Information Technology Project
Management, Seventh Edition
Information Technology Project
Management, Seventh Edition 2
Explain basic project cost management principles,
concepts, and terms
Describe the process of planning cost management
Discuss different types of cost estimates and
methods for preparing them
Understand the processes of determining a budget
and preparing a cost estimate for an information
technology (IT) project
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Management, Seventh Edition Copyright 2014 3
Cost is a resource sacrificed or
foregone to achieve a specific objective
or something given up in exchange.
Costs are usually measured in
monetary units like dollars.
Project cost management includes
the processes required to ensure that
the project is completed within an
approved budget.
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Management, Seventh Edition Copyright 2014 4
[Link] cost management :determining the
policies, procedures, and documentation that will be
used for planning, executing, and controlling project
cost.
[Link] costs: developing an approximation or
estimate of the costs of the resources needed to
complete a project
[Link] the budget: allocating the overall cost
estimate to individual work items to establish a baseline
for measuring performance
[Link] costs: controlling changes to the
project budget
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Management, Seventh Edition Copyright 2014 5
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Management, Seventh Edition Copyright 2014 6
Most members of an executive board better
understand and are more interested in financial terms
than IT terms , so IT project managers must speak
their language
◦ Profits are revenues minus expenditures
◦ Profit margin is the ratio of revenues to profits
◦ Life cycle costing considers the total cost of
ownership, or development plus support costs, for a
project
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Management, Seventh Edition Copyright 2014 7
Tangible costs or benefits are those costs or
benefits that an organization can easily measure in
dollars
Intangible costs or benefits are costs or benefits
that are difficult to measure in monetary terms
Direct costs are costs that can be directly related to
producing the products and services of the project
Indirect costs are costs that are not directly related
to the products or services of the project, but are
indirectly related to performing the project
Sunk cost is money that has been spent in the past;
when deciding what projects to invest in or continue,
you should not include sunk costs
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Management, Seventh Edition Copyright 2014 8
The project team uses expert judgment, analytical
techniques, and meetings to develop the cost
management plan
A cost management plan includes:
◦ Level of accuracy and units of measure
◦ Organizational procedure links
◦ Control thresholds
◦ Rules of performance measurement
◦ Reporting formats
◦ Process descriptions
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Management, Seventh Edition Copyright 2014 9
Project managers must take cost estimates
seriously if they want to complete projects within
budget constraints
It’s important to know the types of cost estimates,
how to prepare cost estimates, and typical problems
associated with IT cost estimates
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Management, Seventh Edition Copyright 2014 10
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Management, Seventh Edition Copyright 2014 11
Basic tools and techniques for cost estimates:
◦ Analogous or top-down estimates: use the
actual cost of a previous, similar project as the
basis for estimating the cost of the current project
◦ Advantages: Fast, archive
◦ Disadvantages:
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◦ Bottom-up estimates: involve estimating
individual work items or activities and summing
them to get a project total
◦ Advantages: exactlty
◦ Disadv: Slowly
◦ Parametric modeling uses project characteristics
(parameters) in a mathematical model to estimate
project costs
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Management, Seventh Edition Copyright 2014 13
Estimates are done too quickly
People lack estimating experience
Human beings are based toward underestimation
Management desires accuracy
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Management, Seventh Edition Copyright 2014 14
Cost budgeting involves allocating the project cost
estimate to individual work items over time
The WBS is a required input to the cost budgeting
process since it defines the work items
Important goal is to produce a cost baseline
◦ a time-phased budget that project managers use to
measure and monitor cost performance
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Management, Seventh Edition Copyright 2014 15
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Project cost control includes
◦ Monitoring cost performance
◦ Ensuring that only appropriate project changes
are included in a revised cost baseline
◦ Informing project stakeholders of authorized
changes to the project that will affect costs
EVM - Earned Value Management is a popular tool
that used for controlling Cost
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Management, Seventh Edition Copyright 2014 17
EVM is a project performance measurement
technique that integrates scope, time, and cost data
Given a baseline (original plan plus approved
changes), you can determine how well the project is
meeting its goals
You must enter actual information periodically to use
EVM
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Management, Seventh Edition Copyright 2014 18
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Management, Seventh Edition 19
The Budget at Completion(BAC) is determined at the
start of the project based on the project estimates and
assumptions. As the project progresses the BAC may
need to be revisited based on the project forecast.
Ex:
A project has a budget of $10,000,
BAC = $10,000
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Management, Seventh Edition Copyright 2014 20
The planned value (PV), called the budget, is
that portion of the approved total cost estimate
planned to be spent on an activity during a given
period.
PV = BAC * % Complete (Planned )
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Management, Seventh Edition Copyright 2014 21
Ex:
Mar 1 Mar 5 Mar 8 Mar 10
If it’s March 5 today
Planned Value (PV)= 50% x $10,000 = $5,000.
If it’s March 8,
Planned Value (PV) = 80% x $10,000 = $8,000.
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Management, Seventh Edition Copyright 2014 22
The earned value (EV) is the amount of the task
that is actually completed
EV = % Complete (Actual) x BAC
EX:
The actual percent complete is 75% and the task
budget is $10,000,
Earned Value (EV) = 75% x $10,000 = $7,500.
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Management, Seventh Edition Copyright 2014 23
Actual cost (AC) is the total of direct and
indirect costs incurred in accomplishing work on
an activity during a given period
Ex:
The actual cost is $200 for software subscriptions
and $1,000 for labor
AC = $200 + $1,000 = $1,200.
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Management, Seventh Edition Copyright 2014 24
EAC
ETC
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Management, Seventh Edition Copyright 2014 25
Schedule Performance Index – SPI
SPI = EV/PV
◦ SPI < 1, the task is behind schedule.
