Sample cost control training proposal

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do you need special training course in Oil & Gas? see this and contact me for more info: sadegh.yazdani@ nodoc. eu

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Sample cost control training proposal

  1. 1. Cost Management Training & Certification Catalogue 2013 Tailore-Made Tailor-made Courses Tailor-made courses are designed to meet the specific requirements of your staff and organization. They can be delivered at your preferred location and date(s), and are thus a very cost effective solution if there is a large group of staff to be trained. They can take several forms:  A training course focusing on the specific situation, challenges and opportunities facing your organization  Combining modules from our different standard courses to meet your unique learning and development requirements  Develop a completely new course to precisely address your development requirements for more information Contact nodoc@nodoc.eu or visit www.nodoc.eu Dione Oil Co.
  2. 2. Cost Management Training & Certification Catalogue 2013 Tailore-Made Course Dione Oil Co. 1. An Introduction to Dione Oil Cost Management Model In the project development cycle several engineering tasks like design, procurement and construction have to be executed. The execution of these tasks mainly involves information processing and decision-making. Because costs are an important factor in project management, adequate information about costs is extremely valuable for all engineering tasks. Therefore, a cost training programme for the enhancing of cost knowledge for cost management and cost control, integrated in the project development cycle, is required. The Oil & Gas Project Costing Reference Model developed at Dione Oil Co., is based on the use of a central information management kernel that facilitates both the availability and the accessibility of meaningful representations of the evolving project information. This reference model is designed especially for the integration of practice, knowledge, technology and art for the development of the cost management system. Within the Oil & Gas Project Costing Reference Model, generic cost management architecture has been developed. The architecture consists of six functional modules arranged 2
  3. 3. Cost Management Training & Certification Catalogue 2013 Tailore-Made Course Dione Oil Co. around the information kernel of the model that are: Cost Models, Cost Determination, Cost Control, Cost Monitoring, Cost Reports, Risk Analysis, Data Analysis and Data Tuning. The Cost Model module is used for the definition and the management of cost models. Multiple cost models can be defined in order to support all engineering tasks and to be able to compare cost models. Based on a cost model, the Cost Determination module calculates the costs. A cost model can be selected based on a specific cost model, or an integration of several cost models, the required accuracy or the available information. Cost Control, Cost Monitoring and Cost reports can be created with the Cost Report module. Information about the quality, the accuracy and the sensitivity of the costs has to be provided by the Risk Analysis module. The analysis of (historic) data is a task for the Data Analysis module, while the Data Tuning module has to tune data. A new method for variant based cost estimation is proposed and positioned in the architecture. The cost models are defined based on the cost structure. With the aid of the cost structure, costs can be defined for any object causing costs. Because cost structures can be attached to the information structures related to the Oil & Gas Project 3
  4. 4. Cost Management Training & Certification Catalogue 2013 Tailore-Made Course Dione Oil Co. Costing Reference Model, the costs can be calculated for any object at any aggregation level. Additionally, the cost structure enables the differentiated storage of cost information. Based on the information structures and the cost structures, cost views can be constructed. The cost models are defined based on the cost structure. With the aid of the cost structure, costs can be defined for any object causing costs. Because cost structures can be attached to the information structures related to The Oil & Gas Project Costing Reference Model, the costs can be calculated for any object at any aggregation level. Additionally, the cost structure enables the differentiated storage of cost information. Based on the information structures and the cost structures, cost views can be constructed. These cost views visualize the differentiated costs for the user. The cost architecture and the cost structure enable the use of four cost control loops: the engineering and planning feedback loop, the order acceptance feedback loop, the production feedback loop and the accounting feedback loop. Some parts of the cost architecture have been implemented in a prototype system. The prototype system is demonstrated by means of an example from the project development cycle in the project domain. Generative and variant based cost management is used to demonstrate cost support and cost 4
