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In guiding a project, particularly one in the building and construction industry, an intricate knowledge of Project Cost Management is critical in determining the project’s outcome. In reality, people practice many of the concepts involved in Project Cost Management however our course will allow students to fully utilise and benefit from such a detailed understanding of Project Management Diploma theory.
Please note that this course is priced in US dollars.
Duration of Study
The pace at which each student studies is different. The nominal hours for this course are 40 hours, however, this can vary greatly depending on your previous experience and study techniques. Student support is available by asking a question online or visiting our website.
We offer our support as a Registered Training Organisation (Provider number 22450)
As a RTO (Provider number 22450), Exner Education is responsible for delivering quality training and assessment.
Exner Education’s Project Cost Management course serves to provide an understanding of the theory and practice of project management in the building and construction industry.
This Udemy course also enables the student to attain a nationally accredited professional certificate in the unit of BSBPMG514A - Manage Project Cost.
This course or unit of competency is selected from an Australian Nationally endorsed business services training package. It is also one of the 12 units that make up the Diploma of project management.
If you are an Australian student and would like to be assessed for this unit of competency, please visit our website for more information. Upon successful completion of the assessment, you will qualify to be awarded a Nationally accredited certificate of attainment within the VET sector.
We recommend that students purchase a copy of "A Guide to the Project Management Body of Knowledge", Fifth Edition (PMBOK® Guide) ©2013 Please note that "PMBOK" is a registered mark of the Project Management Institute, Inc.
Upon the successful completion and submission of the Unit's assessment task, participants will be awards a Statement of Attainment for Unit of Competency Manage Project Cost BSBPMG514A.
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|Section 1: Study Guidelines|
Watch this course intro to gain an understanding of the Elements of Competency this course addresses, how the course is delivered - and what the topics cover. It also talks about how to complete the assessment task at the end of the course in order to be assessed and receive a Certificate of Competency.
Top 10 Cost Risk in ConstructionPreview
|Section 2: Manage Project Cost - Full Course Notes|
Full Course Notes
|Section 3: Management of Project Costs|
Managing project costs is a vital function of project management – and it does not simply mean just managing the “costs” on your project. The reality of cost management is that you must manage everything that incurs a cost, because if you don’t, the costs will just keep on climbing. In building and construction projects, a strong, disciplined management of cost will go a long way in reducing variability of project performance and ensure that successful project delivery can be repeated and improved.
This lecture provides and overview of the key aspects of managing project cost.
Below is also a diagram outlining the six stages of project cost management
The first stage of estimating costs and developing a budget involves the activity of identifying the resources required for each task within a project. To determine the resources required to complete each activity within the project, you need to have a clear understanding of the work required to achieve the project objectives.
You will develop an understanding of each of these aspects in this lecture.
The documents referenced in the video are downloadable and viewable here. Don't forget to consider Case Study 1. .
Determining Resource Requirements
A component of the role of a project manager on any complex project is the responsibility for managing finances, or costs. This involves the process of identifying the cost of individual resources, creating a project budget for approval by project authorities and keeping a record of anticipated costs and the assumptions or information used to estimate them. Researching and accounting for the total costs associated with completing every task and activity identified in the project WBS is often necessary to support successful cost management.
The key components of how to estimate project costs is explored in this lecture. Don't forget to download and view the additional diagrams referred to in the video.
|Lecture 7||1 page|
The following schedule is an estimate prepared for the Crisp Street Site Development. This site involved the building of 4 residential units. The estimate has been prepared for the underground pipe works only - being Item 1 - Water Supply.
Estimating Project Costs
|Section 4: Identify Resource Requirements|
There are numerous strategies available for identification of resources that may be required. Using the experience or employees can be of great benefit when it comes to assessing amounts required. A review of records from similar projects can also be useful. Reviewing the project assumptions can also assist in making more accurate estimates of amount of resource required.
It is most often the responsibility of the project manager to identify the required amount of the resource needed. This lecture teaches what to look for with regard to project resources when preparing a project budget and how to successfully manage resources.
