Cost and Finance program strategies


Contribution by
Cagri, Mareen, Jacqueline, Mohammed


INTRODUCTION

A program is defined as a group of related projects in a coordinated way to obtain benefits and control not available from managing them individually. Programs may include elements of related work outside the scope of the discrete projects in the program. A project may or may not be part of a program but a program will always have projects.
Here we have two program to develop, they are :
a) Cost Strategies
b) Finance strategies

COST STRATEGIES

Cost program Strategies:

Costing is a process of developing and approximation of monetary resources to complete project activities within a defined duration. Cost estimates are the prediction which is based on the information known at a given time.
The strategy has three fold through which we could come to a specific solution (Output) by analyzing given information (Input) while using specific measurement procedure ( tools and technique).

1 Inputs

1.1 General Internal Inputs
1.1.1 Knowledge of fixed costs
1.1.2 Knowledge of variable costs
1.1.3 Hidden costs (transaction costs)
1.1.4 Social strategy of the company
1.1.5 Lessons learned
1.1.6 Pay scale ( Input of human resource department)
1.1.6.1 Work hours, work days
1.1.6.2 Vacation
1.1.6.3 Sick leave
1.1.6.4 Paid holidays
1.1.6.5 Training plans
1.1.6.6 Internal / External staff
1.1.6.7 Shift allowance (working on public holiday/at night)
1.1.7 Material/equipment costs (Input of procurement management)
1.1.7.1 Resource calender
1.1.7.2 Contract with sellers
1.1.8 Contingency costs (Input of risk management)
1.1.8.1 Schedule delay
1.1.8.2 Unforeseen technical problems
1.1.8.3 Uncertainties
1.1.8.4 Mitigation costs
1.1.9 External Inputs
1.1.9.1 Knowledge of Inflation
1.1.9.2 Enterprise environmental factors
1.1.9.2.1 Market conditions
1.1.9.2.2 Published commercial information
1.1.9.2.3 Law restrictions & regulations
1.1.9.3 Tax rate (national and international)

1.2 Portfolio cost strategy

1.3 Inputs related to programs
1.3.1 Program charter (consists of overall program target, state of work)
1.3.2 Program scope statement
1.3.2.1 deliverables
1.3.2.2 boundaries
1.3.2.3 constraints
1.3.3 Stakeholder requirements
1.3.4 Program Budget (Input of Finance Management)
1.3.5 Lessons learned of previous programs

1.4 Input related to projects
1.4.1 Lessons learned of previous projects
1.4.2 Already existing cost strategies of projects


2. Tools & Techniques

2.1 Expert judgment
2.2 Employee database management
2.3 Compensation management
2.4 Define parameters (e.g. fixed, variable, hidden costs, inflation and tax)
2.5 Evaluating qualitative factors in quantitative way
2.6 Evaluating former programs and projects
2.7 Cost estimating policies/templates


3 Output: Cost strategy for a program such as
3.1 Human resource cost strategy
3.2 Material / ​equipment cost strategy
3.3 Contingency / mitigation cost strategy


FINANCE STRATEGIES

Finance program Strategies:

We could see on the PMBOK the absence of Finance Program Strategies in its planning Process Group which we thought could make the Diagram Incomplete. Therefore, we decide to propose a separate program as Financial Program Strategies apart from cost program strategies. We believe, Finance strategy should be an intregral part of any projecte development planning. The money certainly won't come from Heaven or from the Lamp of Aladin. To ensure the proper accumulation of Financial aspects and disbursement of Finance in a Project is higly important. as ususal this strategy has three fold such as Input, process and Output.

1 Inputs
1.1 Internal Inputs
1.1.1 Cost of Capital
1.1.1.1 Debt equity ratio
1.1.1.2 WACC
1.1.2 Profitability of the company
1.1.3 Cash flow forecasting
1.1.4 Plan of budget
1.1.5 Rules of Write-offs
1.1.6 Rules of amortization
1.1.7 Risk Strategies
1.1.8 Lessons learned

1.2 External Inputs
1.2.1 knowledge of Inflation
1.2.2 Knowledge of Exchange rate fluctuations
1.2.3 Existences of sponsors
1.2.3.1 Strategies of Sponsors
1.2.3.2 Selection of Sponsors
1.2.4 Knowledge of Tax rate (national and international)

2 Tools & Techniques
2.1 Calculating Capital Structure
2.2 Evaluating Profitability ratio
2.3 Cash Flow analysis
2.4 Budgeting
2.4.1 Identifying Financial needs of the program
2.5 Parameter of Inflation and Tax
2.6 Define the write-off
2.7 Estimating Amortization
2.8 Convincing the sponsor (define the amount of the sponsorship)
2.9 Analyzing the exchange rate
2.10 Evaluating the risk in monetary form
2.11 Evaluating Former program

3 Output: Finance strategy for a program such as
3.1 Finance strategies for Budgets and cost of capital
3.2 Finance strategy for Risk Management
3.3 Finance strategies for Inflation, Exchange and Tax rate
3.4 Finance strategy for Sponsorship



Visio Diagrams

1. Cost Strategies Diagram
Cost_Visio.png

2. Finance Strategies Diagram

Finance_Visio.png