  5. 5. Cost Management Training & Certification Catalogue 2013 Tailore-Made Course Dione Oil Co. control. For generative cost management two distinct cost models, direct costing and activity based costing, are used. 2. The Cost Management Training Module (Tailor-made) This module has been developed specifically for úú based on the requisition datedú .. The training based is based on the Oil & Gas Project Costing Reference Model. The programme is to be aimed at the development of specific competencies of specialists engaged in Cost Control. The training module has the following specification: 2.1 Training Title: Cost Engineering and Cost Control for oil & Gas Projects 2.2 Training Description: The Oil & Gas projects Cost Management, what is it and why should we follow it? This training will define costs and identify its components to implementing management and control process. Participants will gain skills, strategies, techniques, and methods, by practice and knowledge development to implementing cost control in his own projects. 5
  6. 6. Cost Management Training & Certification Catalogue 2013 Tailore-Made Course Dione Oil Co. 2.3 Training Objectives As a result of this training, participants will be able to:  Define Costs  Classify of Costs  Split Costs to its Components  Manage the Costs using various Techniques  Analyze Production Costs  Manage the Costs  Report the Cost for decision making  Doing Planning and Scheduling  Monitoring the Costs by Variances  Regular Achievement Analysis 2.4 Duration Of the training: Five 5 days + 1 day for closing summary and evaluation 2.5 Training form  Workshop  Presentation  Project practice  Discussion  Brain Storm 6
  7. 7. Cost Management Training & Certification Catalogue 2013 Tailore-Made Course Dione Oil Co. 2.6 Assessment by result of the Training: Knowledge test Practical application Project work Reports on participants�progress will be issued after each module 2.7 Number of participants in one group: 15 employees 2.8 Training time schedule: Following table show the training time schedule that describes what will teach during the training period. 2.9 Training Material The participants will be provided by handouts, Dione oil & gas projects Cost management handbook and a DVD including sample projects. 2.10 Training place The training is assumed to be placed in Kazakhstan however it could be placed in UAE or UK. 7
  8. 8. Cost Management Training & Certification Catalogue 2013 Tailore-Made Course Dione Oil Co. 2.11 Course Trainers Our expert trainers of this course have minimum 20 years experience on cost engineering, cost management and cost control field. They are graduated from well-known colleges and had background on costing of the oil & gas projects in three sectors: upstream, midstream and downstream both offshore and onshore. They have 2,400 hours experience on training the attendees of such courses for more than 400 oil & gas organizations, entities and institutes. 2.12 Certification Successful Participants will be granted valuable certificates at the end of the training course after appraisal the customer. 2.13 Training Fee For this special course the trainng fee is Euro ..... per participant.  50 % of the fee should be paid to Dione Oil Co. account as advanced payment.  The balance should be paid to that account at the end of the training. 8
  9. 9. Cost Management Training & Certification Catalogue 2013 Day Time Tailore-Made Course Dione Oil Co. Content Outline Welcome and Introductions Introduction of instructor and participants. Review Training Objectives Day 1 Presentation Methods Introductions: Briefly introduce self, training objectives for training session, and training agenda. Exercise: Large Group Discussion: discuss the elements of costs that they have faced before. Exercise: Small Group: Divide participants in Give background information about Oil & Gas Project Cost three-four groups. Each group will 9:00 - 10:30 Management and Cost Definition select a project to complete handout 1 The Essence of Cost Management: and share the results. 1. Cost Management means taking into account everything we • Identify three attributes of project in know about how project develop and learn and matching that to their classrooms and explore the the content and strategies planned for the executer. teaching practices they think will 2. Cost Management means treating project as an individual, not as support these attributes. a cohort group. 3. Cost Management means treating project with respect— Large Group: reporters share one recognizing changing capabilities and having faith in project's project attribute and the related costs capacity to grow and produce the desired product. and identified by the group. 10:30 – 11:00 Break 9 Handouts/Material Presentation 1: definition of Costs Handout: project cost definition
