Project Introduction

Abdul Haseeb, Durish Zakir, Javeria Zahid

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 Project Introduction

TABLE OF CONTENTS

Contents
1.0 INTRODUCTION ....................................................................................................................................... 3
2.0 SPONSOR / CLIENT................................................................................................................................... 3
3.0 SCOPE ...................................................................................................................................................... 3
3.1 PROJECT PURPOSE AND JUSTIFICATION ................................................................................................. 3
3.2 SCOPE DESCRIPTION ................................................................................................................................ 4
3.3 HIGH LEVEL REQUIREMENTS ................................................................................................................... 4
3.4 BOUNDARIES ........................................................................................................................................... 5
3.5 DELIVERABLES.......................................................................................................................................... 5

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PROJECT DESCRIPTION

1.0 INTRODUCTION
The title of project is “Stock Management and Reporting System (SMRS)”. This is a
Management Information System (MIS) shall allow the store staff to monitor in real time what are
the stock positions in their store and other stores of the same chain. Furthermore, it shall allow
the management to and draw reports related to stocks and sales for monitoring and improvement
of company and store performance.

2.0 SPONSOR / CLIENT

The sponsor and client of the project is DAJ Corporation which is a chain of stores specializing in
medicines, cosmetics and nutrition products. The company was founded in 2010 and is currently
operating 10 stores in two adjacent cities in the country. DAJ intends to establish a Management
Information System (MIS) in its stores to improve its management of stock and sales. The MIS
has been named as SMRS. This system shall be first made online in all of its current stores and it
shall be replicated in any new store in the future. Furthermore, based on the success of this
project, the company intends to expand scope of its MIS in future to include supplier management
and online sales as well. Since the core competencies of store management are in the area of
MIS development, it has been decided to outsource the development and deployment of SMRS
on turnkey basis to another company that specializes in this area. As a result, the contract has
been awarded to our company Oracle Solutions to carry out this project.

3.0 SCOPE
The SMRS to be developed should enable the client to manage its stock effectively and generate
reports on sales and stock levels as per user requirement. The scope of project is defined in below
paragraphs and all the project work shall be delivered within the premises of this scope. The
project shall start on 1st January 2020 and deployment shall be handed over to the client on 30th
June 2020 where the client will take over the operations of SMRS and Oracle Solutions shall
provide after sales support and maintenance for a period of one year ending on 30th June 2021.

3.1 PROJECT PURPOSE AND JUSTIFICATION

The SMRS project has been approved to develop and deploy a Management Information System
(MIS) which shall provide store officials and management with an overview of stock and sales at
store and company level. The need for this project arises from a business opportunity where our

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company Oracle Solutions has been selected to complete this project on turnkey basis.
Successful completion of this project shall enable the client to effectively monitor and manage its
stock levels in each store. In addition to that, it will also allow the client to monitor its sales and
generate reports on sales and stocks as per requirement.

3.2 SCOPE DESCRIPTION

The scope of the project is to develop, deploy and after sales support and maintenance (for a
period of one year) of the SMRS. The SMRS shall include development, deployment and after
sale/deployment support and maintenance for a period of one year. There shall be three phases
of the project; development shall take 4 months, deployment 2 months and support for a period of
one year. Overall this project shall be completed in period of one and half years from the project
start date. The development, deployment and support shall be provided by the project team
whereas the online webserver which is required for online processing and storage of data shall be
purchased from a third party for the duration stipulated in the contract with the client. Inclusion of
additional features and extended support and maintenance of SMRS are beyond the scope of this
project.

3.3 HIGH LEVEL REQUIREMENTS

The SMRS has been approved as a project of Oracle Solutions due to business opportunity and
for client due to business need. In order to meet the contractual obligations of Oracle Solutions,
which are an essential criteria for success of this project, the SMRS shall have to meet following
high level requirements;

