Re: Adding to a Contingency Line Item

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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
Visit http://www.mvps.org/project/faqs.htm for the FAQs


"davegb" <davegb@xxxxxxxxxxxxxx> wrote in message news: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
Visit http://www.mvps.org/project/faqs.htm for the FAQs


"kraus" <kraus@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
>


.

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