Challenges of Project Management-Free-Samples-Myassignmenthelp.com

Question: What Challenges Do Project Managers Face when Estimating Project Costs? What Tools And Techniques Can Project Managers use to Ensure that their Estimates Are Accurate? Answer: Challenges faced by the production managers when estimating production cost: The project managers today encounter challenges while estimating production cost in the manufacturing companies. The following are the main challenges these managers face today: Complex production process: The manufacturing projects companies today carry about have become very complex, which in turn makes the project cost estimation very challenging. For example, the multinational companies like Microsoft manufacture both hardware and software. There are certain item, which includes both goods and services. Computers attracts both costs associated with the physical hardware and services like engineering and installation. Thus, project managers in these companies face problems while estimating the production costs due to presence of multiple items and their complex role in the production process (Kerzner, 2013) . Global expansion of business operations: The companies, especially the global companies today operate in multiple countries and manufacturing scores of products, which makes their production process extremely complex. The multinational companies are present in hundreds of country having different currencies. Thus, the production cost estimation involves converting and expressing these diverse production related transactions into the currency of the home country of the company(Schwalbe, 2015). For example, GBP/USD exchange closing rate was 1.32 on October 26, 2017 1.31 on October 27, 2017 and on October 28, 2017. This changing exchange rate requires project managers to adjust the cost of production according to the rates. Secondly, the companies today manufacture multiple and diverse products, using complex production methods. These issues make it challenging for the project managers while estimating the cost of production (Walker, 2015). Tools project managers can use to make accurate project cost estimates: The project managers require making accurate project cost estimation so that there is neither shortage nor wastage of resources, both of which cause loss to the companies. The following are tools and techniques, which project managers can use to make accurate estimation: Analogous estimation- The techniques refers to conducting analysis of previous projects of similar nature to estimate the costs of the current project. These techniques can also be used effectively by project managers of big companies with history of doing vast numbers of diverse projects (Leach, 2014). Expert judgement estimation- The project management experts take decisions regarding project cost estimation. This technique is helpful when the project is unique and has no previous analogous counterpart. However, it consultancy charges of the project experts adds to the project costs (Mir Pinnington, 2014). Response to post 1: The project managers try to estimate the accurate costs of the projects but that is not always possible because uncertainty is an indispensible component of project. Estimation of future cost have to consider the uncertainties like change in laws, economic conditions and more challenging projects from competitors to make better products. The project managers can adopt to effective cost estimation tools. The first tool is analogous estimating method, which is largely applicable for big companies bearing history of diverse projects. The project managers here consult the past projects of similar types to estimate costs of projects. Another advantage is that the project manager can also refer to the project execution methods of those past projects. The second project estimation tool project managers use is to work breakdown structure. They break down the total project into parts, which help in successful execution of the projects. The project managers can also use templates and project c harters to execute and control projects. Accurate project drawings allow project managers to foresee the tasks which they have execute. Response to post 2: The project managers require monitoring three constraints while managing projects namely, scope, budget and time. There are several challenges project managers face while estimating the costs of the projects. The most significant factors consists the dynamic nature of the market which keeps on changing and prevents project managers from making accurate estimates, the lack of analogous projects, lack of appropriate resources in the host markets, uncertainties like natural calamities and ever changing expectations of the clients. The risks of accidents, machine breakdown and conflict also impede the projects (Leach, 2014). The project managers today adopt several tools to estimate the costs of the projects, as one technique is not suitable for all projects. A very effective tool of estimating project cost is expert advice. The experts have knowledge of diverse nature and ca advice the companies appropriately. The big multinational companies having history of handling diverse projects can refer to their own past projects to estimate project costs. This technique is called analogous estimation. The project managers can also use software to control flow of projects and make estimates (Mir Pinnington, 2014). References: Kerzner, H. (2013).Project management: a systems approach to planning, scheduling, and controlling. John Wiley Sons. Leach, L. P. (2014).Critical chain project management. Artech House. Mir, F. A., Pinnington, A. H. (2014). Exploring the value of project management: linking project management performance and project success.International journal of project management,32(2), 202-217. Schwalbe, K. (2015).Information technology project management. Cengage Learning. Walker, A. (2015).Project management in construction. John Wiley Sons. Xe.com. (2017).About XE. [online] Available at: https://www.xe.com/company/ [Accessed 2 Nov. 2017].