a) A Stock Module which shall enable the store staff and management to enter and monitor stock
details. This module shall enable store staff and management to enter and view details such
as product information, stock levels in current store and overall stock levels in company.
b) A Sales Module which shall enable the store staff and management to enter and monitor the
sales details. This module shall enable store staff to enter details such sales counter
information, details of individual sales and bill correction.
c) A Reporting Module which shall enable the management to generate reports from the system
on stock levels, sales of individual store and overall company and periodic historical data
reports as per requirements. During this project, three report templates shall be finalized after
discussion with the clients and development of further report templates shall be outside the
scope of this project.
d) A Cloud Web Server to store and manage the data of the SMRS. The cloud web server shall
be purchased from the third party based on the requirement of the MIS. The client should be
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able to use the services of the web server for a period of six months after ending of after sales
support and maintenance period without incurring additional costs.
e) Training of the store staff and management to efficiently and effectively operate and manage
the SMRS.
f) The SMRS should be user friendly and would cater to the knowledge and skill of the store staff
for operating the system.
g) The system should be able to operate without overloading on medium specification operating
systems in store.
h) The SMRS should be able to cater to the needs of the client in terms of expansion in store
locations and products.
i) The SMRS should be able to compatible with common operating systems available in market
for a period of at least five years after deployment.

3.4 BOUNDARIES
The project includes all work associated with requirement gathering, planning, designing,
developing, coding, building, testing, troubleshooting, integrating, deploying, training of users,
purchasing online web server and after sales support and maintenance of SMRS. This shall also
require preparation of training material and onsite training of staff to operate SMRS.

Not included in the scope of this project are; stock information gathering (shall be provided by the
client in excel format), purchasing of web server services beyond the scope of this project, any
other features not included in the scope of this project.

3.5 DELIVERABLES
Following are the major deliverables of the project;

1. An operational, tested and integrated Stock Module as per the requirements mentioned in the
scope of work above.
2. An operational, tested and integrated Sales Module as per the requirements mentioned in the
scope of work above.
3. An operational, tested and integrated Reporting Module as per the requirements mentioned in
the scope of work above.
4. A valid and available Web Cloud Server as per the requirements mentioned in the scope of
work above.

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5. Successful completion of onsite training of all store staff of DAJ with submission and
acceptance of training manual by the start date of after sale support and maintenance period.
6. Successful completion of after sale support and maintenance for the duration of one year with
conformance to Service Level Agreement (SLA).

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Abdul Haseeb

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WORK BREAKDOWN STRUCTURE

SMRS

Stock Module Sales Module Web Cloud Server Training Support

Reporting Module
D 1.0 D 2.0 D 4.0 D 5.0 D 6.0
D 3.0

Development Deployment Development Deployment Procurement of Troubleshooting

Development Deployment Server Training Manual and Maintenance
D 1.1 D 1.2 D 2.1 D 2.2
D 3.1 D 3.2 WP 4.1 WP 5.1 WP 6.1

Requirement
Gathering Testing on Internal Requirement Testing on Internal Configuration of
Gathering Requirement Testing on Internal
Server Server Server Staff Training
WP 1.1.1 Gathering Server
WP 1.2.1 WP 2.1.1 WP 2.2.1 PP 4.2 PP 5.2
PP 3.1.1 PP 3.2.1

Coding and
Development
Coding and Coding and Deployment on
WP 1.1.2 Deployment on Development
Deployment on Development Cloud Server
Cloud Server Cloud Server
WP 2.1.2 PP 3.1.2 PP 3.2.2
WP 1.2.2 WP 2.2.2

