Project Development.

1.1. Introduction to Project Management.

 1.1. Introduction to Project Management.

Project management is a methodology used worldwide, by

companies and institutions to achieve objectives within a specified time frame. Also
it means carrying out a management that balances, separating the urgencies from the tasks that
they are really important for the client.
 Project.

A set of activities to be carried out with the aim of achieving a goal.

 Phases.

The five phases considered for the projects are:

1. Start.
2. Planning.
3. Execution.
4. Control.
5. Conclusion.
 Areas of knowledge

The 10 areas of knowledge are:

Integration.
2. Scope.
3. Time.
4. Cost.
Quality.
6. Human Resources
7. Communications.
8. Risks.
9. Acquisitions
10. Interested parties.
1.2. Project versus operational work.
 1.2. Project versus operational work.

Project: A project is a plan that consists of a set of activities.

that are interrelated and coordinated.
A project is a temporary effort undertaken to create a product,
unique service or result.

Operational Work: these are activities that are carried out continuously in the
organization unlike a project that has a start and an end.
 Some examples of operational work are:

The construction of a car in an automotive company is operational work because

the company performs it continuously.

Accounting processes are also operational work because they are carried out.
monthly.

All work related to tax payment is done on a monthly basis.

therefore it is operational work.

The payment of payroll is also operational work since companies must do

this process every month.
 Some examples of projects are:

The design of a new product is only done once, therefore it is a project.

Building a refinery is a project because it has a start and an end.

The development of accounting software for a company is a job

Temporal should also be considered as a project.

The improvement of a process could be carried out through a project because it is a

work that will be done temporarily.
1.3. Context of project management.
 1.3. Context of project management.

Project Management: It is the application of knowledge, skills, tools and

techniques to the activities to meet the requirements set.
 Characteristics of project management.

1. The direction is exercised by one person, the project manager. In all direction
of projects, there is a person responsible for applying the knowledge, skills,
tools and techniques. This person would be the project manager, who must possess
a series of basic skills and competencies in this field.

2. Los proyectos son el conjunto de actividadesque se han planificado para alcanzar los
desired results. Results that can be translated as products or services.

3. Aimed at achieving specific objectives. Project management seeks to

achievement of specific objectives set in advance.

Every project is limited by scope, time, and costs.

The project depends on these three interrelated factors.
5. Project management consists of various types of processes, actions and
interrelated activities. Where planning, execution,
monitoring and controlling process group and the closing process group.

6. Project management is supported by areas of knowledge. The processes of

Address is organized into nine areas of knowledge, which the project director
must dominate and manage in an integrated manner:

Project Integration Management.

Project Scope Management.
Project Time Management.
Project Cost Management.
Project Quality Management.
Human Resources Management of the Project.
Project Communication Management.
Project Risk Management.
Project Procurement Management.
It is a dynamic process. Project management is a dynamic and changing process.
in which actions are constantly related and influence each other. The processes
depends on the nature of the project, on the characteristics and circumstances of the
environment and the demands and needs of the clients.
 What defines and determines the work team within the
activities?

The duration of the activities of the final level of the project.

1.4. Project management office: organizational structure.
 1.4. Project Management Office: organizational structure.

Project Management: In business administration, project management is the

discipline that studies planning, organization, motivation, and control of
the resources with the purpose of achieving one or several objectives.
 Project Management Office

A project management office, also known by its acronym PMO, is a

department or group that defines and maintains process standards, generally
related to project management within an organization. The OGP works on
standardize and economize resources by repeating aspects in execution
of different projects. The OGP is the source of documentation, direction, and metrics.
in the practice of project management and execution.
 Functions.

La oficina de gestión de negocios tiene 5 funciones básicas las cuales son:

Development Function.
2. Support Function.
3. Operation Function.
4. Control Function.
5. Organization and Methods Function.
 Responsibilities.

The responsibilities of a project management office can range from

the provision of support functions for project management up to the
responsibility for the direct management of a project. The OGP can be an interested party.
if you have any direct or indirect responsibility in the outcome of the project. Among
its functions, the OGP can provide:

Administrative support services, such as policies, methodologies, and templates.

Training, mentoring, and consulting for project directors.
Support for the project, alignments, and training on project management and the
use of tools.
Alignment of the project's personnel resources.
Centralization of communication between project directors, sponsors,
directors and other stakeholders.
•Actualizar la aplicación de gestión de proyectos
 What benefits are obtained from the creation of the management office?
projects?

