Project management is a plan management method developed in the late 1950s. Because of its remarkable effect, it has been widely used in aerospace, aviation, national defense, architecture, finance and other fields since the 1960s. Especially in the construction industry, in recent years, the combination of project management technology and theory with China's national conditions has achieved fruitful results, such as Xiaolangdi Project and Three Gorges Project. Many large-scale construction enterprises have effectively utilized various resources because of the introduction of project management technology, and each project has achieved maximum benefits, and enterprises have developed rapidly.
As we all know, the successful realization of project objectives is influenced by four factors: scope of work, cost, progress and quality. Among them, project cost management, that is, project cost management in a broad sense, as a part of the nine knowledge systems of project management, is attracting more and more attention from many managers because it plays a very important role in the successful implementation of project objectives in the process of project management. However, all aspects of project management are complementary, and it is impossible to successfully complete the project only by paying attention to any one of them. The same is true of cost management. Only by applying other related project management technologies to project cost management can the project cost be effectively controlled and the project be successfully completed.
1 application of project scope management in project cost
1. 1 the concept of project scope management
A project is a one-time effort to complete a product or service, so the concept of scope includes two aspects. One is the product scope, that is, the features or functions contained in the product or service; The other is the scope of the project, that is, the work that must be completed to deliver products or services with specified characteristics and functions. When determining the scope, we must first determine what is ultimately produced and what features it can clearly define. It should be noted that the characteristics must be clear and expressed in an approved form, such as words, charts or certain standards, which can be understood by project stakeholders and must not be ambiguous. On this basis, we can further clarify what needs to be done and produce the required products. In other words, the product scope determines the project scope. The premise of cost management is the determination of project scope and scientific management. Once the project scope is determined, according to the relevant? Cost calculation rules, the cost is initially determined. This is also the key to cost control and future cost baseline. For construction projects, initial project bidding, tender documents, engineering drawings, etc. It is the basis for determining the scope of the project.
1.2 project scope management method and its influence on cost control
The basic contents of project scope management include: scope planning, scope definition, scope verification and scope change control, among which the most important relative cost control is scope definition and scope change control. The key of the scope definition output is the work breakdown structure (WBS), that is, according to the project objectives, a project is decomposed into manageable parts or details to ensure that all the work elements needed to complete the project scope are found. It is a hierarchical tree of the final details to be completed and produced by the project team during the project. Work breakdown structure (WBS) is the basis of the following work: confirm integration and coordination; Confirm the time and progress; Identify risks and decision-making impacts; Determine the organizational structure of this project; Clarify the project cost composition and total cost; Clear work package matrix; Confirm working methods and prepare accounting instructions; Determine the quality composition of the project and establish the quality benchmark; Basis for making communication plan; The basis for making purchasing plan, etc. The above parts are inseparable from the project cost, that is, the total project cost. Therefore, WBS is the basis of cost control. According to the WBS structure diagram, the resource requirements of each work package can be calculated according to the resource requirements and the corresponding resource unit price, such as labor, raw materials, machinery use, subcontractors and corresponding travel and transportation expenses. In cost estimation, analogy estimation method, parameter model method and bottom-up estimation method according to WBS can be used. At the same time, the cost management plan explains how to manage the cost deviation, reflects the scope of the project from the perspective of funds, and indirectly manages the cost by using the scope management method. The two complement each other and restrict each other, and at the same time form part of the project plan.
After cost estimation is made according to the work breakdown structure, the cost budget should be made again according to the work breakdown structure and risk management plan, that is, each element of the total project cost should be assigned to the appropriate work package in the work breakdown structure, and the total budget cost (TBC) should be established for each work package. There are also top-down and bottom-up methods to establish TBC. The resulting cost budget is the key output of cost control-cost baseline. The cost benchmark plan is a phased budget used to measure and monitor cost performance. Its expression is the familiar S curve, and the abscissa represents time. Cost benchmark plan is the basis of earned value analysis, cost control, schedule and scope control. Usually, in the management of construction projects, most managers only pay attention to the separate management of progress, scope and cost, but ignore the organic combination and comprehensive management of all aspects of the project, and fail to pay attention to the deviation of scope and progress in cost management.