Integration of Stock
and Sales Module
into Reporting
Module
PP 3.1.3

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Project Introduction

Abdul Haseeb

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Table of Contents
REVISIONS................................................................................................................................................ 11
1.0 INTRODUCTION ..................................................................................................................................... 12
1.1 PURPOSE................................................................................................................................................ 12
2.0 COST MANAGEMENT ROLES AND RESPONSIBILITIES ............................................................................ 12
2.1 PROJECT DIRECTOR ............................................................................................................................... 13
2.2 PROJECT MANAGER............................................................................................................................... 13
2.3 PROJECT CONTROL ACCOUNTS MANAGER ........................................................................................... 13
2.4 PROJECT SPONSOR ................................................................................................................................ 13
3.0 COST MANAGEMENT APPROACH.......................................................................................................... 14
3.1 PROJECT COST TOOL.............................................................................................................................. 14
3.2 MEASURING PROJECT COSTS ................................................................................................................ 14
3.3 COST MANAGEMENT PROCESSES ......................................................................................................... 14
3.3.1 PROJECT COST ESTIMATION ............................................................................................................... 14
3.3.2 PROJECT BUDGET DETERMINATION .................................................................................................. 15
3.3.3 PROJECT COST CONTROL .................................................................................................................... 15
3.3.3.1 UNITS OF MEASURE......................................................................................................................... 15
3.3.3.2 LEVEL OF PRECISION ........................................................................................................................ 16
3.3.3.3 LEVEL OF ACCURACY ....................................................................................................................... 16
3.3.3.4 CONTROL THRESHOLD..................................................................................................................... 16
3.3.3.5 CONTROL ACCOUNTS ...................................................................................................................... 16
3.3.3.6 PERFORMANCE MEASUREMENT AND CONTROL ............................................................................ 16
4.0 COST REPORTING .................................................................................................................................. 17
4.1 COST VARIANCE PROCESS ..................................................................................................................... 18
4.2 COST CHANGE CONTROL PROCESS ....................................................................................................... 18
4.3 CHANGE DOCUMENTATION .................................................................................................................. 19
5.0 ACCEPTANCE ......................................................................................................................................... 19
GLOSSARY .................................................................................................................................................... 20

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COST MANAGEMENT PLAN

REVISIONS
Revisions
REVISION DESCRIPTION OF AUTHOR EFFECTIVE DATE
CHANGE

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1.0 INTRODUCTION

The cost management plan describes the techniques through which costs associated with SMRS
project will be managed throughout the project lifecycle. This Cost Management Plan sets the
templates, formats and standards for measurement, reporting and control of cost. These
templates, formats and standards shall be adhered to by all project team members and key
stakeholders to ensure successful completion of SMRS project within the allocated budget.

1.1 PURPOSE

The purpose of this cost management plan is to assign all the responsibilities and roles for all
individuals involved in the cost management of the project including who has the authority to
approve changes to the project, its budget or sources of funding. The plan will set all the
procedures which are used in this plan as well as in cost estimations and making budgets. This
plan includes all the information or details and format of reporting, indicating tools and control to
be used in this project for managing the cost. This plan will also set units of measure to be used
while handling costs and Earned Value Management (EVM) tool to be used to track progress of
the project in term of cost.

2.0 COST MANAGEMENT ROLES AND RESPONSIBILITIES

The Project Manager shall work in close coordination with Project Director to define various roles,
expectations and milestones for resources involved in the project. The Project Manager shall be
responsible for overall management of the project including the cost for the duration of the project.
There shall be regular monthly meetings during the development and deployment phase of the
project where project manager shall present to Project Director and company management overall
progress of the project and cost performance. During after sales support period, these meetings
shall be held on quarterly basis. Cost performance shall be measured in terms of Earned Value.

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The Project Manager shall also be responsible for accounting and managing of cost deviations
from the allocated budget and shall present strategies to management and Project Director to
bring the project cost within the allocated budget. The Project Director has the authority to make
changes to the project to accommodate it in the budget.
This part of the plan explains the roles and responsibilities of all the key participants of the cost
management process for whole project.

2.1 PROJECT DIRECTOR

The Chief Executive Officer (CEO) of Oracle Solutions shall be acting as the Project Director for
the duration of this project. His main responsibilities involve approving Cost Management Plan
and allocate budget for the project. He shall also be acting as the approving authority for all
Budget Change Proposals requested by the Project Manager.

2.2 PROJECT MANAGER

The Project Manager is the key person in the Project Cost Management. His responsibilities for
the project in terms of the project cost management shall involve managing and tracking project
costs to ensure that project work being done, and costs being incurred are in alignment with the
Project Cost Management Plan. The Project Manager shall work closely with the Project Finance
Officer to effectively manage the project cost. The Project Manager shall however, be overall
responsible for project cost and drafting Budget Change Proposal to be approved by the Project
Director and company management.

2.3 PROJECT CONTROL ACCOUNTS MANAGER

The Project Manager will also work as a Control Accounts Manager and will also be responsible
for come up with funding requirements for different activities or work packages and for tracking
expenses and staff efforts at lowest level possible.

2.4 PROJECT SPONSOR

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DAJ Corporation is the sponsoring organization of Stock Management and Reporting System and
is responsible for providing contractually agreed financial resources for project completion. The
funds for the project shall be released to Project Manager by the Project Director.

