PMO
also plays an influencing role to ensure that that only the approved changes are implemented.
The PMO will also work with the project team to make modifications to proposed timelines,
budgets, and personnel. The various processes in the e Monitoring and Controlling process
group are able to identify when projects are not going according to plan and provide the
mechanisms to bring them back on track as they also trigger. Processes in other process
groups. For example, project plans may be tweaked based on the work performance information.

Closing Process Group: The closing process group consists of those processes performed to
conclude all activities across all Project Management Groups to formally complete the project,
phase, or contractual obligations. The Closing process group has two processes: Close Project
or Phase and Close Procurements (PMI, 2013). Every project that is implemented in the sector
should have a closing phase. Under this stage, the project management team accepts the end of
the project through formal presentation (Bucher and Winter, 2009). The phase focuses on the
contract and project closure. In the contract closure, the items of the contract are clearly settled
with the aim of enhancing success level and improving the productivity in the sector. The project
closure involves finalizing the activities that are involved in all the processes that are involved in
the project phases. In Project Close-Out, as the project enters the final phases the PMO will work
with the project management team to develop staff transition and expenditure plans for the
project personnel. Once the project performance period has been completed, the PMO will work
with the project team to complete final reporting and account reconciliation and closure. The
lessons learned are carried forward and addressed in the next phase. If the project has been
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aborted, you still need to perform the Close Project and Phase and the Close Procurements
processes, assuming that there is an external vendor.

1.2 Summary roles of a PMO


The PMO is endowed with the responsibility of implementing all the plans for the company. It
scrutinizes the required facilities necessary to put a particular plan into action together with
ensuring adequate orientation of staff members. For that reason the PMO is also tasked with the
responsibilities of headhunting of the projects management staff. It does this through the process
of vetting the shortlisted applicants in a transparent and accountable manner so that only those
who are equal to the task get the opportunity (PMI, 2013)

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Table: 1.2 Summary Roles of the PMO

Project life cycle stages

Project processes

Role of PMO

Initiation stage

Proposal

Evaluate Business Case

Project Definition Report

Assign Project Managers

Stakeholder Register

Recruit Project Team


Define Project
Project Selection

Planning Stage

Project Plan

Contract Management

Project Scope

Resource Planning

Work Breakdown Schedule

Scheduling Expertise to PM

Organization Breakdown Structure


Budget
Execution Stage

Project Control

Risk Assessment/Risk Plan


Time management

Metrics

Cost management

performance

Quality management - Change

Risk Management & Control

management

Document Control

Issue management -

Progress Reports

Risk Plan

Risk Management & Mitigation

used

to

track

Measures
Project Closure

Project Closure Report

Knowledge Transfer
Project Review

Authors Table

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1.3 Implementing A PMO


Duggal (2007) argues that a PMO should be selected based on the purpose for which it is
required. For the Engineering Consultancy Limited (ECL) the PMO is being created to improve
project management and improve project presses.

There are many factors that should be

considered in order to implement a PMO. Jane (2007) argues that building a successful PMO
has structural components similar to any other construction project including strong foundation
and floor, solid structural supports, and a strong exterior are essential components of building
your PMO.

Figure 1.3 below lists the factors to be considered when implementing

a PMO.

Figure 1.3

Cynthia (2007) argues that a PMO could be centralized or decentralized and the selection of the
appropriate structure depends on many factors.
Jim (2009) argues that each PMO is unique because they are based on the context and culture of
their respective organizations. It is therefore important to select the right PMO to ensure success
of the organization. Maylor, (2006) describes a number of phases in building and implementing
successful PMO that addresses all aspects from conception to evaluation. Establishing a PMO

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requires research and analysis. Lendry (2006) has proposed 5 stages to implement a successful
PMO. Figure 1.3.2
Figure 1.3.2

Steps to Implemt PMO (Lendry, 2005)

It is imperative that ECL must select the right type and model of PMO that fits with the culture
of the organization. This can be established through the assessment of the current status of
project management and the current project management portfolio within the organization. It
must be established how projects are currently executed and the perception of project
management values of the organization.

ECL also needs to review project management

methodology and governance reporting and ensure that stakeholders are identified and analyzed
(Maylor, 3006)
ECL must also ensure that there is the right standardization of project methodologies and
procedures which should be unified throughout the organization. It is imperative that ECL builds
a good team, solid leadership and clear ownership as the selection of competent staff and strong
leaders will build clear authorities and responsibilities. The PMO should be well-funded, the
roles established.

On completion of the design of the PMO key artefacts, there should be

training of the project managers and completion of the PMO pilots, if necessary. Figure x
demonstrates how the standards, processes, resources policies and training flow into the PMO.

