it is a ppt of project management cost control

2. Introduction:
 The Hospital Management System (HMS)
project aims to develop a comprehensive
software solution for a network of hospitals.
The project's scope involves designing and
implementing an integrated system to automate
various administrative and clinical processes,
including patient registration, appointment
scheduling, billing, inventory management, and
electronic health records. The primary
objectives of the project are to improve
operational efficiency, enhance patient care,
and streamline hospital workflows. The project
must be completed within 14 months and
adhere to the approved budget of $1.2 million.
The major constraints include the strict
budgetary limitations and the need to avoid any
cost overruns.

3. Resource
Planning

4. Human
Resources:
Identify and
categorize the
human resources
required for the
project,
considering their
roles and
responsibilities,
skills, and
estimated effort.
project coordination, budget management,
and stakeholder communication.
• Business Analyst: Gathers and analyzes
requirements, prepares functional
specifications, and assists in system testing.
• Software Developers: Involved in coding,
unit testing, and integration of different
modules within the HMS.
• Database Administrators: Responsible for
database design, performance optimization,
and data management.
• Quality Assurance Team: Conducts testing,
identifies defects, and ensures the software
meets quality standards.
• User Interface (UI)/User Experience (UX)
Designers: Design and develop the intuitive
and user-friendly interface for the HMS.
• Technical Writers: Create documentation,
user manuals, and training materials for the
HMS.
• System Administrators: Manage servers,
networks, and deployment of the software.
• Training and Support Staff: Assist in user
training and provide ongoing technical

5. Software and Hardware
Resources: Identify and categorize the software
licenses and hardware required for the project.
Software Licenses: Determine the software tools, development
environments, and frameworks needed for HMS development,
such as programming languages, databases, operating systems,
project management software, and version control systems.
Hardware: Identify the hardware infrastructure required,
including servers, workstations, networking equipment, and
testing devices.

12. Earned Value
Management

13.  Earned Value Management (EVM) is a project management technique that
integrates the measurement of project scope, schedule, and cost to assess
project performance. It provides a quantitative approach to evaluate how
well the project is progressing and to forecast its future performance. In the
context of your Hospital Management System project, EVM can be used to
assess the project's performance in terms of cost and schedule.
 To calculate the Cost Performance Index (CPI) and Schedule Performance
Index (SPI) using EVM, you need three key metrics:
 Planned Value (PV): Also known as the Budgeted Cost of Work Scheduled
(BCWS), PV represents the authorized budget for the work scheduled to be
completed up to a specific point in time.
 Earned Value (EV): Also known as the Budgeted Cost of Work Performed
(BCWP), EV represents the value of the work actually performed up to a
specific point in time.
 Actual Cost (AC): Also known as the Actual Cost of Work Performed
(ACWP), AC represents the total cost incurred in completing the work up to
a specific point in time.

14.  Let's calculate CPI and SPI
for a few tasks using the
provided information:
Analysing the current system:
PV = $7,680
EV = $8,000
AC = $8,000
CPI = EV / AC = $8,000 /
$8,000 = 1
SPI = EV / PV = $8,000 /
$7,680 ≈ 1.04
Planning the project:
PV = $5,625
EV = $5,700
AC = $5,700
CPI = EV / AC = $5,700 / $5,700 = 1
SPI = EV / PV = $5,700 / $5,625 ≈ 1.01
Purchasing hardware including logistics:
PV = $5,850
EV = $7,500
AC = $7,500
CPI = EV / AC = $7,500 / $7,500 = 1
SPI = EV / PV = $7,500 / $5,850 ≈ 1.28

15. Software (Managing the
project):
PV = $117,810
EV = $122,320
AC = $122,320
CPI = EV / AC = $122,320 /
$122,320 = 1
SPI = EV / PV = $122,320 /
$117,810 ≈ 1.04
By analyzing the CPI and SPI values, we can
make the following interpretations:
CPI = 1 indicates that the project is on track
with the planned budget.
CPI > 1 indicates that the project is
performing better than planned in terms of
cost.
CPI < 1 indicates that the project is over
budget.
SPI = 1 indicates that the project is on
schedule.
SPI > 1 indicates that the project is ahead of
schedule.
SPI < 1 indicates that the project is behind
schedule.

