This preview shows page 1. Sign up to view the full content.
Unformatted text preview: o include the cost of clearing land in his project budget. In addition,
once tasks have been identified, the time and resources necessary to accomplish them must be determined.
This process is called estimating.
Expressing his frustration over the cost of the B-2 bomber, a congressman said, “I want it to cost what they
tell me it’s going to cost.” The job spanned ten years. Do you suspect that the scope changed a few times
during that period? That technology grew exponentially (especially in computers)? This gentleman probably
thinks that it is possible to have an exact estimate!
Errors in estimating how long tasks will take and what it will cost to do them are a leading cause of project
failures. Missing cost targets is a common cause of stress and recrimination in project management.
The most useful tool for accomplishing these tasks is the Work Breakdown Structure (WBS). The idea behind
the WBS is simple: A complicated task is subdivided into several smaller tasks. This process can be continued
until the task can no longer be subdivided, at which time you will probably find it easier to estimate how long
each small task will take and how much it will cost to perform. www.erpvn.net THE CASE OF THE $600,000 ERROR
When Charlie took over a project to build a wing of a hospital, he picked up a job already in progress. The
former project manager had left to take another job. Charlie soon learned why.
As he examined the plan left by his predecessor, Charlie got worried. Something was wrong, but he couldn’t
put his finger on it. Just one of those gut feelings you sometimes get when things don’t look quite right.
Charlie told his new boss about his concern and was surprised to find that Tom agreed. “I’ve had the same
concern,” Tom said. “Hang in there until you find it.”
It was several days before Charlie realized what was wrong. Workers were clearing the wing site of trees
and rocks, but the cost of the work was nowhere in the plan! He did a quick estimate of the site preparation
cost, and his heart sank. The figure was almost $600,000, and the original estimate to do the entire job was
only $2 million!
Together, Charlie and Tom called a meeting with the board of the hospital. When told the news, the board
members physically paled, then sent the two out of the room. “I’m probably going to get fired for this,” Tom
told Charlie outside, as he paced around in the hall. “You just came here, so I think you’re safe.”
After an agonizing half hour, the board called them back in. “Well, we’re committed to do this job,” the
chairman said, “so we’ll have to find the money somewhere.”
“Before you leave, gentlemen, do you have any more surprises for us?” he asked.
This is one of the ten most common causes of project failures—forgetting to plan for some aspect of the
For example, if I want to clean a room (see Figure 4-1), I might begin by picking up clothes, toys, and other
things that have been drop...
View Full Document
This document was uploaded on 09/27/2013.
- Fall '13