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Figure 1.3.3

With implementation there must be evaluation and therefore ECL must ensure that there is
opportunity for continuous improvement within the PMO as the PMO will be used as a catalyst
to neutralize improvement across the organization which will support the organizations strategic
goals.

It is important to note that all stakeholders may not buy in and support the project

Business culture is different and project management processes are not fully understood

Limited technical expertise and the risk of trained employees moving on to the new job.
Additional training is required and acquiring of a high level of technology may be slow

1.4 Steps to improve project process management


Management at ECL
The type of PMO suited for ECL
ECL requires a consultancy type of project management office. This will be charged with
the responsibility of offering consultancy services to the engineers of ECL about crucial issues
pertaining to the manner in which company activities should be run. The PMO will also
determine the kind of staff suited for the designed project as well as taking part on the
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headhunting process. When it comes to the orientating of the staff, PMO will also take charge by
ensuring the hired individual get the require tip on how to accomplish the tasks stipulate in the
contracts. It is clear that the adoption of this kind of PMO by ECL organization will be a great
idea as compared to if it were to adopt the action oriented PMO.
Team roles for ECLs PMO
The recommended roles for ECL PMO are listed hereunder:
Manager PMO. This individual could be located in the business and reports to the Managing
Director.
Planning Engineer will report to the PMO Manager. The individual will provide project control
and support and measure and monitor the project execution so that corrective action may be
taken.
Cost Engineer will report to the Managing Director who will also act as a risk management
subject matter expert (SME). The individual will be responsible for budgets as well as analyzing
earned value cost variances for programs and projects.
Change Coordinator required to register and administer the project change requests to ensure
that they are followed through from initial consideration to implementation and incorporation in
project documents and cost records
IT Support provides the latest industry direction on project management software applications
and daily supervision of the project business management system for the PMO
Contracts Administrator also reporting to the PMO manager and will be responsible for all
contracting and legal issues involved in the PMO. Consistent with the Team Roles Figure 1.4
identifies the corresponding organizational chart for the PMO

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Figure 1.4

PMO
MANAGER

PMO STAFF PMO STAFF PMO STAFF PMO STAFF PMO STAFF PMO STAFF
A standardized Methodology to be adopted by ECL
The best standardized methodology that ECL should adopt to stimulate project process
management is Project Management Body of Knowledge (PMBOK). This is the methodology
which empowers project managers. Courtesy of PMBOK, project managers enhance their skills;
improve their organizations success as well as augmenting their professional maturity. PMBOK
is suitable because other than being a recognized worldwide advocacy for project management, it
is also reinforce by globally recognized standards, chapters and communities of practice and
extensive academic programs, certification and market research programs as well as professional

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development opportunities. PMBOK can enable ECL to augment its popularity and attract many
clients through its exceptional services.

Tools and techniques


Turner (2006) identifies various tools and techniques for managing human resources in the
project. These are identified in Table 1.4 below
Method
Managing Stakeholders

Techniques
Stakeholder analysis

Managing Scope

Product breakdown
Work Breakdown
Configuration Management
Organization breakdown
Quality Assurance
Quality control cube
Earned Value
PERT/CPA
Risk Management
Start Up Workshop
Definition Workshop
Base lining
Forwarding-looking control

Managing Organization
Managing Quality

Managing time
Managing Risk
Feasibility
Design
Execution
Control
Close-Out

Tools
Stakeholder Register
Communication
Milestone Plans
Activity Schedules
Responsibility Charts
Quality Plans
Review and Audits Procedures
Manual
Definition of Report
Project Manual
Work-to-lists
Turnaround documents
Checklists

Source Turner, Project Based Management 2009


The functions of project based management are identified in figure 1.4 below

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Figure 1.4 Five functions of Project Based Management (Turner 2009)


Conclusion Part A
Evidence from the literature suggests that the ideal PMO that should be adopted by ECL is one
that focuses on supervision and mentorship. The PMO should adopt an advisory role and should
be trusted throughout the business especially by top management to ensure that it is aligned with
the organizational strategies. This type of PMO would ensure adequate interface between the
projects and other parts of the organization creating an enabling environment for the success of
the project. The PMO knowledge management activities should supervise a process or event, but
refrain from trying to dictate how things should move, which is best left to the staff on the
project. There should be adequate controls in place to monitor and be more of a consultant role.
A PMO office will be ideal for ECL since many organizations, particularly from sectors that
run, large-scale projects, use project offices to assist in all aspects of the management of project
work

