Estimated project cost components, project size at function points is the most important component of project costing. The productivity factor (ie the number of FP’s per person per month) is next. Divide FP by productivity to get the person’s number of months. Include additional effort for unexpected leave by employees and a percentage of the raw project management and governance effort, multiply by the person’s current month rate to arrive at the total cost. Add a little markup for currency price volatility (in the case of cross-border projects)
Estimated cost components of the project
There are 4 components of project cost:
The cost of material
Materials All materials needed for a project are included in material costs. Materials are anything a project manager purchases to help with or implement a project. For example, if the project is constructing a building, the materials will include concrete foundation, timber, drywall, electrical and plumbing components, fixtures, roofing materials, and paint. The project to develop a corporate training manual will include the cost of paper, printing, lamination and binders.
All personnel employed during the course of the project are costs associated with human resources. HR includes everyone from the project manager to the janitor.
In addition to the cost of HR salaries, the cost of benefits and insurance, where applicable.
Even if a person is not working on a full-time project, all of his or her contribution to the project counts as the cost of an HR project.
Pre-planning costs related to project planning and pre-planning vary widely from industry to industry.
Typical advance planning costs include selecting project managers and potential employees, hiring consultants, conducting market and project research, and preparing opportunities for vendor bids.
Another cost component of pre-planning a project is establishing a project budget and schedule, obtaining the necessary permits and licenses, and securing materials, workspace and equipment.
Operating costs include costs
Project operation Fees associated with the purchase of project supplies, rent payment, costs associated with the facility or location in which the project will be implemented, permit cost, inspections and day-to-day operations.
Where operations include the cost of renting and operating machinery and picking up or delivering supplies or products. For example, it will include operating costs when constructing a cement mixer delivery building for concrete pouring of the foundation, the cost of gasoline for the excavator on site and the rental of a hydraulic lift for the delivery of roof slabs.
The operating costs of the Enterprise Training Manual project include the costs associated with operating a computer or printer.
Some ways to improve project estimating skills and project costing components
Some good rules to find out which one I used are as follows:
How many functionally distinct call threads will there be for a piece of code that differs from each other in a non-trivial way? How testable are all these call strings?
How many interaction points with code that you don’t have and that something has?
What is the overall test series for a unit?
How much code is a straight line code?
How many variables do you need to characterize the performance of a part of the code you are writing?
How dangerous are failure patterns of not getting something right?
Will some major functionality have code conflicts between different engineers?
Are you taxing an existing subsystem or using it in a way that it is not currently in use?
Are the interfaces between some of the main child elements well defined, or are they obscure equations for scrolling in giant lists of variable inputs?