  10. 10. Cost Management Training & Certification Catalogue 2013 Day Time 11:00- 13:00 Tailore-Made Course Dione Oil Co. Content Outline Presentation Methods Experiential learning. Cost Classifications:  according to the accountant standards: Capital Costs / Operating Costs  according to Nature or elements: Material Cost/Labor Cost/Expenses  according to Function: Production Cost/Selling & Distribution Cost /Administration Cost /RD Cost  according to Identifiably: Direct Cost/Indirect Cost  according to Behavior: Fixed/Variable/semi, fixed Variable  according Association with products: Product Cost/Period Cost  according to controllability: Controllable Cost/ Uncontrollable Cost  according to normality: Normal Cost/Abnormal Costs Small Group: participants will consider the practices they identified further. Asking the following questions: 1. Is this practice in keeping with what I know about Costs? 2. Does this practice take into account project’s needs? 3. Does this practice demonstrate project? Large Group: facilitate a summary discussion of the experience, focusing on how much information and understanding the group’s questioning created. 13:00- 14:00 Lunch Continue Classification of costs:  according to time: Historical Cost/Predetermined Cost  according To Relevance: Opportunity Cost/Relevant 14:00-16:00 Cost/Sunk Cost/Shut down Cost/Differential Cost/Imputed Cost/Out of Pocket Cost / Marginal Cost and replacement Costs 10 Handouts/Material Presentation 2: costs Classifications Handout: sample project cost classifications
  11. 11. Cost Management Training & Certification Catalogue 2013 Day Day 2 Time Tailore-Made Course Dione Oil Co. Content Outline Presentation Methods Experiential learning. Components of Costs Components of costs or cost elements are a hierarchical of costs that presents top-down (down- top) approach for budgeting, costing and finally decision making process. The participants will examine this topic in a real and live oil & gas project by gaining following knowledge. The four main components of costs are: (a) Prime Cost, (b) Works Cost, (c) Office Cost and (d) Total Cost.  Prime Cost: It consists of costs of direct material, direct labor and direct expense specifically attributable to the job. 9:00 – 10:30 This is also known as flat, direct or basic costs.  Works Cost: It comprises of prime cost and factory overheads, (cost of indirect material, indirect labor and indirect expenses related to factory works). This cost is also known as factory cost, production or manufacturing cost.  Cost of Production (Office Cost): It is the sum total of works cost and office and administrative overheads <Cost of indirect material, indirect labor and indirect expenses related to office works>. This cost is known as office cost. Small Group: participants will identify the costs of sample project by its components. Asking the following questions: 1. Is this practice in keeping with what I know about Costs components? 2. Does this practice take into account project’s specifications? 3. Does this practice demonstrate project's needs? Large Group: facilitate a summary discussion of the experience, focusing on how much information and understanding the group’s questioning created. 10:30 – 11:00 Break 11 Handouts/Material Presentation 3: costs Classifications Handout: sample project cost Components
  12. 12. Cost Management Training & Certification Catalogue 2013 Day Time Tailore-Made Course Dione Oil Co. Content Outline Project Cost Management and Techniques: Project cost management includes the processes involved in estimating, budgeting and controlling costs so that the project can be completed within the approved budget.  Cost Estimation: For estimating the cost of oil & gas EPCF projects we need to have some data on hand such as: o Enterprise environmental factors o Organizational Process Assets o Project scope statements o Cost breakdown structure vs. Work Breakdown Structure 11:00-13:00 o Project Cost management plan Some of the Techniques that will be explain in the workshops are: o Analogous estimating o Determine recourse cost rates o Bottom-up estimating o Parametric estimating o Project management Tools o Vendor bid analysis o Reserve analysis o Cost of quality 12 Presentation Methods Discussion: Participants will discuss key components in the DVD that displayed sample project techniques. Identify key aspects of cost management. Discuss any misconceptions they may have about cost management. Handouts/Material Presentation 4: cost Management Handouts : 1. Applying the Essentials of Cost Management (Sample) Exercise Using the video segment and 2. Applying the previously identified attributes as a Essentials of Cost reference, participants will identify a Management classroom problem or issue that needs (Practice) attention and develop a plan of action to correct. Ask for participants to share their Materials: problem/issue and plan of action to DVD correct understandings. Pre-printed sample projects Cost management