Strengthen the project management culture, multiply knowledge and experience,

manage and identify the key factors of the project.
1.5 Project Objectives.
 1.5 Project Objectives.

The objective is defined as a goal to be achieved for which resources are allocated.
determined resources. Generally, achieving a goal implies the
overcoming obstacles of greater or lesser magnitude.

When we talk about the objectives of a project, we refer to the purposes for which
The activities that need to be fulfilled are oriented. They are written declarations.
through which the results we want to achieve are reflected.

Three types of project objectives must be established: general objectives, the

specific objectives and operational objectives.
General Objectives: The general objectives of a project represent the purpose or
purpose for which we started to develop the project, describe in a way
generally what we want to achieve by completing the work. They do not provide evaluable data or
measurable within the project's strategy.

Specific objectives: they serve to delimit the general planning strategy towards
the goals set at a general level. They are the most concrete part of the objectives
business-related, those that refer to the smallest things, but that form
part of a whole.

Operational Objectives: The operational objectives are the benchmarks of the

daily, weekly, or monthly projects that implement large goals
strategic. Operational objectives, also called tactical objectives, are
establish with strategic objectives in mind and provide a means for the
management and staff to break a broader strategic objective into tasks
achievable.
1.6 Project life cycle.
 1.6 Project life cycle.

The project life cycle is:

Project performance and control.
Conception and initiation of the project.
Project closure.
Definition and planning of the project.

Launch or execution of the project.

1. Conception and initiation of the project
An idea for a project will be carefully examined to determine if it is beneficial.
Oh no to the organization. During this phase, a decision-making team will identify
if the project can be realistically carried out.

2. Project Definition and Planning

A project plan, the project charter, and/or the project scope may be
written down, outlining the work to be done. During this phase, a team
you must prioritize the project, calculate a budget and a timeline, and determine what
resources are needed.

3. Launch or execution of the project

The tasks of the resources are distributed and the teams are informed of the
responsibilities. This is a good time to bring important information
related to the project.
4. Project performance and control
Project managers will compare the project's status and progress with the plan.
currently, since resources carry out the scheduled work. During this phase, the
project managers may need to adjust schedules or do what is necessary
to keep the project going.

5. Project closure
Once the project tasks are completed and the client has approved the result, it is
an evaluation is necessary to highlight the success of the project and/or learn from the history
of the project.
1.7 Areas of Knowledge
 1.7 Areas of Knowledge

Project integration.
2) Scope of the project.
3) Estimation of times and deadlines.
Cost management.
5) Quality management.
6) Human Resources.
7) Project Communication.
8) Risk management.
 Integration of the project.

21st century management does not consider isolated or lagging pieces. On the contrary,
part of the principle that everything is integrated into a system and that its main function
it is the coordination of the different elements that converge in a project. This
incluye la elaboración y ejecución de un plan y el control de cambios, que deben
to be implemented in an integrated manner, that is, in the system as a whole.

2) Project scope.

This area can be summed up in one word: vision. The project manager must have a clear understanding.
what are its scopes in terms of deadlines and times and, above all, in
what refers to the impact.
 3) Estimation of times and deadlines.

This competition involves the creation of a project route in which it is established

the planned tasks, their deadlines, and the resources available for each one.
One must not forget the integrative character that the schedule must have.
project, that is to say, that each task is part of a value chain.

Cost Management.

The good project manager must manage specific and general costs.
through a previous planning work of resources (both human and
Technicians). Costs should always be estimated and have some margin.
 5) Quality management.

Se trata de una de las características propias de la gerencia de proyectos del siglo

XXI. Those responsible always advocate for implementing actions that allow
evaluate the quality of products, services or content and eliminate all those
obstacles that prevent achieving a higher level of satisfaction. This competence
It should be framed within a corporate Quality Management policy.

6) Human Resources.

The idea is to make decisions that increase the level of productivity and
commitment of those involved in the process. This not only includes systems of
incentives, but also the hiring of highly qualified personnel.
 Project communication.

The project management is also responsible for developing a plan for

communication that adapts to the needs of each case. Such a plan must
essentially contemplate the distribution of information, its fluidity and the
disclosure of the status of each phase of the project, from the first to delivery
definitive.

8) Risk management.