Another important process of scope management is scope change control. Scope change control is the factor that affects the change, determines whether the scope change occurs, and manages the change when it occurs. At this time, scope change management does not simply involve scope change, it will cause a series of changes in project content, including project objectives such as schedule, quality and cost. The scope of a project may be well planned, but it is almost impossible to change it. Change is not bad, what is bad is the lack of standardized change management process. There are many reasons for the change of the scope, such as the user's request to increase the product function, the environmental protection problem leading to the modification of the design scheme and the increase of the construction content. In the process of scope management, we must analyze and predict possible scope changes by monitoring performance reports and current progress, and follow standardized change procedures to manage changes when changes occur. ? Standardizing and mastering the scope change management is to seize the source that affects the project objectives, and at the same time, it can effectively control costs. According to the procedure of scope change, we should grasp the cost change caused by it in time, so as to control the project cost in an all-round way, instead of controlling and managing the project cost in isolation and unilaterally.
2 Application of project time management in project cost
The time management of the project is also the schedule and duration management of the construction project in our usual sense. For modern construction enterprises, project managers pay more attention to the time limit and progress of construction projects, and finishing on time or even ahead of schedule is an important magic weapon in project bidding. However, the project manager often ignores that behind the abnormal and reasonable construction period, the project cost is often greatly increased. Project cost and duration are a pair of closely related basic factors. In project management, "time is money" is an irrefutable truth, because the advance or delay of the construction period will bring completely different consequences to the project. As far as project management is concerned, the cost management method without considering the influence of construction period on cost and the time management method without considering cost are unscientific. Therefore, the comprehensive management and application of project duration and cost should be carried out. This requires that the duration and progress of the project cannot be considered separately when formulating and implementing the project duration plan. The cost factor of the project must also be considered. According to the general law given by the project management research, the relationship between the project duration and the cost presents an "S" curve, as shown by the line 1.
Figure 1 Relationship between project duration and cost
The three "S" curves given in figure 1 respectively represent the project duration and cost index of three different schemes. Among them, P 1 scheme has short construction period (T 1) but high cost (C1); P2 scheme has long construction period (T2) but low cost (C2); The construction period and cost of P0 scheme are between P 1 and P2 scheme. Therefore, in the process of determining and controlling the project cost, we must make a choice according to the actual situation of the project. For example, if the project is in urgent need and the enterprise can bear it, P 1 scheme can be selected; Otherwise, P2 scheme should be selected. How to deal with the relationship between construction period and cost is an important topic in construction project cost management, that is, for construction enterprises and construction project management departments, the management and control of construction period cost is not as short as possible, but to find the best construction period cost by reasonably adjusting the construction period and control the construction period cost at the lowest point.
The "cost/duration control system specification" and earned value management method proposed by the US Department of Defense are advanced methods to comprehensively control the project duration and cost. Professor Abba, a famous American project analyst, defines earned value variable as: "earned value is a measure made by comparing the planned value and actual value of completed and unfinished operations of a project." It can be seen that the obtained value variable is actually an intermediate variable, representing the value of the completed work (project progress), and its formula is as follows:
Earned value (earned value EV)= actual quantity of completed work × budgeted cost of completed work.
According to PMBOK (2004), SV = EV-PV, where SV stands for schedule deviation; EV stands for earned value, that is, the budgeted cost actually completed by planned activities or WBS components in a given period of time; PV represents the planned value, that is, the budgeted cost of planning to complete the activity or WBS component work before a given point in time. When SV>0 indicates that the progress is ahead, SV
3 the application of project quality management in project cost
3. 1 The concept of project quality management objectives and quality cost
The quality of the project is another important link in the success factor of the project. Ensuring quality is the key to enterprise reputation. However, the higher the product quality, the better. If it exceeds a reasonable level, it belongs to excess quality. According to PMBOK's point of view, the goal of quality management is to meet the specification requirements and applicability, not Nuojin film, to meet the customer requirements agreed by both parties. Therefore, whether the quality is insufficient or excessive, it will increase the quality cost, which should be adjusted through quality cost management. Quality management includes quality planning, quality assurance and quality control, in which the concept of quality cost is mentioned. Quality cost is the engineering cost to ensure the engineering quality. Quality cost is divided into prevention cost, appraisal cost (appraisal evaluation, the purpose of which is to confirm quality and process) and failure cost (failure, cost caused by correcting mistakes). Failure costs are divided into internal costs and external costs, and the relationship between them is shown in Figure 2.
