工程造价专业外文文献翻译中英文对照.docx

1、工程造价专业外文文献翻译中英文对照外文文献：Project Cost Control: The Way it WorksBy R. Max WidemanIn a recent consulting assignment we realized that there was some lack of understanding of the whole system of project cost control, how it is setup and applied. So we decided to write up a description of how it works. Proj

2、ect cost control is not that difficult to follow in theory.First you establish a set of reference baselines. Then, as work progresses, you monitor the work, analyze the findings, forecast the end results and compare those with the reference baselines. If the end results are not satisfactory then you

3、 make adjustments as necessary to the work in progress, and repeat the cycle at suitable intervals. If the end results get really out of line with the baseline plan, you may have to change the plan. More likely, there will be (or have been) scope changes that change the reference baselines which mea

4、ns that every time that happens you have to change the baseline plan anyway.But project cost control is a lot more difficult to do in practice, as is evidenced by the number of projects that fail to contain costs. It also involves a significant amount of work, as we shall see, and we might as well s

5、tart at the beginning. So let us follow the thread of project cost control through the entire project life span.And, while we are at it, we will take the opportunity to point out the proper places for several significant documents. These include the Business Case, the Request for (a capital) Appropr

6、iation (for execution), Work Packages and the Work Breakdown Structure, the Project Charter (or Brief), the Project Budget or Cost Plan, Earned Value and the Cost Baseline. All of these contribute to the organizations ability to effectively control project costs.FootnoteI am indebted to my friend Qu

7、entin Fleming, the guru of Earned Value, for checking and correcting my work on this topic.The Business Case and Application for (execution) FundingIt is important to note that project cost control is most effective when the executive management responsible has a good understanding of how projects s

8、hould unfold through the project life span. This means that they exercise their responsibilities at the key decision points between the major phases. They must also recognize the importance of project risk management for identifying and planning to head off at least the most obvious potential risk e

9、vents.In the projects Concept Phase Every project starts with someone identifying an opportunity or need. That is usually someone of importance or influence, if the project is to proceed, and that person often becomes the projects sponsor. To determine the suitability of the potential project, most

10、organizations call for the preparation of a Business Case and its Order of Magnitude cost to justify the value of the project so that itcan be compared with all the other competing projects. This effort is conducted in the Concept Phase of the project and is done as a part of the organizations manag

11、ement of the entire project portfolio. The cost of the work of preparing the Business Case is usually covered by corporate management overhead, but it may be carried forward as an accounting cost to the eventual project. No doubt because this will provide a tax benefit to the organization. The probl

12、em is, how do you then account for all the projects that are not so carried forward If the Business case has sufficient merit, approval will be given to proceed to a Development and Definition phase.In the projects Development or Definition Phase The objective of the Development Phase is to establis

13、h a good understanding of the work involved to produce the required product, estimate the cost and seek capital funding for the actual execution of the project. In a formalized setting, especially where big projects are involved, this application for funding is often referred to as a Request for (a

14、capital) Appropriation (RFA) or Capital Appropriation Request (CAR). This requires the collection of more detailed requirements and data to establish what work needsto be done to produce the required product or deliverable. From this information, a plan is prepared in sufficient detail to give adequ

15、ate confidence in a dollar figure to be included in the request. In a less formalized setting, everyone just tries to muddle through.Work Packages and the WBSThe Project Management Plan, Project Brief or Project Charter If the deliverable consists of a number of different elements, these are identif

16、ied and assembled into Work Packages (WPs) and presented in the form of a Work Breakdown Structure (WBS). Each WP involves a set of activities, the work that is planned and scheduled as a part of the Project Management Plan. Note, however, that the planning will still be at a relatively high level,a

17、nd more detailed planning will be necessary during execution if the project is given the go ahead. This Project Management Plan, by the way, should become the bible for the execution phase of the project and is sometimes referred to as the Project Brief or the Project Charter. The cost of doing the

18、various activities is then estimated and these estimated costs are aggregated to determine the estimated cost of the WP. This approach is known as detailed estimating or bottom up estimating. There are other approaches to estimating that well come to in a minute. Either way, the result is an estimat

19、ed cost of the total work of the project.Note: that project risk management planning is an important part of this exercise. This should examine the projects assumptions and environmental conditions to identify any weaknesses in the plan thus far, and identify those potential risk events that warrant

20、 attention for mitigation. This might take the form of specific contingency planning, and/or the setting aside of prudent funding reserves.Request for capitalConverting the estimate However, an estimate of the work alone is not sufficient for a capital request. To arrive at a capital request some co

21、nversion is necessary, for example, by adding prudent allowances such asoverheads, a contingency allowance to cover normal project risks and management reserves to cover unknowns and possible scope changes. In addition, it may be necessary to convert the estimating data into a financial accounting f

22、ormatthat satisfies the corporate or sponsors format for purposes of comparison with other projects and consequent funding approval. In practice all the data for the type of bottom up approach just described may not be available.In this case alternative estimating approaches are adopted that provide

23、 various degrees of reliability in a top down fashion. For example:Order of Magnitude estimate a ball park estimate, usually reserved for the concept phase only Analogous estimate an estimate based on previous similar projectsParametric estimate an estimate based on statistical relationships in hist

24、orical data Whichever approach is adopted, hopefully the sum thus arrived at will be approved in full and proves to be satisfactory! This is the trigger to start the Execution Phase of the projectNote: Some managements will approve some lesser sum in the mistaken belief that this will help everyone

25、to sharpen their pencils and work smarter for the benefit of the organization. This is a mistaken belief because management has failed to understand the nature of uncertainty and risk in project work. Consequently, the effect is more likely to result in corner cutting with an adverse effect on produ

26、ct quality, or reduced product scope or functionality. This often leads to a game in which estimates are inflated so that management can adjust them downwards. But to be fair, management is also well aware that if money is over allocated, it will get spent anyway. The smart thing for managements to

27、do is to set aside contingent reserve funds, varying with the riskiness of the project, and keep that money under careful control.Ownership of approved capital If senior management approves the RFA as presented, the sum in question becomes the responsibility of the designated project sponsor. Howeve

28、r, if the approved capital request includes allowances such as a Management Reserve, this may or may not be passed on to the projects sponsor, depending on the policies of the organization. For the approved RFA, the project sponsor will, in turn, further delegate expenditure authority to the project

29、s project manager and will likely not include any of the allowances. An exception might be the contingency allowances to cover the normal variations in work performance. The net sum thus arrived at constitutes the project managers Approved Project Budget.Note: If management does not approve the RFA,

30、 you should not consider this a project failure. Either the goals, objectives, justification and planning need rethinking to increase the value of the projects deliverables, or senior management simply has higher priorities elsewhere for the available resources and funding.The Projects Execution Pha

31、seThe project managers Project Budget responsibility Once this Approved Project Budget is released to the project manager, a reverse process must take place to convert it into a working control document. That is, the money available must be divided amongst the various WBS WPs that, by the way, have

32、probably by now been upgraded! This results in a project execution Control Budget or Project Baseline Budget, or simply, the Project Budget. In some areas of project management application it is referred to as a Project Cost Plan. On a large project where different corporate production divisions are involved, there may be a further intermediate step of creating Control Accounts for the separate divisions, so that each division subdivides their allocated money into their own WBS WPs. Observe that, since the total Project Budget rec