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Out of 351 projects each costing over Rs. Crores 56 % had cost overruns (totalling 20% costs) 49 % faced a time overrun from 1 to 157 months. Cash flow management means meeting all three goals (scope, time, and cost) and satisIying the proiects sponsor.
Out of 351 projects each costing over Rs. Crores 56 % had cost overruns (totalling 20% costs) 49 % faced a time overrun from 1 to 157 months. Cash flow management means meeting all three goals (scope, time, and cost) and satisIying the proiects sponsor.
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Out of 351 projects each costing over Rs. Crores 56 % had cost overruns (totalling 20% costs) 49 % faced a time overrun from 1 to 157 months. Cash flow management means meeting all three goals (scope, time, and cost) and satisIying the proiects sponsor.
Drepturi de autor:
Attribution Non-Commercial (BY-NC)
Formate disponibile
Descărcați ca PPT, PDF, TXT sau citiți online pe Scribd
Management oI Billing by T.E.Joseph #eal Estate Does Provide Many Opportunities Including Adding Value Through: #eal estate acquisition Development Financing Site Analysis Controlling Operating Costs Innovative Marketing Innovative Management No Secret Way To Attain Success Only hard work with good research and systematic analysis Main Causes of Project Failure Data shows that hardly few projects get completed within specified costs and within original time duration. Out of the 351 projects each costing over Rs.20 crores 56 % had cost overruns (totalling 20% costs) 49 % faced a time overrun from 1 to 157 months. Normally,the factors contributing to these overruns are : 1. nadequate project formulation This included poor field investigation, inadequate project information, bad cost estimates etc. 2. Poor Resources Planning Both Men, Material and Equipment, inter-linking never anticipated. 3. Lack of Proper contract planning and management such as improper contract conditions, poor post award contracts management. 4. Lack of Proper Resources Management during Execution thus leading to non-fulfillment of objectives. 5. This itself highlights the role of a Quantity Surveyor who is an integral part of the system and if he does not do his job properly, the project is bound to suffer. The Triple Constraint oI Cash Flow Management SuccessIul Cash Flow management means meeting all three goals (scope, time, and cost) and satisIying the proiect`s sponsor! Cash Flow Analysis Cash fIow management is the process of monitoring, analyzing, and adjusting your projects' cash flows. For small projects, the most important aspect of cash flow management is avoiding extended cash shortages, caused by having too great a gap between cash inflows and outflows. You won't be able to stay in business if you can't pay your bills for any extended length of time! Therefore, you need to perform a cash flow analysis on a regular basis, and use cash flow forecasting so you can take the steps necessary to head off cash flow problems. Many software accounting programs have built-in reporting features that make cash flow analysis easy. This is the first step of cash flow management. The second step of cash flow management is to develop and use strategies that will maintain an adequate cash flow for your project. Factors eIIecting cost (post contract)/cash Ilow Delays (In terms oI time) Escallation #ework/ Quality #esource Utilization Idling Wastages Material Management #unning Elements contributing to the cost (cash Ilow) oI the Proiect Direct Costs Costs associated with actual execution Costs oI #esources like material, labour, machinery etc. Wastage, escallation, #ework and #ectiIication Cost oI Subcontracting Indirect Costs Costs oI oIIice and its staII Computers and communication Watch and ward Transportation Insurance Other miscellaneous expenses Bank Finances ??????? Three Views of Cost N0ll0fl0 8 00lf0lll0 0880 N0ll0fl0 8 00lf0lll0 0880 fl0N 0f00088 l8 08808 0 . fl0N 0f00088 l8 08808 0 . l98l08ll0 Ff00f088 l98l08ll0 Ff00f088 000f00 0l l0lllllM0l 0l l00 00l00ll908 000f00 0l l0lllllM0l 0l l00 00l00ll908 8l9Il0 l00 8l8l08 0l l00 0f0l00l 8l9Il0 l00 8l8l08 0l l00 0f0l00l 80M08l8l M0880f08lf0 80M08l8l M0880f08lf0 0l8 0l8 Earned Value Management The earned value cost management report is a valuable management tool Ior cot control managers. Earned value, or the budgeted cost oI work perIormed, is a key perIormance metric on the report. It is the basis Ior determining cost and schedule variances, and is oIten used as part oI a Iormula to help estimate the Iinal cost oI the contract, termed the estimate at completion (EAC). The proiect manager oIten perceived the it as a Iinancial rather than a management report, and did not use it as eIIectively as possible. Earned Value Management Overall responsibility Ior earned value management was moved Irom Iinance to proiect management in 1989. In particular, three ways to evaluate the reasonableness oI the .ontra.tors EAC are described. Two oI these involve comparing the proiect`s cumulative cost perIormance with its predicted Iuture perIormance. The other technique involves comparing