Finally, an essential area in any project is risk management.

that has to do with the identification of the threats it may face
the work team in any phase of execution, as well as the management of those
risks, whether by mitigating their effects or reversing their impact.
1.8 Role of the Project Administrator.
 1.8 Role of the Project Manager.

A Project Manager must carry out the following activities:

1.- Support function.

2.- Resource Management.
3.- Reporting function.
4.- Personnel management.
 1.- Support function.

A project manager plays a vital support role for the director.

project, which has full authority to manage a specific project. A
project manager organizes bookings for important meeting places and
presents reports to the executives or stakeholders on the progress of a project.
Also writes the minutes of important meetings and distributes them to the staff.
that works on the project and the main stakeholders. Ensures that the lines of
communication remains open for all staff to ensure that the
key project objectives are met.
 2.- Management of Resources.

A project manager must have a good understanding of the objectives.

key of a specific project. He will have to assess the financial limitations and
on time and allocate resources effectively. You must ensure that expenses do not
exceed the project restrictions and that the main objectives are delivered
on time and with the project specifications. It will prioritize the most important aspects.
important aspects of a project and coordinate the work methods to complete them.
It also tracks development requests from the relevant departments to
ensure that they have sufficient staff and technical resources to meet the
project objectives.
 3.- Reporting function.

A project manager ensures that the technical documentation is kept up to date.

day during the duration of a project. It also makes regular financial reports.
for the stakeholders and company executives on the project expenses.
It also makes recommendations to change work practices to achieve the
project objectives.
 4.- Staff management.

A project manager must possess excellent organizational skills and

previous experience in personnel management and task delegation. Must ensure
that personnel resources are assigned efficiently so that the staff
qualified be available for the business areas necessary to ensure that the
the project's objectives are achieved on time. A project manager acts as
link with all levels of a company to manage personnel resources,
they must possess excellent written and verbal skills.
1.9 Project management processes.
 1.9 Project management processes.

The fundamental steps for successful project management are:

1. Identification of clear objectives.

2. Selection of the work team.
3. Identification of available and necessary resources.
4. Task distribution and assignment of responsibilities.
 Project Management.

Plan and monitor a project

 Four key factors for the successful management of a project.

The personnel that will intervene, the product that will be delivered, the process that will be applied and the
technology to be used.
 2. Planning.
2.1. Project start.
 2. Planning.
2.1. Project start.

The start of a project consists of carrying out the activities aimed at achieving
the correct start of the project and establish the internal and logistical aspects
necessary for its execution.
During this phase, the execution standards and the relationship model will be established with the
client for the development of the project, identifying the key people and resources. There is
You must share the different points of view and understanding of
the project's objectives by the management and the departments
participants.
 Project start.

It is the kickoff of the project establishing aspects to be carried out to implement the
activities aimed at achieving objectives.
2.2. Project Integration.
 2.2. Project integration.

Project Integration Management includes the processes and activities necessary

to identify, define, combine, unify and coordinate the various processes and activities
from project management direction within the project management process groups.
Examples of the activities carried out by the project management team:

Analyze and understand the scope. This encompasses the project requirements and the
product, criteria, assumptions, restrictions and other influences related to a project and
the way they will be managed or addressed within the project.

Understand how to use the identified information and then transform it into
a plan for project management with a structured approach.

Carry out activities to produce the project deliverables.

Measure and monitor all aspects of the project's progress and take action.
appropriate to meet its objectives.
2.3. Constitutive Act of the project.
 2.3. Constitutive Act of the project.

Developing the Project's Constitutive Act is the process that consists of

desarrollar un documento que autoriza formalmente un proyecto o una fase y
document the initial requirements that meet the needs and expectations of the
interested parties. Establish a cooperation relationship between the executing organization and
the requesting organization (or client, in the case of external projects).
The project officially begins with the signing of the project's charter.
approved. A project director is selected and assigned as soon as possible.
possible, preferably during the preparation of the project's founding document,
but always before starting, it is recommended that the project manager participates
in the preparation of the founding act of the project, as it grants it the
authority to allocate resources to the project's activities.

The project management office is responsible for authorizing the project.

because it acts as a sponsor. If not, there is an executive committee of
portfolio. It must have the appropriate level to finance the project.
Any of them will prepare the founding act of the project, this one remains
authorized with the signature of the Project Director.
 2.3. Constitutive Act of the project.