The table referred to in the Video and Case Study 2 is downloadable below.
Identifying Resource Requirements
|Section 5: Manage Project Finances|
After creating and gaining approval for a budget the next step is to then prepare a cost- management plan that indicates how you will manage costs. The processes and procedures for monitoring and controlling costs throughout the project are recorded on this plan.
By preparing a comprehensive plan this then ensures everyone understands how costs will be managed and that they will be managed appropriately, accurately and in accordance with the project agreements and documentation.
You will learn how to create and implement a cost management plan in this lecture.
Dont forget to download and view the diagrams referred to in the video.
Implementing a Cost Management Plan
The workload associated with reporting financial performance can be significantly reduced by defining how financial information will be gathered and evaluated during the planning phase. It also helps ensure that you have access to current financial information that supports cost decisions.
This lecture covers how to gather information and track costs to ensure your project stays within to predefined budget.
Case Study 3 is downloadable below, as well as the other diagrams referred to in the video.
Monitor and Control Costs
A critical part of managing project costs throughout the project is developing and implementing processes and procedures to monitor expenditure and control costs. In addition to creating and supervising efficient processes, project managers need, throughout the project, to apply their numeracy and budgeting skills to monitor and evaluate financial performance.
This lecture covers the key aspects of the developing and implementing the processes and procedures for monitoring expenditure and controlling costs.
Case Study 4 can be downloaded here.
Attached are two real sample cost reports from construction projects for your to consider.
The first one relates to the demolishing and rebuild of road and tram depot.
The second one related to the building of a basic residential home.
Implement Financial Management Processes
|Section 6: Identify Cost Variations|
So they can identify any variations between the expected cost and the actual cost, project managers monitor costs. Understanding the reasons for variations allows you to evaluate your options and recommend appropriate action for any variations to be controlled.
You will explore how to identify variations in the lecture, why they occur and how to best manage changes to the project budget.
Case Study 5 can be located here as well as the Variation Diagrams referred to in the video.
|Section 7: Maintaining Objectives|
Upon securing approval for strategies to manage cost variation, project managers must then implement the agreed actions and ensure the outcome is monitored.
Case Study 6 can be downloaded here.
Maintain Financial Objectives
|Section 8: Project Completion|
Finalising a project involves more than just finishing work on the project deliverables. Project managers must also create final reports, evaluate the cost-management procedures and identify any opportunities to improve performance. If the project involved a government or other funding body, then extensive documentation may be required to fulfil the contractual requirements.
Case Study 7 can be downloaded here..
Financial Completion Activities
Evaluating the effectiveness of cost-management processes and procedures by reviewing project outcomes and cost management records is an important responsibility for project managers.
Case Study 8 can be downloaded here as well as other tables referred to in the video.
Review Project Outcomes
Resolving cost-management issues that arise throughout the project are involved when managing project costs. Analysing these issues and identifying potential improvements can contribute to the continuous improvement of organisational procedures. It also helps you develop your project management skills.
Case Study 9 can be downloaded here as well as other tables referred to in the video.
Cost Issues and Improvements
|Section 9: Sample: Comprehensive Cost Report on a Construction Project|
|Lecture 17||17 pages|
In reporting the monthly costs on construction projects for internal management purposes, the "best practice" method of reporting is shown in this example and includes the following items:
1. Project Cost Report - which sets out the original cost estimate compared with the current costs and forecast cost to complete. The report should break costs down into indirect and direct costs related to the project. Additional information can also be included in the report about HR and safety related issues and any formal notices arising under the contract or any formal contract claims or dispute it
2. Contract Status - a comprehensive cost report on a construction contract should also include an assessment of the construction contract status which focuses on the income and expenditure associated with the contract's progress. The report attached looks at a comparison of the original contract status, and any variations or adjustments that have occurred - and keep track of the profit margin that will be made on the contract.
