Basic Costing of a
Project (Cloud)
• A project, as a whole is a temporary endeavor, it can also be refered to as a whole cloud or a dream undert aken to create a
unique product, service, or result. It has a defined beginning and end, specific objectives, and is designed to produce
deliverables wit hin certain constraints such as scope, time, and budget (also known as costing of project ). Here are the key
characteristics and components of a project:
• Core Components
• 1. Project Scope:
• Defines what the project will and will not include. It encompasses the project’s deliverables, requirements, and boundaries.
• 2. Project Schedule:
• Outlines t he timeline of the project, including start and end dates, milest ones, and key activities.
• 3.Project Budget:
• Details the financial resources required for the project, including cost estimates for all project activities and resources.
• 4. Resources:
• Encompasses all the manpower, equipment, materials, and other assets needed to complete t he project.
• 5. Stakeholders:
• Individuals, groups, or organizations with an interest in the project’s outcome. This includes the project team, sponsors,
customers, and other affect ed parties.
.
• 6. Project Management:The application of knowledge, skills, tools, and techniques t o project activities t o meet the project
requirements. This includes planning, executing, monitoring, and closing the project
What is a Project as a whole?
• 1. Initiation:
• Defining the project at a high level, identifying stakeholders, and obtaining authorization to
proceed.
• 2. Planning:
• Developing detailed plans to guide the project’s execution and control. This includes defining
the scope, schedule, budget, quality, resources, and risk management plans.
• 3. Execution:
• Carrying out the project plan by performing the project activities. This phase involves
coordinating people and resources and managing stakeholder expectations.
• 4. Monitoring and Controlling:
• Tracking, reviewing, and regulating the progress and performance of the project. This phase
involves identifying any necessary changes and implementing corrective actions.
• 5. Closing:
• Finalizing all project activities, obtaining acceptance of deliverables, and closing project
contracts. This phase also includes conducting a post-project evaluation to capture lessons
learned.
Phases of a Project
Deciding 1 2 3 4 5
the
‘Budget’ Costing of a
project refers to
the process of
estimating,
Direct Costs:
These are costs
directly
attributed to the
Indirect Costs:
These are
overhead costs
that are not
Variable Costs:
These costs vary
with the level of
project activity,
Fixed Costs:
These are costs
that remain
constant
Or
allocating, and project, such as directly linked to such as costs of regardless of the
controlling the labor, materials, a specific project raw materials level of project
costs associated equipment, and activity but are and hourly labor. activity, such as
with a project. It other resources necessary for rent and salaries
‘Costing
involves that are project of permanent
identifying all the specifically used completion. staff.
expenses that for the project. Examples include
will be incurred administrative
from the start to expenses,
of a
the completion utilities, and
of the project. office supplies.
The key
components of
Project’
project costing
include:
Cost Budgeting: Allocating the
Cost Estimation: Determining estimated costs to specific
the approximate cost of each parts of the project and
component of the project using creating a detailed budget that
various estimation techniques. outlines how much will be
Process spent and when.
of Project
Costing Cost Control: Monitoring actual
expenditures against the
budget, analyzing variances,
and taking corrective actions to
ensure the project remains
within budget.
Effective project costing helps in
Optimizing the costing of a project
achieving financial efficiency,
without compromising its quality or
minimizing waste, and ensuring that
scope involves strategic planning,
the project is delivered within the
efficient resource management, and
allocated budget, thereby
continuous monitoring. Here are
increasing the likelihood of project
several strategies to achieve this:
success.
Effective
Project Risk Management: Identify potential
risks early and develop mitigation
Costing
Negotiate with suppliers for better strategies.Value Engineering:
rates or bulk discounts.Consider Analyze project components to
alternative suppliers or materials identify cost-saving opportunities
that provide the same quality at a without compromising quality or
lower cost. functionality.Implement design
changes that achieve the same
outcomes at a lower cost.
•