3.0 COST MANAGEMENT APPROACH

The project costs shall be controlled and managed at one level above the Work Packages. Further
delegating the cost control shall require excessive effort and cost of management which shall
exceed expected benefits.

3.1 PROJECT COST TOOL

MS Excel shall be used as project cost tool for all workings like estimation, budgeting and variance.
Graphs shall be used to show project cost, earned value and variance. All the documents related
to project shall be treated as confidential and shall not be shared with third parties without prior
consent of the management.

3.2 MEASURING PROJECT COSTS

Project cost will be managed and controlled through Earned Value Management. The Project
Manager will ensure that all key members that are involved in cost management should have
sufficient knowledge of this tool and have proper training/refresher courses if required.

3.3 COST MANAGEMENT PROCESSES

After approval of Cost Management Plan by the Project Director, the Project Manager shall ensure
completion of following processes according to the specified time, mentioned against each;

3.3.1 PROJECT COST ESTIMATION

The Project Manager is overall responsible for the cost estimation of the project. Cost estimation
shall be completed for all available Work Packages of the project latest by 10th January 2020. Cost
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estimation for Planning Packages shall be completed latest by 5 working days after it is
established that these Planning Packages can now be converted into Work Packages with
reasonable assurance. Project costs shall be estimated using top down approach along with
Expert Judgement and available budgeting data for similar projects done by the company in the
past (OPAs).

3.3.2 PROJECT BUDGET DETERMINATION

Project budget forecast management plan will be completed by 15th January 2020 and Project
Manager shall be responsible for managing the budget in accordance with this Cost Management
Plan.

3.3.3 PROJECT COST CONTROL

Project Manager shall monitor the entire plan. Following are the controls or tools which will be
used on Cost Management Plan.

3.3.3.1 UNITS OF MEASURE

Following units of measure will be used in this project

a. Human resource cost will be calculated using the workdays.
b. Cost of consumables shall be used based on their actual purchase price and usage
c. Cost of Web Cloud Server shall be measured in Pakistani Rupee (PKR) after
conversion based on the actual purchase date.
d. Cost of overheads like usage of company servers for internal testing, utilities and office
space shall be measured using percentage of project human resource cost. As per the
company practice, overheads shall be charged at 10% of the human resource cost.
e. All monetary resources shall be measured in PKR.

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3.3.3.2 LEVEL OF PRECISION

In this project, the criteria of rounding off amounts will be as follow:

1. If an amount comes out to be with a decimal place less than 5 then it will be rounded off to be
previous number.
2. If the number in decimal place is equal to or greater than 5 than it will be rounded off to the net
number. For example, 5.7 will be rounded off to 6.
3. Each activity cost will be rounded off to the net whole figure in thousand places.

3.3.3.3 LEVEL OF ACCURACY

The level of accuracy for this project is +-5%.

3.3.3.4 CONTROL THRESHOLD

The accepted threshold level of this project is +5%. If cost starts exceeding the threshold level
than there will be the need of changed the budget in order to control cost.

3.3.3.5 CONTROL ACCOUNTS

The criteria for control accounts in this project are that:

• A control account cannot handle more than one deliverable.
• We have six deliverables so our control accounts would be six in our project.
• Project Control Accounts Manager will be the entity dealing with all of those accounts.

3.3.3.6 PERFORMANCE MEASUREMENT AND CONTROL

Performance of the project will be measures using Earned value Management. The following
earned value metrics will be used to measure to project cost performance
1. Schedule Variance
2. Cost variance

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3. Schedule Performance Index (SPI)

4. Cost Performance Index (CPI)
If the SPI is less than one, it indicates that the project is potentially behind the schedule to date
whereas an SPI greater than one, indicates the project is running ahead of schedule. An SPI of
one indicates the project is exactly on schedule.
If the Schedule Performance Index (SPI) or Cost Performance Index (CPI) has a variance of
between 0.1 & 0.2, the project manager must report the reason for the exception. If the SPI or CPI
has a variance of greater than 0.2 the project manager must report the reason for the exception
and provide management a detailed corrective plan to bring the projects performance back to
acceptable levels.