Document in which the desired achievements of a project are defined, as well as its
scope; generally, it is issued by the initiator or director of the project.
2.4. Project Management Plan.
 2.4. Project management plan.

The project management plan is used to achieve the objectives.

established by the project, through a series of activities. These activities
they include, among others:

Carry out the necessary activities to meet the project requirements.

Create the project deliverables.

Gather, train, and lead the team members assigned to the project.

Obtain, manage and use resources, including materials, tools,

equipment and installations.

Implement the planned methods and standards.

Establish and manage the communication channels of the project, both external
as internal members of the project team.
Generate the project data, such as cost, schedule, technical progress and
of quality and the state, in order to facilitate projections.

•Issue change requests and adapt the approved changes to the scope, to the
plans and the project environment.

Manage the risks and implement the response activities to them.

Manage the vendors and suppliers.

Collect and document the lessons learned and implement the activities
approved process improvements.
The plan also encompasses three types of actions which are:

•Corrective action. A documented directive to execute the work of

project and power, in this way, align the expected future performance of the work
of the project with the project management plan.

•Preventive action. A documented directive to carry out an activity that

it can reduce the likelihood of experiencing negative consequences associated with the
project risks.

Repair of defects. The formally documented identification of a

defect in a component of a project, with a recommendation to repair
said defect or completely replace the component.
 The purpose of project planning

Estimate, schedule, and organize the activities of a goal in a timeframe

determined.
2.5. Project scope versus product scope.
 2.5. Project scope against product scope.

Project Scope. The scope of a project aims to determine

clear, simple, and concrete about the objectives that will be pursued throughout the
development of the project in question, whose completion will lead to its conclusion
successful of that project.

Product Scope. The product scope defines the features and

functions of the product or service that will be delivered as a result of the project.
 Project Scope.

They are the activities carried out to fulfill the delivery of the product.

Product Scope.

These are the characteristics that the product must meet.

Insurance policies.
 Insurance policies.

An insurance policy is a document that validates the insurance contract.

done and signed in agreement by both the insured and the
insurer, in which the rules, rights, and obligations are specified
of the parties involved

We have to understand that an insurance policy is a way to save money.

at the time a disaster or contingency occurs.
2.6. Scope management processes: planning, requirements, and definition
 2.6. Scope management processes: planning, requirements, and definition

Defining the scope involves developing a detailed description of the deliverables and of
product of the project. The following steps can be used as a guide for your
definition:

1. Review the information of the project charter and the requirements

collected as a starting point for defining the scope of the project.
There should be an initial set of defined objectives, deliverables, and requirements.

2. Work with the project sponsor and project stakeholders to

obtain additional information about the project. The scope of the project is defined
through understanding their needs and expectations.

3. Describe the deliverables that are within the scope, mainly the deliverables.
finals and those of the client. Meetings with experts or others may be necessary.
groups that are interested in the project.
 2.6. Scope management processes: planning, requirements, and definition

4. Identify the requirements and other elements that are out of scope.

5. Gather the constraints and assumptions that affect the scope.

6. Draft the Project Scope Statement.

7. Create the Work Breakdown Structure.

 3. Programming.
3.1. Definition and sequence of activities.
 3. Programming.
3.1. Definition and sequence of activities.

Programming. Programming is a process used to conceive and organize.

the actions that will be carried out within the framework of a project.

Sequence of activities. It consists of determining the dependencies between

activities, that is, what execution relationship exists between them, in what sequence
They are executed. Each of the activities in the schedule has at least one
successor or predecessor activity, except for the first and last.
It is common to establish a starting point as the first activity and a final point as the last.
activity a point of completion. In this way, all the activities of our
The schedule will be related to each other.

The Sequence of Activities is divided into three:

Entries.
Tools and techniques.
Outputs.
 Entries.

Plan de Gestión del Cronograma:Identifica la metodología y la herramienta de

programming to be used in the Project, which will determine the way in which it can be done
sequence the activities.

Lista de actividades con sus atributos y listado de hitos:La lista de actividades

it contains the necessary activities of the schedule that must be sequenced.
Attributes can describe a necessary sequence of events or define types.
of relationships. Similarly, the milestones may include scheduled dates
for specific milestones, which can influence the sequencing of activities.

