Re: Adding to a Contingency Line Item

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To me, top-down implies the boss comes to you and says "I want you to head up a project to do xxxx and I'll budget up to $yyyy for you to accomplish it" or the sales department comes to you with the news that "We just signed a contract with XXX client to deliver YYYY at a fixed price of $ZZZ." The budget is set through some a priori process before you even have a clue what is going to be involved in carrying out the project. Bottom up, OTOH, says "We need to do the following work in order to complete the project and it's estimated to cost $XXXX." In other words, top-down starts with an allowable budget and you figure out what deliverables you can achieve for that money while bottom-up starts with the required deliverables and derives the budget from their estimated cost.
--
Steve House [Project MVP]
MS Project Trainer & Consultant
Visit http://www.mvps.org/project/faqs.htm for the FAQs


"davegb" <davegb@xxxxxxxxxxxxxx> wrote in message news:1170104521.515370.246130@xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
Maybe our differences are more about definitions than application. To
me, starting with "What do we need to achieve?" is the basis of
Achievement Based Planning, which I consider a top down planning
model. All the questions you mention are what I call top down
planning. Asking the big questions first, then working your way down
to a task list from there.

To me, bottom up is when you start by creating a task list, then work
your way up from there.

On Jan 25, 4:22 pm, "Steve House" <sjhouse.rem...@xxxxxxxxxxxxxxxxxx>
wrote:
The problem with top-down, as I see it, is that essentially it involves
saying "We have this much money available this year, what can we do with
it?" rather than the bottom up approach that says "What do we need to
achieve? How much will it cost to achieve it? Do we have the assets
available to do it? What trade-offs do we have to make in order to make the
needs and the assets fit?"
--
Steve House [Project MVP]
MS Project Trainer & Consultant
Visithttp://www.mvps.org/project/faqs.htmfor the FAQs

"davegb" <dav...@xxxxxxxxxxxxxx> wrote in messagenews:1169478475.227820.274120@xxxxxxxxxxxxxxxxxxxxxxxxxxxxxx





> Steve House wrote:
>> Remember the primary function of Project is to be a work scheduling >> and
>> cost
>> estimating program. It appears you are trying to use it as a top-down
>> budget planning program. In fact, it doesn't do top-down anything >> very
>> well. Even with the thing it's designed to do best, scheduling work
>> hence
>> estimating durations, the duration of tasks does not reflect the time
>> allowed for them. Rather they are your best guesstimate of the time >> that
>> each physical activity will take from when work on it begins until >> work
>> on
>> it ends. Project planning, both for time and for budget, is always a
>> bottom-up process rather than a top down process - you're most >> concerned
>> with what will be required to achieve the deliverable and then you can
>> look
>> at whether you have the assets available needed to pull it off.

> I have to respectfully disagree with Steve on this. In many cases, our
> experiences vary. In my experience, I prefer top-down planning of
> projects, in which the desired final result is carefully determined,
> then the major milestones neccessary to achive that final result are
> determined, then broken down further and further until the desired
> level of detail for effective project control is achieved. Once those
> tasks are known, their durations and dependencies are determined, and a
> bottom up process of calculating the overall duration, cost, resource
> needs, etc., can procede. It's just one approach among many.

> One of the approaches that works this way is called "Achivement Based
> Planning". It starts by determining exactly what the project is
> supposed to achieve. The advantage of this approach is that it avoids
> many of the pitfalls you find in project planning, such as doing a
> project that doesn't really need to be done at all or doing a project
> that solves the wrong problem, or approaching the problem in a less
> effective manner because you weren't sure why you were doing it in the
> first place. I've seen all these things happen, and on some pretty good
> sized projects.

> This is just one Project Planning Methodology among many. I have found
> it to be effective because it avoids many of the strategic problems
> encountered in planning. It's certainly not the only one, nor even the
> only effective one. Just one that I found to help me to be a better PM.

> Hope this helps in your world.