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PART B Project Planning

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PART B Gantt Chart


2.0

The Gantt Chart at Appendix B1 outlines the Following

Project Duration: 4 months


Start date - 10/08/2015 and End Date 9/12/2015
There are four public 4 public holidays - 31/08/2015; 7/09/2015; 24/09/2015; and

11/11/2015
Working days will be from Monday Friday with the daily working hours of 8am to

4pm.
Predecessors
o Task #2 and #3 cannot start until #1 is completed.
o Task #4 is dependent on #3 and #4.
o Task #5 is dependent on task 4
o Task #7 is dependent on the completion of task #5 and #6
o Task#8 is dependent on task #7
o Task #9 is dependent on task 10
o Constraints: resource- capital

Critical path is defined by PMBOK as the sequence of schedule activities that determines the
duration of the project. The critical path is identified as the tasks that determine the end of a
task in the project schedule. Should one of these tasks be late by a specific period, the project
will have to be extended by that period.

B1: Updated Gantt Chart


Based on the Gant Chart, Appendix B2, the project implementation has been scheduled to take
place within three months instead of four as it had been previously proposed in appendix B1.
The best way to ensure that the project takes a shorter time is to reduce the days allocated for
some activities. Based on the original Gantt Chart the following activities were reduced. For

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the project duration to be reduced to three months, the Improvement Process is reduced from to
10 days, the draft of PMO report will be reduced to 5 days, the selection of Planning software
reduced to 25 days. This was accomplished through fast-tracking. It is a schedule compression
technique (PMI, 2013). Overlapping phases may call for additional resources when this method
is used as it may increase risk.

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PART C Budget Creation

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C1: Budget Creation


The allocated budget for this project is $447,276.00. This will be distributed across all the cost
elements in the project including the expenses related to the wages and salaries of the two
secretaries, the two consultants, and the new Senior Project Manager. The acquisition of new PC
hardware for the project will cost the company 35,000, but this is a one-off expense incurred by
the management. In addition, other one-off expenses include the acquisition of the project
planning software worth 27,000 and other miscellaneous costs of 25,000.

C2: Updated Budget


Following the meeting with the Finance Director, it was feasible to reduce the cost of operations
to. This was done through reducing the schedule for project to three (3) months. When the period
of the project is reduced, the management cuts costs on the salaries and wages to be paid for the
fourth month. This reduces the budget to $372, 317.00

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Appendix Part B.1 - Original Gantt Chart 4 months

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Appendix Part B.2 - Updated Gantt Chart

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Appendix Part C.1 - Original Budget

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Appendix Part C.2 - Updated Budget


Duration/
Days

Staff

Rate/Hour

Rate/Day

Cost

Direct Labour Costs


Requirement Analysis
Detailed Analysis Effectiveness of
the PMO

Improvement of Project Process

Detailed Description of the PMO

Selection of Project Planning


Software

Computing Centre Review

Draft of PMO Report

Discussion of Report with MD

Writing of Final PMO Report

Presentation of final PMO report

10

C1

10

C2

C1

C2

10

C1

10

C2

C1

C2

25

C1

25

C2

10

C1

10

C2

C1

C2

C1

C2

C1

C2
C1
C2

150.00

150.00

150.00

150.00

150.00

150.00

150.00

150.00

150.00

150.00

150.00

150.00

150.00

150.00

150.00

150.00

150.00

150.00

1,200.00

1,200.00

1,200.00

1,200.00

1,200.00

1,200.00

1,200.00

1,200.00

1,200.00

1,200.00

1,200.00

1,200.00

1,200.00

1,200.00

1,200.00

1,200.00

1,200.00

1,200.00

12,000.00

12,000.00

6,000.00

6,000.00

12,000.00

12,000.00

6,000.00

6,000.00

30,000.00

30,000.00

12,000.00

12,000.00

6,000.00

6,000.00

1,200.00

1,200.00

3,600.00

3,600.00

177,600.00

Total Direct Labour Costs


Indirect Labour Costs
S1
S2
SPO

6,500.00

6,500.00

21,000.00

34,000.00

Total Indirect Labour Costs

211,600.00

TOTAL LABOUR COST


Other Indirect Costs
Accommodation

Page | 34

9,100.00

Fixed Costs
PC Hardware
Planning Software
Miscellaneous
Total Fixed Cost

9,100.00

35,000.00
27,000.00
25,000.00

87,000.00

Base Cost plus Contingency

307,700.00

30,770.00

338,470.00

Risk Costs (10%)

33,847.00

Estimated Total Costs

372,317.00

TOTAL BASE COST


Contingency (10%)

Page | 35