Project Scope Statement: may include characteristics of the outcome,

product or service of the Project that may affect the sequencing of
activities such as description of subsystems, components or elements, etc.
 Tools and techniques

Determination of dependencies:

Mandatory: "hard logic", it is a dependency that must be fulfilled

obligatorily, such as those required by contract.
Discretionary: the 'preferred logic, soft preference', this type of dependency,
determine a sequence or relationship based on the knowledge of the work to be done,
but another acceptable sequence can also be established. This type of dependency
it must be documented.
External: the start of an activity depends on something foreign or external to the Project.
They tend to be outside the control of the Project team.
Internal: An activity cannot start until another internal one has finished or that
it depends on the Project team

Advances and delays:

Advances allow the successor activity to start before the relationship.

established. Delays cause the succeeding activity to be delayed for a time
determined after the established relationship.
 Exits.

Project Schedule Network Diagram: Schematic representation of the

activities of the project schedule and its logical relationships, also
called dependencies.
3.2. Resources and duration of activities.
 3.2. Resources and duration of the activities.

The process of estimating the duration of Schedule activities uses

information about the scope of the work of the activity. As well as about the types of
necessary resources, the estimated quantities of resources, and the schedules of
availability of resources. The inputs to make the estimates of duration
The activities usually start from the members of the Project team who are present.
more familiar with the nature of the content of the work of the activity.
3.3. Timelines.
 3.3. Timelines.

It is a list of all the terminal elements of a project with their dates.

scheduled start and end, also known as Gantt Chart.
 Gantt chart.

It is a bar graph with time measurement on the axis.

horizontal and the activities that will be scheduled on the vertical axis. The
bars show the production, both planned and actual, during a certain
period. The Gantt chart visually shows when it is supposed to
that the activities must be completed, which are compared against the progress
real that each one has. It is a simple but important device, that
it allows administrators to easily specify what is still remaining
pending
Planning to be completed
- Organization - Directionfor- Control
the completion
- Leads toof a work or project, and so on
Objective
determine if it is ahead of schedule or behind.
 Gantt chart.

Planning - Organization - Direction - Control - Leads to Objective

3.4. Critical Path.
 3.4. Critical Path.

In project management and administration, a critical path is the sequence of

terminal elements of the project network with the longest duration among them,
determining the shortest time in which it is possible to complete the project. The
the duration of the critical path determines the duration of the entire project. It is also
known as the Pert Network.
 PERT Network Analysis
Program Evaluation and Review Technique

What happens if an administrator has to plan a large project, or the

development of a new product. Projects like this require coordination of
hundreds or thousands of activities, some of which must be carried out
simultaneously, and others that cannot be started until
they have finished some previous activities.
PERT shows the sequence of activities needed to complete.
a project and the time or costs associated with each activity.
Planning - Organization
In PERT, - Direction
three main terms - Control - Leads to
are used: Objective

Events.-Terminating points that represent the conclusion of activities.

Activities.- Time or resources needed to move from one event to another.
Critical Path.- Longest sequence of activities.
 PERT Network Analysis (Example)

Let’s assume you are the superintendent of a construction company. You are given
I am in charge of supervising the construction of an office building, since
time is money in a business, you have to determine how much
Time will be taken for the construction of the building. It has already been subdivided.
the project in activities and events and their time estimates that
wait is necessary to complete each activity.
Your PERT network tells you that if everything goes as planned, 50 will be required.
Planning - Organization
weeks to complete- Direction - Control
the building. This is- Leads to by identifying theObjective
calculated critical path.
from the network: A-B-C-D-G-H-J-K. Any delay in the execution of the
Events along this route will delay the completion of the entire project.
 PERT Network Analysis (Example)

Event Description Time in Weeks Previous Event

A Approve designs and obtain permits 10 None
B Excavate underground parking 6 A
C Construction of black work 14 B
D Floor construction 6 C
E Window installation 3 C
F Ceiling installation 3 C
G Interior Wiring Installation 5 D,E,F
H Installation of elevators 5 G
I Install floor coverings and panels 4 D
J Install doors and internal decorations 3 I, H,
K Deliver the building to the management 1 J
 PERT Network Analysis (Example)

5
D I 3

5 1
6
J K
10 6 14 3 5 5
Planning - Organization - Direction - Control - Leads to 3 Objective
Start A B C E G H

3 5

F
Interest rate.
 Interest rate.

It is the amount paid in a unit of time for each unit of capital.

inverted.

The interest rate represents the return on savings that can be obtained from
manage a certain rate and thus be able to obtain a financial return.
 Compound interest rate.