3. A CVO (Client Variation Register) is also often included in a monthly cost report. It lists any additions or reductions the client has made to the construction contract scope that result in a change to the contract value, and therefore need to be taken into account in assessing the total work and cost of work on the project.
4. Over/Under Claims report highlights the amount of work charged to a project in comparison to the amount of cost charged to the project owner. Typically, costs are charged to each category of work. It is possible to either overclaim or underclaim the amount of work done on a particular area to the client, with in the limits of the estimated total costs. The Over/Under claim report tracks where particular items of work and claims made for payment from the client compared to the amount of work charged to that category of work.
5. A Progress Claim is the form in which the project management will claim payment from the client. A progress claim is generally very detailed, setting out categories of work, quantities of material or amounts of labour charged for particular categories. It also sets out any additional items of work to be undertaken. In conclusion it records the total cost claimed, the % of progress that has been achieved and the value of this months claim. For this reason, the monthly claim is called the Progress Claim.
|Lecture 18||1 page|
This sample cost report is for the building of a small house in Newtoun. The report shows the budgeted or estimated cost for each line item of work, compared to actual costs incurred to date. It then shows the total costs to complete and compares this to the original budgeted costs. This way you can track whether you have overspent or underspent in any category and its the best way to monitor cost control.
|Section 10: Detailed Reference Paper on Construction Costs|
Detailed research paper on construction costs
|Section 11: Assessment Task: Manage Project Cost|
|Lecture 20||1 page|
To access the assessment task - you need to make sure you have logged into the Student Database at this link and formally register as a student - here is the linkhttp://x-ed.com.au/NewUser_assessment.asp. You can download the assessment task here as a word document.
You will need to complete an assessment cover sheet and email it back with your assignment. (A copy is attached here and is also downloadable from the Student Database.
You will also need to select a supervisor who can review your assessment and confirm you have addressed the required skills and knowledge for the course. This supervisor can be a current work colleague or someone you have worked with in the past who will sign your Observation Checklist. The supervisor would need to have sufficient experience to confirm you have achieved the required skills and knowledge. A copy of the Observation Checklist is attached here and is also downloadable from the Student Database.
Assessments can be emailed back to us at email@example.com.
Good Luck with your assessment task - don't forget to send us any questions that you have along the way.
|Lecture 21||7 pages|
The following downloadable documents outline all the performance criteria, required skills and knowledge and other information relating to this unit. These documents may assist you when attempting to complete the Assessment Task.
There is another downloadable document which is a Model Answer to the Assessment Task for this unit. It is not necessarily a direct response to the Assessment Task but a guide to the kinds of responses that past participants have submitted.
Exner is an integrated education and consulting firm with over 25 years of experience providing an extensive range of professional management services to the construction industry. Our hands-on experience includes design and construction, expert claims quantification and management, project management, business systems consulting, value for money models, safety in design and risk management systems.
Exner Education is an ASQA registered RTO and is the training development and delivery branch of Exner. From its practical experience and knowledge Exner Education has designed, developed and delivered construction specific training over the past 15 years. Exner Education provides a 'hands on' practical approach to training, developed and delivered by people who have real current practical experience in the field and are qualified VET sector trainers. This gives Exner a unique ability to balance both theoretical teaching knowledge complemented with current 'best practice' work examples.
Our Training & Education experience includes the instructional design of training ranging from:
· safety and site compliance;
· project management including from tender preparation, claims management to project close out;
· engineering practices; and,
· corporate improvement strategies.
Exner Education has designed, developed and delivered training for both large and small companies as well as government authorities including, Leighton Contractors, Pro-Build, Grocon, Schiavello, MBAV, HIA, VMIA, Nicholson Construction, Johns Lyng, APM Group, Victorian Managed Insurance Authority, VicRoads, Department of Treasury and Finance and Victorian Catchment Management Authority.
Exner continues to develop its online learning 'experience' and provides a unique interactive delivery methodology which gives students world first teaching tools, combining Exner's practical construction knowledge with core theory to further enhance the students learning experience.