Change Management Process

1.  Design a change management process as if you were at the beginning of the project — which is when a change management procedure should be designed!  Identify  the “triggers” that signal  the need to re-examine any of the baselines.  Define any paperwork or other communication that needs to happen when one ( or more) of these triggers occur.  Then outline the procedure that should be followed to approve or reject a change.  Write this up as you would any typical SOP ( Standard Operating Procedure) in your Project Plan ( in the section on Integration Management)

2.  Your project is going along fine.  Then it hits!  One morning you come in and find that the network lines laid in by your team in Boston have been cut!.  Boston was a site that needed major reconstruction to get the offices ready for occupation.  Seems you are using non-Union labor.  You need to pacify the Union laborers who are in the building putting in the electrical lines as part of the reconstruction.  At about the same time, the CEO comes by to ask that the software consolidation effort should now include a system for identifying and managing “prospects”, i.e. people or organizations that are not yet Fishers customers, but who have highly unique insurance needs.  This was not in the original “ask” from him.

Walk through your Integrated Change Management procedure ( the “SOP”)   and describe how these issues will be addressed procedurally. Include all decision points, activities and examples of  documents used.

Running head: COST MNAGEMENT PLAN
Cost Management Plan
ITC 4500
Bokai Zhang
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COST MANAGEMENT PLAN
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INTRODUCTION
The Manager of this project must monitor and report the costs involved with such a
project from the very beginning to the final production. This is the responsibility of the project
manager to consult with the management and include a follow-up on any cost improvement
improvements for the preceding month. Performance; certainly, will be calculated using the
value earned under this project.
The owner of the Projects must take responsibility for cost variations to the accounts. He
will be able to think extensively and offer options to the sponsors that can bring the project under
budget. For this situation, it is the sponsor who will make improvements to the project, under the
direction of the Project Manager, to get it under budget.
COST MANAGEMENT APPROACH
Cost management for these projects shall be at the stage of the 4th Job Breakdown
Structure ( WBS). Monitor Accounts would be performed to monitor the costs. Earned Value for
the Control Costs shall measure the performance and management of the finances within the
project. Estimating the costs of the activities is a detailed task in the work packages.
The precision of the expenditure is at WBS level 4. Job Credit is being distributed at the
work kit stage. Performance on work packages would award the project work with just a 50 %
credit; and the remaining 50 % will be paid when the tasks listed in the project schedule are
completed. You can round Man, Hours and Costs to the nearest integer.
Application of a 0.1 + or – in schedule and cost performance will render the index of cost
cautionary. These types of costs shall be given a highlight color to easily identify them. Cost
COST MANAGEMENT PLAN
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Variances a 20% plus or minus in the schedule and cost management. The index status changes
to a red highlight in the project reports status. To get all this below the level of the warning, the
competent Project Manager needs to take corrective measures before it can become part of the
scope of the project.
MEASURING PROJECT COSTS
Project efficiency is assessed using EVM. The following four measures of Earned Value
would be used to calculate the cost-efficiency of projects Schedule Variance, Cost Performance
Index, CV, and Schedule Performance Index.
If SPI /CPI variance falls between 0.1 and 0.2, the Project Manager then reports reasons
for such exceptions. The project manager reports the exception reasons to the sponsors if the
variance is > 0.2. this is where he will give possible solutions to try and bring the project under
cost.
Performance Measure
Yellow
Red
Cost Performance Index (CPI)
Between 0.9 and
Less Than 0.8 or
0.8 or Between 1.1 and Greater than 1.2
1.2
Schedule Performance Index
(SPI)
Between 0.9 and
Less Than 0.8 or
0.8 or Between 1.1 and Greater than 1.2
1.2
COST MANAGEMENT PLAN
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REPORTS
A monthly status report is to be submitted to the sponsors. To be included will be cost
management. Under this, we will include, Cost Management. Previously identified Earned Value
metrics are included. Corrective actions shall be taken and reported for any cost variance beyond
what is expected and outlined. The report will also handle change requests as a whole.
COST VARIANCE RESPONSE PROCESS
SPI control threshold of greater than 1.2 or less than 0.8. if the project is close to one of
the thresholds, a cost valiance plan of action is taken to make the necessary corrections. In under
5 working days, since the threshold is reported, the PM updates sponsors on recovery
mitigations. The project sponsor responds within a time frame of 3 working days. The sponsor is
presented by the project manager, a working corrective plan of action.
The corrective action plan outlines the mitigating measures needed to keep the project in
budget. Also, it outlines the pros and cons of the actions. The CV corrective plan is integrated
into the project plan upon acceptance.
COST CHANGE CONTROL PROCESS
Approval of budget adjustments based on cost increases will meet due process and have
the sponsor approved it.
BUDGET
Below is the project’s budget.
COST MANAGEMENT PLAN
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FIXED COSTS:
AMOUNT IN $ DOLARS
MATERIAL COSTS
$ 2,000
CONTRACTOR COSTS
$ 350,000
TOTAL PROJECT COST
$ 350,000
MANAGEMENT RESERVE
$ 100,000
COST MANAGEMENT PLAN
ACCEPTANCE BY THE SPONSOR
This Cost Control Program is approved by Project Sponsor as:
Name:
Date:
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