Compound interest represents the accumulation of interest that has been generated on
a period determined by an initial or principal capital at an interest rate
during periods of imposition.

This rate is the best for saving as it can provide you with a higher return.
performance although it must be in a medium to long-term period.
Nominal and real interest rate.
 Nominal and real interest rate.

Nominal Interest Rate. It is the rate offered without considering inflation.

Real Interest Rate. It is the rate offered considering inflation.

Money market instruments.
 Money market instruments.

Within the money market, we can find the following instruments:

•Cetaceans.
•Pagaré bancario.
Bank acceptances.
Federal government bonds.
Bonds, tesobonos.
Bank bonds.
 4. Costs.
4.1. Types of Costs
 Cost Analysis

Fixed Costs: Represent the total monetary expenditure incurred even if not used.
produce nothing; it does not vary even if the amount of production varies. Examples: Rent, payment
of debts, interest on debts, fixed salaries.

Variable Costs: Represent the expenses that vary with the level of production, such as the
raw materials, labor costs, and fuel and includes all costs
that are not fixed.

•Total Cost: Represents the minimum total monetary expenditure required to obtain each
production level.

CT = CF + CV
 Marginal Cost

Marginal Cost: It is the additional cost incurred to produce 1 more unit.

Let's suppose that a company is producing 1,000 compact discs at a cost
total of $10,000. If the total cost of producing 1,001 disks is $10,006, the cost
The marginal cost of production is $6 for disk 1,001.

CM = CT1–CT2

•Average Cost: The average cost (AC) is, like marginal cost, one of the
concepts most used in companies; comparing price with income
average, they can know whether or not they are obtaining a benefit. The average cost is the
total cost divided by the number of units produced.

CMe = Total Cost = CT = CMe

Production q
 The Average Fixed Cost and the Average Variable Cost.

Average Fixed Cost: As a company sells more, it can spread its costs.
general among an increasing number of units. (Their costs are divided among more
produced parts, therefore there is greater profit)

CFMe = CF / q

Average Variable Cost: As a company sells more, its variable costs go

increasing, this is due to the need for more Labor, more Raw Material, a
local bigger, etc.

CVMe = CV / q
4.2. Cost Management Processes.
 4.2. Cost Management Processes.

Plan the Cost Management: The Project Cost Management must

consider the needs of the stakeholders, as different stakeholders will measure
the costing of different forms and at different times. This process establishes the
policies, procedures, and documentation necessary to plan, direct, execute and
control the costs.
Estimate the Costs: It involves developing an approximation of the resources
financial resources needed to complete the project's activities.
Develop the Budget: It consists of adding the estimated costs of activities.
individuals or work packages to establish a cost baseline
authorized.
Control Costs: It involves monitoring the project's situation to update
the budget for it and manage changes to the cost baseline.
4.3. Cost Planning.
 4.3. Cost Planning.

Project Cost Management includes the processes involved in estimating,

budget and control costs so that the project is completed within the
approved budget. It must take into account the requirements of the stakeholders for the
obtaining the costs, as the various stakeholders will measure the costs of
Project in different ways and at different times.
The work necessary to carry out the three processes of Cost Management,
it must be preceded by a planning effort by the team of
Project, which is part of the process of Developing the Management Plan for the
Project. From it, we will obtain, among others, the Cost Management Plan, which
determina el formato y establece los criterios necesarios para planificar, estructurar,
estimate, budget, and control the costs of the Project. Among other things, it can
establish the following:

Level of accuracy of cost estimates for activities.

Units of measurement used in the measurements.
•Relationship of control accounts. That is, each control account is assigned a
code linked to the organization's accounting system.
Control thresholds. Percentage of variation or deviation allowed before
act, with respect to the cost baseline of the Project Management Plan.
•Rules for measuring performance. Earned value management.
Report format.
Description of the processes.
4.4. Cost Estimation.
 4.4. Cost Estimation.

It consists of making an approximation of the monetary resources necessary for

complete the project activities. The accuracy of the cost estimate of a
the project increases as the project progresses, so it is an iterative process.

Costs are estimated for all resources assigned to the project, that is,
work resources, material resources, cost of services and facilities, and possible
costs for contingencies.
 Cost Estimation.