16. Change
Control Process

17. The change Control Process is a crucial aspect of project management that
ensures proper handling and management of changes that may impact
project costs. Here's a description of how changes will be assessed, approved
or denied, and documented in the change control process:
1. Change Identification: Changes can be identified through various channels
such as stakeholder requests, project team observations, or external factors.
A formal process should be in place to capture and document these change
requests.
2. Change Assessment:
Estimated Budget for Task 6: Managing the project = $117,810
Additional Budget Requested = $10,000
3. Cost Evaluation:
Revised Estimated Budget = Estimated Budget + Additional Budget Requested
= $117,810 + $10,000
= $127,810

18. 4. Approval or Denial: The change request will be assessed based on the
project's cost management plan and available budget. If the budget can
accommodate the additional $10,000 without compromising financial goals,
the change may be approved. If the change is feasible and necessary, and the
project can absorb the cost, it is likely to be approved. However, if the project
has limited budget or if the change negatively impacts financial performance,
the request may be denied.
5. Documentation: The change request, assessment, and decision will be
documented in the change log or control register, including the change
description, rationale, impact on costs, and the decision made. The
documentation will include the request for $10,000, its cost impact
assessment, and the approval or denial decision.

19. 6. Communication: The decision regarding the change request should be
communicated to all relevant stakeholders, including the project team,
client, and other affected parties. Clear and transparent communication
ensures that everyone is aware of the change and its impact on project
costs.
7. Implementation: If a change is approved, it needs to be implemented
following the established change management procedures. The necessary
adjustments to project plans, budgets, and resources are made, and the
change is integrated into the project's execution phase.
The change control process provides a structured and controlled approach
to managing changes that may affect project costs. It helps prevent scope
creep, ensures effective cost management, and maintains project alignment
with the approved baseline. By documenting and communicating changes,
stakeholders are kept informed, and decisions are made based on a
thorough evaluation of costs and project objectives.

20. REPORTING
 The process of gathering, analysing, and conveying
project-related information to stakeholders is referred to
as reporting. It entails creating and distributing reports
that offer a high-level overview of project progress, status,
and critical indicators. Throughout the project lifetime,
reporting is critical for keeping stakeholders informed,
easing decision-making, and maintaining openness and
accountability. In the context of your Hospital
Management System project, there are different reporting
processes.

21. REPORTING
 1. Cost Performance Reports:
 - Frequency: Monthly
 - Contents: These reports will provide a detailed
breakdown of the project's actual costs for the month,
including expenses related to development, resources,
equipment, and any other cost categories. The reports will
compare the actual costs against the approved budget,
highlighting any variances. Additionally, explanations for
significant deviations and corrective actions taken will be
included.

22. REPORTING
 2. Forecast Reports:
 - Frequency: Quarterly
 - Contents: These reports will project the expected costs
for the remaining duration of the project based on the
current cost performance. They will provide an analysis of
spending trends, anticipated cost fluctuations, and any
potential risks that may impact the budget. The reports will
also outline recommended actions to mitigate risks and
ensure cost control.

23. REPORTING
 3. Exception Reports:
 - Frequency: As needed
 - Contents: Exception reports will be generated when
there are substantial cost deviations or critical issues
requiring immediate attention. These reports will highlight
any unexpected cost increases, budget overruns, or risks that
pose a significant impact on the project's financial health.
They will provide detailed insights into the causes of
exceptions and propose remedial measures.

24. REPORTING
 4. Cost Baseline Reports:
 - Frequency: Baseline established at the beginning of the
project, and reports generated periodically for comparison.
 - Contents: Cost baseline reports will establish the initial
approved budget for the project. These reports will outline
the planned costs for each phase or milestone, serving as a
benchmark for measuring cost performance. Periodic baseline
reports will compare the actual costs against the approved
baseline, providing insights into any deviations and enabling
accurate tracking of project expenditures.