a range oI estimates Iound to be accurate on a large number oI completed proiects with the predicted Iinal cost oI the ongoing proiect. In recent years, earned value management systems and the resulting data Irom those systems have been used to manage commercial proiects in the India and abroad including United States. THE TE#MINOLOGY OF EA#NED VALUE MANAGEMENT #EPO#TS Terminology used in earned value management reports can be conIusing. The acronyms alone number in the dozens. #egardless oI the kind oI proiect (deIense, space, construction, etc.), however, only three basic data elements listed on the earned value management report are central to proper planning, measurement, and analysis: budgeted cost Ior work scheduled (BCWS), budgeted cost Ior work perIormed (BCWP), and actual cost oI work perIormed (ACWP). The BCWS is the budget Ior work scheduled to be completed. It can be either monthly or cumulative. As a monthly amount, it represents the amount oI work scheduled to be completed Ior that month. As a cumulative amount, it represents the amount oI work scheduled to be completed to date. BCWS is also known as 'planned value. The BCWP is the budget Ior the completed work. It also can be either monthly or cumulative. Monthly BCWP represents the amount oI work completed during a month; cumulative BCWP represents the amount oI work completed to date. BCWP is also known as 'earned value. The ACWP is the actual cost incurred in accomplishing the work within a given period. Like the budgets, both direct and indirect costs are included. To permit meaningIul comparisons, the ACWP should be recorded in the same time period as BCWP Ior a given piece oI work. Cost and Schedule Variance ost and S.hedule varian.e are the two primarv measures of the Proie.t Progress. Thev .an be determined bv. ost Jarian.e (J) J BP AP S.hedule Jarian.e (SJ) SJ BP-BS W f J/SJ 0, then proie.t is right on tra. W f J/SJ , then the proie.t is under budget and ahead of time W f J/SJ -, then the proie.t is over budget and behind s.hedule The variance at completion (VAC) is the diIIerence between the total budget oI the proiect, termed the budget at completion (BAC), and the estimated total cost oI the proiect, termed the estimate at completion (EAC). When these variances are signiIicant they are immediately investigated by managers who are empowered to take appropriate corrective action. The cost management report summarizes the monthly cost and schedule status oI the proiect by listing the three data elements, the related variances, the BAC, and the revised EAC Ior all oI the maior pieces oI work on the proiect. The proiect`s PMB includes indirect cost as well as direct cost. In addition, ACWP includes indirect costs, and contractors must investigate all signiIicant cost variances, including indirect cost variances. Contractors periodically develop 'comprehensive EACs by estimating and aggregating the costs oI incomplete work and planning packages remaining on the contract. In addition, the c o n t r a c t o r `s EAC is examined monthly Ior accuracy and revised as necessary to ensure that resource requirements are realistic and properly phased. The second comparison uses two perIormance indices: the cost perIormance index (CPI) and the to-complete perIormance index (TCPI). The CPI measures the budgeted cost oI completed work against the actual cost. II the CPI is less than one, an unIavorable cost variance is indicated. Cost and Schedule PerIormance Indices Two Indices that are useIul Ior communicating progress status are the Cost PerIormance Index and the Schedule PerIormance Index. They are determined by : Cost PerIormance Index: The cost eIIiciency Iactor representing the relationship between the actual costs expended and the value oI the physical work perIormed. CPI BCWP/ACWP Schedule PerIormance Index: The planned schedule eIIiciency Iactor representing the relationship between the value oI the initial planned schedule and the value oI the physical work perIormed. SPI BCWP/BCWS II CPI and SPI 1, then the proiect is on budget and on schedule 1, then the proiect is over budget and behind schedule ~ 1, then the proiect is under budget and ahead oI schedule. 80800f00 ll008ll0 80800f00 ll008ll0 l0f 00ll0f 0880 fl0N l0f 00ll0f 0880 fl0N N8800M0l N8800M0l l80lll9l0 l00 l9008 0l f0800f008 l80lll9l0 l00 l9008 0l f0800f008 008lll9 0l f0800f008 008lll9 0l f0800f008 00f8ll0 0l 0ll9ll9 00f8ll0 0l 0ll9ll9 00lf0lll0 00lf0lll0 l98l08ll0 Ff00f088 l98l08ll0 Ff00f088 000f00 0l l0lllllM0l 0l l00 000f00 0l l0lllllM0l 0l l00 00l00ll908 00l00ll908 8l9Il0 l00 8l8l08 0l l00 8l9Il0 l00 8l8l08 0l l00 0f0l00l 0f0l00l 80M08l8l M0880f08lf0 80M08l8l M0880f08lf0 0l8 0l8 Management oI Billing Billing Periods Practices Iollowed Lumpsum, Labour Procedures Adopted Contractors Categorised Payment Period/ Mode oI Payment #etention Money in Bills Claims #econciliation /Periodic W Like the song in the sound of music says : limb everv mountain. ross everv stream. Stop vou not. Till vou a.hieve vour dream Have this attitude towards managing your cash flows and and you will see you have successfully executed a project. A little thought.