◦ SPI =1 one, the task is on schedule
◦ SPI > 1, the task is ahead of schedule.
Schedule variance – SV
SV = EV - PV
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Management, Seventh Edition Copyright 2014 26
Cost Performance Index - CPI
CPI = EV / AC
◦ CPI < 1, the task is over budget.
◦ CPI =1, the task is on budget.
◦ CPI > 1, the task is under budget.
Cost Variance (CV)
CV = EV - AC
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Management, Seventh Edition Copyright 2014 27
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Estimate at Completion – EAC is the full task or
project cost expected AT completion (the new
project budget).
EAC = BAC / CPI
Estimate to Complete - ETC represents the
expected cost required TO complete the project.
ETC = EAC – AC
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Management, Seventh Edition Copyright 2014 29
To Complete Performance Index-TCPI
Variance at Complete-VAC
VAC = BAC – EAC
VAC > 0 : the project will be under budget
VAC = 0 : the project will be on budget
VAC < 0 : the project will be over budget
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Management, Seventh Edition Copyright 2014 30
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Management, Seventh Edition 31
Project cost management is a traditionally weak
area of IT projects, and project managers must work
to improve their ability to deliver projects within
approved budgets
Main processes include
◦ Plan cost management
◦ Estimate costs
◦ Determine the budget
◦ Control costs
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Management, Seventh Edition Copyright 2014 32
Bạn là người quản lý dự án tại một công ty thiết kế
công nghiệp. DA được cấp vốn tổng cộng 55.000$.
Kế hoạch của bạn kêu gọi sáu người làm việc trong
dự án 8 tiếng một ngày, 5 ngày một tuần trong 4
tuần. Theo lịch trình, nhóm của bạn phải hoàn thành
khối lượng công việc vào tuần thứ ba của dự án.
Khi bạn xem lại những gì nhóm đã làm cho đến nay,
bạn thấy rằng nhóm đã hoàn thành 50% công việc,
với chi phí 25.000 đô la.
BAC, AC, PV, EV ?
CPI, SPI → Kết luận ?
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BAC=55.000
Time = 4
Kế hoạch hoàn thành tuần thứ 3 (planned): ¾= 75%
→ Planned Value (PV) = 75% *55.000= 41.250
Thực tế hoàn thành 50% : 50%
→ Earned Value: EV= 50% *55.000=27500
Thực tế chi phí sử dụng: AC= 25.000
SPI = EV/PV= 27500/41250 <1
CPI= EV/AC= 27500/25000>1
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Management, Seventh Edition Copyright 2014 34
Dự án hiện tại của bạn là một nỗ lực phát triển
phần mềm trị giá 800.000 đô la, với hai nhóm lập
trình viên sẽ làm việc được sáu tháng, tổng cộng là
10.000 giờ. Theo kế hoạch dự án, nhóm của bạn
thực hiện với 38% công việc. Bạn thấy rằng dự án
hiện đã hoàn tất 40%. Bạn đã dành 50% ngân sách
cho đến thời điểm này.
Tính BAC, AC, SV, SPI, PV, EV, CV, CPI
Kết luận về thời gian thực hiện và ngân sách cho
DA
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Bạn đang quản lý dự án xây dựng triển khai hệ thống
CNTT cho các trường TH trong một tỉnh. Tổng ngân
sách của bạn là 650 triệu, và có tổng cộng 7.500 giờ
làm việc dự kiến. Tại thời điểm hiện tại bạn đã chi 400
triệu và 5% giá trị phát sinh giá thiết bị tăng so với chi
phí thực tế. Theo kế hoạch, đội DA của bạn cần làm
việc 4.500 giờ, nhưng cả đội làm việc thêm giờ (OT)
lên tới 5.100 giờ làm việc.
Tính các giá trị BAC, PV, AC, EV, SPI, CV, CPI?
Kết luận về thời gian thực hiện và ngân sách cho DA
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Bạn là người quản lý dự án làm việc trong một dự
án lớn dự kiến kéo dài trong hai năm với tổng ngân
sách cho dự án của bạn là $ 4,200,000.
Trường hợp 1:
Trong 9 tháng đầu dự án đã chi 1.650.000 đô la,
và bạn đã có một CPI là 0.875.
Trường hợp 2:
Trong sáu tháng tiếp theo, bạn đã chi tổng số là
2.625.000 đô la, dự án hoàn thành 70%.
Bạn có thể đưa ra một dự báo cho dự án của mỗi
trường hợp.
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Trường hợp 1:
◦ AC=1650000, CPI=0.875 -> EAC=BAC/CPI=4800000
◦ VAC = BAC-EAC= - 600.000
◦ → ETC=EAC-AC=3150000
◦ → Chi phí tại thời điểm hoàn thành vượt ngân sách
$600.000
Trường hợp 2:
◦ AC= 2.625.000
◦ Hoàn thành : 70% → EV=70%* 4,200,000= 2.940.000
◦ CPI = EV/AC= 2.940/2.625= 1.12
◦ EAC=BAC/CPI= 4.200.000/1.12= 3.750.000
◦ VAC = BAC – EAC =4.200.000- 3.750.000= 450.000
◦ → Chi phí đạt được khi hoàn thành dự còn lại : $450.000
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Start 22/09/2023 48 ngày
tại thời điểm 30/10/2023
Task Name Predecessors Cost ($)/day % Complete Actual Cost
A 2000 100% $ 2,000
B 1 1500 100% $ 1,500
C 1 200 100% $ 200
D 1,2 450 83% $ 374
E 3 620 100% $ 620
F 4 700 0% $ -
G 1,4 1000 0% $ -
H 5 600 100% $ 600
I 6 700 0% $ -
J 7,8,9 1200 0% $ -
8970 5293.5
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Management, Seventh Edition 39