Performance Measure Yellow Red

Schedule Performance Index Between 0.9 and 0.8 or Less than 0.8 or greater than
(SPI) between 1.1 and 1.2 1.2
Cost Performance Index (CPI) Between 0.9 and 0.8 or Less than 0.8 or greater than
between 1.1 and 1.2 1.2

4.0 COST REPORTING

Project Control Accounts Manager shall be responsible for preparing monthly expenditure report
in month wise and cumulative basis. These reports shall be shared with Project Finance Officer
and Project Manager. Furthermore, on completion of each deliverable, the Project Control
Accounts Manager shall draft an additional status report and share it with concerned functional
managers informing on resources which shall no longer be required for the project.

Reporting for project cost management shall be included in the monthly Project Status Report
(PSR). The PSR shall include a section labelled “Cost Management”. This section shall contain
Earned Value Metrices identified in the previous sections. All cost variances falling outside the set
thresholds will be identified and highlighted in this report along with proposed corrective measures.
Any Change Requests which are triggered based upon project cost overruns will be identified in
this report and shall be tracked in all later reports.

To track actual costs incurred against the cost baseline, following charts/reports will be used;

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a. Cost by WBS
b. Spending Plan
c. Cost Variance by WBS

4.1 COST VARIANCE PROCESS

In case the cost variance is higher than the set thresholds, the Project Manager shall present to
the Project Director options for corrective actions to be taken to get the project back on track in
terms of cost. These may include;

a. Increasing the budget internally for the project

b. Corrective measures that can be taken without compromising scope or quality of the
project
c. Proposition to ask for additional funds from the Project Sponsor

4.2 COST CHANGE CONTROL PROCESS

The cost change control process will follow the established project change request process.
Approvals for project budget/cost changes must be approved by the Project Director. For all
proposed changes, their impact on the overall project in terms of cost, quality, scope and their
relevant factors must be analyzed first.

Following Change Request Form shall be for obtaining approval of change:

CHANGE REQUEST FORM

Project: Request No:
Requestor: Reason:
Type:
Priority: Date:
Change Description
Description:
Justification:
Impact if not implemented:

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Alternatives:
Impact Analysis
(How the change shall impact the project and company in the following categories)
Scope:
Risk:
Schedule:
Budget:
Approvals
Approved/ Not Approved:
Authority:
Signatures: Date:

4.3 CHANGE DOCUMENTATION

Any changes proposed by the Project Manager will be made after approval from the Project
Director. All such changes shall be documented as per the below format. All project documents
which may be affected as a result of these changes shall be updated accordingly on regular basis.

CHANGE RECORD FORMAT

S. No. Change Change # Type of Initiator Date of Approving

Change Change Authority

5.0 ACCEPTANCE
Approved By:

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Date:

Project Director

Oracle Solutions

Prepared By:

Date:

Project Manager

Oracle Solutions

GLOSSARY

Cost Performance Index (CPI) measures the value of work completed against the actual cost of
work completed. CPI is calculated as EV/AC.
a. If CPI is equal to 1, the project is considered to be on budget.
b. If CPI is greater than 1, the project is considered to be under budget.
c. IF CPI is less than 1, the project is considered to be over budget.
Cost Variance (CV) is a measurement of the budget performance for a project. CV is calculated
by subtracting Actual Costs (AC) from EV. EV is the actual value earned in the project whereas
AC represents actual costs incurred to date. Subtracting AC from EV provides a measurement to
indicate the status of the project as it relates to budget and cost.

a. If CV is zero, the project is considered to be on budget.

b. If CV is greater than zero, the project is earning more value than planned as is considered
to be under budget.
c. If CV is less than zero, the project is earning less value than planned as is considered to
be over budget.

Schedule Performance Index (SPI) measures actual progress of project against the planned
progress. SPI is calculated as EV/PV.

a. If EV is less than PV then SPI is less than 1, which means project is behind schedule.

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b. If EV is greater than PV then SPI is greater than 1, which means project is ahead of
schedule.

Schedule Variance (SV) measures performance of the project in terms of time. It is calculated
by subtracting the Planned Value (PV) from the Earned Value (EV). EV is the actual value earned
in the project at any given time whereas the PV is the value indicated by project schedule tool
which the project should have earned at any given time. SV indicates status of baseline schedule
according to the project plan.

a. If SV is zero, the project is considered to be on schedule.

b. If SV is greater than zero, the project is earning more value than planned and is considered
ahead of schedule.
c. If SV is less than zero, the project is earning less value than planned and is considered
behind schedule.

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