  13. 13. Cost Management Training & Certification Catalogue 2013 Day Time Tailore-Made Course Dione Oil Co. Content Outline Presentation Methods 13:00- 14:00 Lunch Continue Cost Estimation: Using the inputs and techniques, some other objects will obtain that are used in the next step of cost management, cost budgeting. Cost Estimation outputs are presented based on the method of estimation. For example followings are the outcomes:  Activity based cost estimates  Resource based cost estimation 14:00-16:00  Parametric cost estimation  Analogy cost estimation  Activity cost estimate supporting detail  Requested changes  Cost management plan (updated) 13 Participants will estimate the cost of sample oil & gas project and will discuss in groups about the estimated costs and will compare the results estimated by different groups. Handouts/Material
  14. 14. Cost Management Training & Certification Catalogue 2013 Day Tailore-Made Course Dione Oil Co. Time Content Outline  Cost budgeting Cost budgeting involves aggregating the estimated costs of individual cost elements in the cost centres or work packages to establish a total cost baseline for measuring project financial performance. In this step with some input information obtain from previous step (cost estimation) and applying the tools and techniques, budgeting will be done. For budgeting we need at least following Inputs: Day 3 9:00 – 10:30         Project scope statement Work breakdown structure Cost Breakdown Structure Activity cost estimate supporting detail Project schedule Recourse calendars Contract Cost management plan Using following techniques:     14 Cost aggregation Reverse analysis Parametric estimating Funding limit reconciliation Presentation Methods Handouts/Material Presentation 5: cost Participants will budget the cost of Budgeting the sample oil & gas project and will discuss in groups about the project budget and will compare the results budgeted by different groups. Handout: Review the example to illustrate the activity that is presented in a DVD
  15. 15. Cost Management Training & Certification Catalogue 2013 Day Tailore-Made Course Dione Oil Co. Time Content Outline Presentation Methods 10:30 – 11:00 Break  Continue Cost Budgeting Using the input information and techniques, some other objects will obtain that are used in the next step of cost management, i.e. cost controlling. 11:00-13:00 Cost Budgeting outputs:      Cost baseline Earned value Project funding requirements Cost management plan (updates) Requested changes 13:00- 14:00 Lunch 15 Handouts/Material
  16. 16. Cost Management Training & Certification Catalogue 2013 Day Time Tailore-Made Course Dione Oil Co. Content Outline  Cost controlling Cost controlling involves influencing the factors that create cost variances and controlling changes to the project budget. Cost controlling will also be done using some other input information obtains from previous step (cost budgeting) and applying the tools and techniques listed below: Necessary Inputs Information:  Cost Baseline 14:00-16:00  Project funding requirements  Performance reports  Work performance information  Approved change requests  Project management plan 16 Presentation Methods Handouts/Material Presentation 6: cost Controlling Handout : Review the example to illustrate the activity
  17. 17. Cost Management Training & Certification Catalogue 2013 Day Day 4 Tailore-Made Course Dione Oil Co. Time Content Outline Presentation Methods Continue Cost Controlling Techniques:  Cost change control system  Performance measurement analysis  Forecasting Project performance  Reviews Project management software  Variance management Output information obtains from cost controlling step are listed below: 9:00 – 10:30  Cost estimate (updates)  Cost baseline (updates)  Performance measurements  Forecasted completion  Requested changes  Recommended corrective actions  Organizational process assets (updates)  Presentation 7: Cost Controlling Participants will calculate the variances between planned and actual cost of the sample oil & gas project Handouts: Comparing the and will discuss in groups about the outputs of a controlled variances cost project sample that is delivered in DVD. Project management plan (updates) 10:30-11:00 Break 17 Handouts/Material
  18. 18. Cost Management Training & Certification Catalogue 2013 Day Tailore-Made Course Dione Oil Co. Time Content Outline Presentation Methods Handouts/Material Production Costs Production costs can be divided into two categories: Participants will separate the production costs, split them to the VARIABLE COSTS (direct) which are proportional to production. components of production cost of For followings are the items that are proposed as variable the sample oil & gas filed and will costs: discuss in groups about the production costs.  Raw Material 11:00-13:00  Direct Labor  Supervision  Maintenance  Utilities  Supplies  Royalties and Patents  Packaging & delivery 13:00-14:00 Lunch 18 Presentation 8: Production Costs Handouts: review DVD of sample production costs of the sample production costs.