25. STAKEHOLDER
COMMUNICATION
 The practise of communicating information, updates, and
pertinent project-related data with persons or groups that
have a vested interest or influence in the project's result is
referred to as stakeholder communication. Project
sponsors, clients, team members, executives, users, and
any other persons or organisations affected or
participating in the project are examples of stakeholders.
In the context of your Hospital Management System
project, there are different channels to communicate with
stakeholders .

26. STAKEHOLDER
COMMUNICATION
 1. Monthly Stakeholder Meetings:
 - Frequency: Monthly
 - Channels: Virtual meetings (video conferencing)
 - Contents: Monthly stakeholder meetings will provide a
platform to discuss cost-related matters comprehensively. The
meetings will cover the project's overall cost performance,
budget utilization, and any significant cost implications. It will
also include updates on cost management strategies, key
milestones, and upcoming financial decisions.

27. STAKEHOLDER
COMMUNICATION
 2. Quarterly Cost Presentations:
 - Frequency: Quarterly
 - Channels: Presentation slides (shared electronically)
 - Contents: Quarterly cost presentations will offer a
detailed analysis of cost performance, including actual
spending, budget variances, and trend analysis. The
presentations will highlight achievements, challenges, and
potential cost-saving opportunities. They will provide
stakeholders with a holistic view of the project's financial
status and enable informed decision-making.

28. STAKEHOLDER
COMMUNICATION
 3. Email Updates:
 - Frequency: Bi-weekly
 - Channels: Email distribution list
 - Contents: Bi-weekly email updates will summarize the
project's cost performance, focusing on key highlights, recent
cost adjustments, and upcoming cost-related activities. The
emails will serve as a regular touchpoint, ensuring
stakeholders remain informed about the project's financial
progress and any notable updates.

29. STAKEHOLDER
COMMUNICATION
 4. Project Collaboration Tools:
 - Channels: Project management software (e.g., Microsoft
Teams)
 - Contents: Stakeholders will have access to a dedicated
project management platform where cost-related documents,
reports, and updates will be shared. This platform will
facilitate real-time collaboration, allowing stakeholders to
access information, raise queries, and provide feedback on
cost management strategies and decisions.

30. STAKEHOLDER
COMMUNICATION
 5. Face-to-face Meetings:
 - Channels: In-person or virtual meetings (video
conferencing)
 - Contents: Face-to-face meetings will be scheduled for
critical cost discussions, such as major budget adjustments,
contract negotiations, or high-impact financial decisions.
These meetings will enable detailed conversations, foster
stakeholder engagement, and address complex cost-related
topics that may require interactive dialogue.

31. Conclusion

32. The key elements of the cost management plan include cost estimation,
budgeting, cost control, earned value management, change control,
documentation, reporting, and stakeholder communication. These elements
collectively ensure the successful completion of the project within the allocated
budget.
Through accurate cost estimation, the project sets realistic financial targets. The
budgeting process allocates resources and funds to different project activities.
Cost control measures, such as monitoring actual expenses against the budget,
calculating cost variances, and implementing corrective actions, help keep the
project's financial performance on track.
Earned value management allows for the measurement of the project's cost and
schedule performance. The Cost Performance Index (CPI) and Schedule
Performance Index (SPI) provide insights into whether the project is performing
better or worse than planned. Calculating CPI and SPI using the formulas:
 CPI = EV / AC (where EV is Earned Value and AC is Actual Cost)
 SPI = EV / PV (where PV is Planned Value)
These metrics help in decision-making and identifying areas that require
attention.

33. The change control process ensures that any changes that may affect costs
are assessed, approved, or denied in a structured manner. This helps prevent
unnecessary budget overruns and maintains cost discipline throughout the
project.
Documentation and reporting mechanisms capture and communicate cost-
related information to stakeholders. This transparency facilitates effective
decision-making and ensures stakeholders are informed about the project's
financial status.
Overall, the cost management plan plays a crucial role in maximizing cost
efficiency, controlling expenses, and minimizing financial risks, ultimately
leading to the successful completion of the project within the budget.