MicrosoftВ® Office Project 2003 Step by Step (Step by Step (Microsoft))

Almost all projects have some financial aspect, and cost limits drive the scope of many projects. Tracking and managing cost information allows the project manager to answer such important questions as

• What is the expected total cost of the project, based on our task duration and resource estimates?

• Are we using expensive resources to do work that less expensive resources could do?

• How much money will a specific type of resource or task cost over the life of the project?

• Are we spending money at a rate that we can sustain for the planned duration of the project?

For the TV commercial project, you have been entrusted with pay rate information for all people resources used in the project. In the information below, note that the fees for the camcorders, the lights, and the editing lab are rental fees. Because the Southridge Video company already owns the reflector kit and camera booms, you will not bill yourself for them.

In this exercise, you enter cost information for each resource.

1. In the Resource Sheet, click the Std. Rate field for resource 1, Garrett R. Vargas.

2. Type 800/w and press [Enter].

   Garrett’s standard weekly rate of $800 per week appears in the Std. Rate column.

3. In the Std. Rate field for resource 2, Jim Hance, type 18.75/h, and press [Enter].

   Jim’s standard hourly rate appears in the Std. Rate column. Your screen should look similar to the following illustration:

4. Enter the following standard pay rates for the given resources:

   Resource name	Standard rate	Resource name	Standard rate
   Scott Cooper	775/w	Electrician	22/h
   Jo Brown	18.75/h	Mini-DV Camcorder	250/w
   Patti Mintz	9.40/h	600-Watt Light and Stand	100/w
   Peter Kelly	16.75/h	Reflector Kit	0/h
   John Rodman	22/h	Camera Boom	0/h
   Jonathan Mollerup	10/h	Editing Lab	200/d
   Jon Ganio	15.50/h	Video Tape	5

   Your screen should look similar to the following illustration:

   Note that you don’t enter a rate (hourly, daily, or weekly) for the video tape’s cost. For material resources, the standard rate value is per unit of consumption—in our case, 30-minute cassettes.

Work and material resources account for the majority of costs in many projects. To take full advantage of the extensive cost management features in Project, the project manager should know the costs associated with each work and material resource. For people resources, it might be difficult to get such information. In many organizations, only senior management and human resource specialists know the pay rates of all resources working on a project, and they might consider this information confidential. Depending on your organizational policies and project priorities, you might not be able to track resource pay rates. If you cannot track this information, your effectiveness as a project manager might be reduced, and the sponsors of your projects should understand this.