> If you do
>> need to track present estimates against a top-down budget, grab a >> spare
>> cost
>> or numeric field to hold the bedget data. (The 'time budget' is best
>> tracked
>> by using deadline field entries to represent the required delivery >> dates
>> for
>> the relevant tasks rather than trying to kludge up some sort of >> 'maximum
>> allowed duration' metric).

>> In you can, if B & C are truly component tasks of deliverable A, then >> A
>> should be a summary and B and C its children. But you need to insure
>> that
>> ALL of the other components of A are also detailed out in order to >> have
>> valid rollup figures. When you do, the duration of A is from when its
>> earliest starting child begins until its latest finishing child ends, >> no
>> more and no less. And of course this is determined by the durations >> of
>> the
>> subtasks, with their various start dates determined by the combination >> of
>> the effects of dependency links taking into account lag and lead time
>> plus
>> the influence of any start time constraints. If plugging all this in >> has
>> an
>> impact on your current duration estimate for the summary task then the
>> process you used for determining its present duration is in error.

>> John is spot on with his suggestion not to use the summary fixed cost >> as
>> you
>> have. Fixed costs at both the subtask and the summary task levels
>> roll-over
>> into the total cost of that line item but they don't roll-up in the >> fixed
>> cost column itself. This is to allow for a situation where there is a
>> fixed
>> cost associated with a summary line that is in addition to the fixed
>> costs
>> associated with any of its subtasks. The ultimate total appearing in >> the
>> summary line Total Cost field is = sum(subtask resource costs) +
>> sum(subtask
>> fixed costs) + (summary task fixed cost). As you can see, roll-ups >> from
>> subtask to summary occur in the total cost field so they do ultimately
>> get
>> rolled up. If you do as you have done and try to use the summary >> fixed
>> cost
>> as a manually entered roll-up, you'll end up doubling the total fixed
>> cost
>> component of the Total Cost field over its true value.

>> HTH

>> --
>> Steve House [Project MVP]
>> MS Project Trainer & Consultant
>> Visithttp://www.mvps.org/project/faqs.htmfor the FAQs

>> "kraus" <k...@xxxxxxxxxxxxxxxxxxxxxxxxx> wrote in message
>>news:2DBFF509-14C5-4E45-95CA-CB4BD0FE9258@xxxxxxxxxxxxxxxx
>> >I have set up a consultant contingency line item in my project plan >> >and
>> > baselined it.

>> > Consultancy Contingency = $151,655.00
>> > Duration = 100wks (covers planning and execution phases)

>> > I am now engaging some consultants and want to reflect the change in
>> > the
>> > consultant contingency line item but also reflect in the project >> > plan
>> > the
>> > additional work added.

>> > My original line was "A" (below) as the baseline. Lines "B" & "C" is
>> > the
>> > work after the fact that I would like to deduct from "A". I have >> > been
>> > trying
>> > to work it out myself, you'll notice the fixed cost in "A" equals >> > the
>> > total
>> > of "B" & "C". Ideally I would like "B" & "C" as sub-tasks of "A" but
>> > this
>> > will mess up my baseline not to mention the duration impact, "B" & >> > "C"
>> > took
>> > 2wks and this would also be the duration of "A" if it were the >> > rollup
>> > task
>> > but I want this to stay at the 100wks.

>> > Fixed Cost Total
>> > Cost
>> > Baseline
>> > A. Consultancy Contingency $4,395.00 $4,395.00m $151,655.00

>> > B. Hospitality Consultant Prepare
>> > Hospitality Report $0.00 $3,500.00 $0.00
>> > C. Hospitality Consultant Review
>> > Schematic Design $0.00 $895.00 $0.00

>> > Any suggestions would be appreciated.

>> > David- Hide quoted text -- Show quoted text -


.

Relevant Pages

  • Re: Adding to a Contingency Line Item
    ... Achievement Based Planning, which I consider a top down planning ... How much will it cost to achieve it? ... estimating durations, the duration of tasks does not reflect the time ... subtask to summary occur in the total cost field so they do ultimately ...
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  • Re: Adding to a Contingency Line Item
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