  19. 19. Cost Management Training & Certification Catalogue 2013 Day Tailore-Made Course Dione Oil Co. Time Content Outline Continue Production Costs FIXED COSTS which are independent of production such as: 14:00- 16:00 19             Depreciation Property Taxes Insurance Credit (Financing) Other Obligations General Expenses Research and Development Public Relations Accounting and Auditing Legal Advice and Patents Administration and management costs Sale and distribution costs Presentation Methods Handouts/Material
  20. 20. Cost Management Training & Certification Catalogue 2013 Day Tailore-Made Course Dione Oil Co. Time Content Outline Presentation Methods Handouts/Material Monitoring by Variances Participants will monitor the cost of the sample oil & gas project and will calculate and will discuss in groups about the variances and will compare the results in different Schedule Variance (SV): Schedule Variance tells us groups. Variances tell us whether we are going in correct direction or we in wrong direction. Two types of variances in cost management are Schedule Variance (SV) and Cost Variance (CV). Day 5 9:00 – 10:30  that how much we are ahead of or behind the schedule. Schedule Variance (SV) is a measure of schedule performance on a project.  Cost Variance (CV): Cost Variance tells us that how much we are over or under the budget. Cost Variance (CV) is a measure of cost performance on a project. 10:30-11:00 20 Presentation 9: Monitoring by Variances Handouts: preparation of variances for the sample project submitted in a DVD
  21. 21. Cost Management Training & Certification Catalogue 2013 Day Tailore-Made Course Dione Oil Co. Content Outline 10:30-13:00 21 Time Understanding Planning and Scheduling The project management team uses a planning process group to plan and manage a successful project for the organization. The planning processes develop the project management plan and also identify, define and mature the project scope, project cost and schedule the project activities. The planning process group facilitate project planning across multiple processes. The following list identifies the processes the project team should address during the planning process to decide if they need to be done, and if so, by whom. The planning processes are listed below:  Develop project management plan  Scope planning  Scope definition  Create WBS  Activity definition  Activity sequencing  Activity resource estimating  Activity duration estimating  Schedule development  Cost estimating  Cost budgeting  Quality planning  Human resource planning  Communication planning Presentation Methods Handouts/Material Presentation 10: Small groups will plan and schedule Understanding Planning the sample project activities and will discuss if they have differences within and Scheduling groups. Handouts: Review the planning and scheduling of a sample project delivered in a DVD
  22. 22. Cost Management Training & Certification Catalogue 2013 Day Tailore-Made Course Dione Oil Co. Time Content Outline Presentation Methods       Risk management planning Risk identification Qualitative risk analysis Quantitative risk analysis Risk response planning Plan purchases and acquisition  Handouts/Material Plan Contracting 13:00- 14:00 Lunch Cost reports and decision making Reporting the cost of a project could be based on the project: 22 cost components Cost types Budget Phase Location WBS Cost Centers and elements Risks Resources  14:00- 16:00          Factors The participants divide to groups and prepare the reports for the sample oil & gas project. The reporter of each group presents the project cost report and others issue challenges to the reports. Presentation 11: cost reporting Handouts: DVD that contains sample reports
  23. 23. Cost Management Training & Certification Catalogue 2013 Day Tailore-Made Course Dione Oil Co. Time Content Outline Presentation Methods Closing Summary Review the purpose and content of Materials: the training. Ask participants what they learned as a result of the training Learning materials and how they will be able to use what they learned. Determine if there are still areas of misunderstanding and clarify where necessary. 9:00 – 10:30 Day 6 10:30 – 11:00 Break Assessment: Each participant will be given a written assessment and will be expected to achieve 80% to receive training certificate. Have participants complete the Participant Evaluation Form. Collect   Materials Learning Assessment Materials Participant Form 11:00-12:00 Evaluation Regular Achievement Analysis Personal Effectiveness module 18:00-21:00 Goodbye Party 23 Handouts/Material Evaluation

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