The estimation of the costs of activities may require the results of

los procesos de planificación de otras áreas como por ejemplo el cronograma del
project, the risk register, and the allocation of personnel. Because of this the
estimates cannot be considered final until such information is available.
If the executing organization does not have formal cost estimators.
trained, the project team must provide the resources and experience
necessary to carry out the project cost estimation

Therefore, we can define cost estimation as an assessment

quantitative estimate of the probable costs of the resources needed to complete the
project activities.
The Cost of Credit.
 The Cost of Credit.

The credit or credit contract is a financial operation in which a person

grants a loan for a specified amount of money to another person and in which
the latter commits to pay said credit with the established interest in the
time or term defined according to the conditions established for said loan.

We have to remember that the cost of credit can be measured in the amount of money and
in amount of time.
 Example.

The owner of the hardware store on the corner receives a loan of $200,000, capital.
payable in a single payment in two years. If the interest rate is 24% per year, with
interest payable monthly, how much will be paid in interest each month?

Préstamo:$200,000
Annual interest = Amount x Rate.
Tasa:24%
Years: 2 Interest payable = Annual interest x number of years.
Meses de un año: 12
Monthly interest = Interest payable / number of months to pay
Months of two years: 24

$200,000 x .24 = $48,000

$48,000 x 2 = $96,000

$96,000 / 24 = $4,000 pesos

Payroll credit.
 Payroll credit.

Credit issued by a financial institution that allows the holder to access a balance.
superior to that available in your checking account, which the client must amortize
according to agreed conditions.
SME Credit.
 SME Credit.

Financial instrument aimed at increasing working capital, projects of

equipment and purchase of fixed assets of companies.
Microcredit
 Microcrédito

A microcredit is a loan primarily aimed at people who want

start a small business or become self-employed to develop some activity
independent productive.
4.5. Budget.
 4.5. Budget.

The term budget refers to the calculation, presentation, planning, and advance formulation of
the expenses and income of an economic activity. It is an action plan aimed at
to meet a set objective, expressed in financial terms, which must
to be fulfilled in a specific time, generally annually and under certain conditions. This
the concept applies to each and every one of the responsibility centers of the
organization.1The budget is the annual development tool of companies or
institutions whose plans and programs are formulated for a period of one year.
 Functions.

The main function of budgets relates to financial control.

organization.

Budgetary control is the process of discovering what is being done,

comparing the results with their previously budgeted data in
correspondence, this to be able to verify the achievements or remedy the differences.

3. Budgets can play both preventive and corrective roles.

of the organization.

Budgets are useful in most organizations such as:

utilitarians (business companies), non-utilitarians (government agencies)
large (multinational, conglomerate) and small companies.
 Functions.

5. Budgets are important because they help minimize risk in the

operations of the organization.

6. Through budgets, the company's operational plan is maintained.

within reasonable limits.

They serve as a mechanism for the review of the company's policies and strategies.
direct them towards strategic objectives.
 5. Risk Analysis.
5.1. Basic concepts of risk.
 5. Risk Analysis.
5.1. Basic concepts of risk.

Financial risk is the probability of an adverse event and its consequences.

financial risk refers to the probability of the occurrence of an event that has
negative financial consequences for an organization.
Risk monitoring and control techniques
 Monitoring and risk control techniques

Reevaluation, audits, analysis of variations and trends, performance measurement,

analysis of reserve and meetings on the status of the project.
Nominal and real interest rate.
 Objectives of risk management

Increase the probability and impact of positive events, as well as decrease the
probability and the impact of negative events for the project.
Quality management
 Quality management

It is statistical process control as a collection of usable methods and

scoreable for the control of products and processes.
Human Resources Plan.
 Human Resources Plan.

It is the process by which roles within the project are identified and documented.
It is the phase in which the results within the project are specified.
communication management.
 communication management.

Create, collect, distribute, store, retrieve, and dispose of information according to the
communication management plan.
Information for monitoring and risk control of the project
 Information for monitoring and controlling project risks

Risk register, risk management and control plan, progress of deliverables,

schedules and costs, as well as performance reports.
Project cost control.
 Project cost control.

The project's cost control includes monitoring, ensuring, reporting and

influence the changes in costs and their control.
Earned Value Management.
 Earned value management.

Project management technique that enables controlling the execution of a project to

through its scope, cost, and schedule.
Closing of acquisitions.
 Closing of acquisitions.

It is the process of finalizing each acquisition for the project so as not to affect the
budget.