工程管理专业外文翻译--项目成本减少与控制

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外文原文

Project Budget Monitor and Control

AuthorYin Guo-li NationalityAmerican

Derivation Management Science and Engineering. Montreal: Mar 20, 2010 .

With the marketing competitiveness growing, it is more and more critical in budget control of each project. This paper discusses that in the construction phase, how can a project manager be successful in budget control. There are many methods discussed in this paper, it reveals that to be successful, the project manager must concern all this methods.

1. INTRODUCTION

The survey shows that most projects encounter cost over-runs (Williams Ackermann, Eden, 2002,pl92). According to Wright (1997)'s research, a good rule of thumb is to add a minimum of 50% to the first estimate of the budget (Gardiner and Stewart, 1998, p251). It indicates that project is very complex and full of challenge. Many unexpected issues will lead the project cost over-runs. Therefore, many technologies and methods are developed for successful monitoring and control to lead the project to success. In this article, we will discuss in the construction phase, how can a project manager to be successful budget control.

2. THE CONCEPT AND THE PURPOSE OF PROJECT CONTROL AND MONITOR

Erel and Raz (2000) state that the project control cycle consists of measuring the status of the project, comparing to the plan, analysis of the deviations, and implementing any appropriate corrective actions. When a project reach the construction phase, monitor and control is critical to deliver the project success. Project monitoring exists to establish the need to take corrective action, whilst there is still time to take action. Through monitoring the activities, the project team can analyze the deviations and decide what to do


and actually do it. The purpose of monitor and control is to support the implementation of corrective actions, ensure projects stay on target or get project back on target once it has gone off target

3. SETTING UP AN EFFICIENT CONTROL SYSTEM

For the purpose of achieving cost target, the manager need to set up an efficient management framework including: reporting structure, assessing progress, and communication system. The employees' responsibility and authority need to be defined in the reporting structure. The formal and informal assessing progress can help getting a general perspective between reality and target. It is significant to help identify what is the risk and should be monitored and controlled. Project success is strongly linked to communication. The efficient communication system benefit for teamwork and facilitate problem solving ( Diallo and Thuillier, 2005 ).

4. COST MONITOR AND CONTROL 4.1 Ranking the priority of monitoring

In construction phase, many activities are carried out based on the original plan. It is need to know what kind of activities or things are most likely to lead the project delay and disruption. Therefore, the first step is ranking the priority of the activities. Because the duration of a project is determined by the total time of activities on critical path, any delay in an activity on the critical path will cause a delay in the completion date for the project (Ackermann Eden, Howick and Williams,2000,p295). Therefore, the activities on critical path should firstly to be monitored and controlled. Secondly, monitoring the activities with no free float remaining, a delay in any activity with no free float will delay some subsequent activity inevitably. These subsequent delays will discomfit the resource schedule significantly. Some resources are unavailable because they are committed elsewhere. Thirdly, monitoring the activities with less than a specified float, because if an activity has very little float, it might use up the time before control decision is made once such an activities has a variance with the target. Fourthly, managers should monitor high risky activities. High




risky activities are most likely to overspend. Fifthly, managers should monitor the activities using critical resource. Some resource is critical because they are very expensive or limited (Cotterell and Hughes, 1995).

4.2Methods of cost control

The main cost of a project includes staff cost, material cost and delay cost. To control these cost, managers should first set up a cost control system to: a) Allocate responsibilities for administration and analysis of financial data b) Ensure all costs are properly allocated against project codes c) Ensure all costs are genuinely in pursuit of project activities d) Check that other projects are not using the budget.

Then, managers should monitor and control change to the project budget. It means the following things:

a) Concerned with key factors that cause changes to the budget b) Controlling actual cost changes as they occur - Monitor cost performance to detect variances

- Record all appropriate changes accurately in the cost baseline

- Preventing incorrect, unauthorized changes being included in the cost baseline

- Determine positive and negative variances

- Integrated with all other control processes (scope, change, schedule, quality)

As a project is dynamic, sometimes the project managers know the project is going out off target by monitoring, but don't know the best action to take. In this circumstance, net present value (NPV) should be used as an ongoing monitor and control mechanism, because NPV takes account of the time element and discounts future cash flows, it is the result of the time effect on cash

4.3 Change monitor and control

Voropajev (1998) states that dynamic changes of project environment will influence the process of project implementation, the project itself and may cause heightened risk. When carried out some activities, the methods different


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