Fig. 2 best quality cost model diagram
As can be seen from Figure 2, the total quality cost curve is the sum of failure cost curve and prevention and identification cost curve, and its lowest point K is the best quality cost. The goal of quality cost management is to make the combination of three quality costs reach the lowest value K. As can be seen from Figure 2, the cost of quality prevention is low at first, and will gradually increase with the improvement of quality requirements. When the quality reaches a certain level and then requires improvement, the cost will rise sharply. The cost of quality appraisal is relatively stable, but it will increase to some extent with the improvement of quality. However, the price of quality failure is not. At first, due to poor quality, the loss was great, and with the continuous improvement of product quality, the loss gradually decreased. The interaction of the three will inevitably find an ideal point K with the lowest quality cost, and this point is the criterion for us to control the project cost.
Correctly handle the relationship between several aspects of quality cost, that is, the relationship between quality failure cost (internal and external failure loss), prevention cost and appraisal cost, and take scientific, reasonable, advanced and practical technical measures to reduce the engineering cost as much as possible on the premise of ensuring the construction quality to meet the design requirements. In order to improve the reputation and market competitiveness of enterprises, the project must not exceed the quality in an all-round way, resulting in a passive situation of completing a lot of engineering work but low economic benefits. On the premise of meeting customer requirements, providing suitable products at reasonable cost is the ultimate goal of our project management technology.
3.2 Integrated management method of engineering quality and engineering cost
The integrated management and control of project quality and cost needs the help of value analysis method, and through the value analysis of project output, the integrated project quality and cost scheme that can make the enterprise obtain the maximum value is finally determined. The value analysis method of project quality and cost includes the following contents.
First of all, according to the value principle, there is a formula: v = f/c.
Where: v represents the value of the project output; F represents the output function; C stands for the price or cost of output. Because the quality of any project output can be expressed by the output function (F), the quality and function of the project output are usually equivalent, so F here can also be understood as the quality of the project output (or the quality of the project itself).
According to the above formula and analysis, the increase of the value of the project output (or the project itself) can be realized by two basic ways: increasing the function of the project output and reducing the project cost, and other ways derived from these two basic ways. For example, the function and cost are reduced at the same time, but the function is slightly reduced and the cost is greatly reduced; Or increase the function and cost at the same time, but the cost increase is small and the function increase is large. These are the methods to improve the project value, and also the methods to be followed and adopted to comprehensively control the project quality and cost. Using these methods to comprehensively consider and arrange the project quality and cost, we can determine the economic quality index and reasonable cost index of the project, and then we can reasonably determine the project cost consistent with the quality.
4 Comprehensive management of all elements of the project
The influence of project scope, duration and quality on cost control has been discussed above, but project management cannot manage project scope, duration, cost or quality separately, because project scope, cost, duration and quality are several directly related and interacting related elements. The change of project scope is an important factor affecting the project duration and cost; The advance or lag of the project duration will directly affect the project cost; Project quality will cause direct fluctuation of project cost; The project cost will directly affect the construction period and quality of the project. Therefore, project management must simultaneously integrate all the elements of project scope, duration, cost and quality.
According to the earned value principle: SV = EV-PV; CV=EV-AC, with the help of the intermediate variable of the obtained value (EV= actual completed workload × budgeted cost of completed work), we can get the deviation information generated by the interaction of project duration, quality and cost, analyze the planned completion of project duration, cost and quality, and then predict the influence of project status on future development, and carry out effective comprehensive project control accordingly.
5 concluding remarks
In a word, the characteristics of the project require that its management must adopt the method of comprehensive integrated management. However, the existing project management methods in China have the problem of separation of time limit, cost and quality management. In order to improve the performance of the project and the value of the project output, and effectively control the project cost, it is necessary to deeply understand the restriction and integration relationship between the elements of the project. If cost management is carried out unilaterally, it is impossible to effectively control the project cost. Only by adopting the method of comprehensive management of all elements, effectively using project management technology and earned value principle, distinguishing and obtaining the information of mutual influence of all elements, formulating corrective measures and effectively controlling the project, can the goal of project management be truly realized: providing customers with the lowest reasonable price.
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