Director General Costs and Project Overhead Costs - Essay Example

? P. Management P. Management Automation of records, through the project in the first unit only marks one-step in the complete process of automation, which supports the administration of electronic records in universities and their affiliate colleges. In project management, we have to anticipate and tackle all costs implications involved in such automation. All tasks in the project involve costs; both general and administrative overhead costs also referred to as direct and project overhead costs respectively. We note that most of these costs are estimations; thus, some are more accurate compared to others. Director General Costs These are costs incurred in running a project and can be traced back to the said project. Such costs are charged on the project on an item-to-item basis. These include costs such as salaries and wages for personnel tasked with managing the student record management system. Moreover, costs such as fringe benefits for the project managers and other personnel should be incorporated in budgeting for direct costs. Fringe benefits refer to the benefits payable for insurance, retirement or group health policies taken on part time employees, temporary research professionals engaged in the development of the project and its implementation or any selected student employees who may be enlisted in the project management. Such benefits are, however, not payable to full time employees as they already enjoy the benefits associated with fringes. Purchase of additional computers, printers and scanners, which are essential in the project, is also classified as a direct cost to the project. While ordinary purchase of these devices may not be considered a direct cost, this project calls for purchase of highly updated models that are resistant to crashes and other device problems deemed normal. Costs involved in training staff who will be using the system on a regular basis, such as employees in the finance, administration and accounts departments, should be included when computing the project’s direct costs. It is also paramount to include transportation costs to the training centers and meals for trainees in computation of direct costs. Other direct costs for this project include costs of maintaining the system routers, computers, scanners and printers. Moreover, direct costs include costs incurred in maintaining high standards of security such as installation of security devices and security guards to man the project sites (Milosevic, 2001). Administrative Overhead or Project Overhead Costs These are costs of activities which are beneficial to more than one project. Such costs are quite difficult to approximate, for instance, it is difficult to estimate how activities of the head of the finance department benefit the student records management system. Some of the administrative overhead costs involved in the running of the learning institutions include rent and utilities such as electricity and water payable by the institution, legal and audit fees to relevant persons or institutions, general college or university security, general telephone expenses incurred by the institution and salaries and wages of the institution’s administrative staff (Milosevic, 2001). However, there are certain costs that can be classified as either direct costs or administrative overhead costs. These include postage and telephone charges incurred by the project and other miscellaneous office expenses involved in the project, but which cannot be easily differentiated from ordinary, miscellaneous expenses. Both direct and certain administrative overhead costs are summed up when formulating the budget for this project (Suhanic, 1999). . Developing a Time-Phased Budget A time-phased budget such as the cost baseline budget is most suited for budgeting in such a project. The baseline budget involves the summation of estimates of costs of the project. A time-phased budget is the process of determining when funds need to be availed to support the performance of the project; thus, it requires information on the project’s duration. In developing a time-phased budget for our project, we should first consider the cost of research undertaken to develop the project and wages and salaries payable to consultants who help develop the system. Costs of systems utilized to ensure the project is up and running are also included in this budget. It is paramount that sufficient amounts are provided to facilitate the acquisition of routers, computers and other machinery that is directly involved in establishing the project. Implementation of costs of training participatory staff and other staff is also incorporated in developing a time-phased budget; all costs of transportation, accommodation where appropriate and meals for the trainees is further estimated and included in the budget projections. The costs of maintaining the systems, internet costs and costs for managing security measures to ensure the system are water tight are paramount in the budgeting process. The cumulative cost of the project will be the total amount budgeted and any variances in actual costs that may be incurred in the course of running the project. Variance analysis is paramount as it shows how well the project is running. All direct and administrative overhead costs that may be linked directly to the project are incorporated in the time-phased budget (Parviz, 2001). Cost Cutting In the budgeting process, it is essential to identify any areas where cost cutting can be effected if necessitated by either lower income levels or any other reasons raised by institution management (Parviz, 2001). In this project, we note that the costs incurred in training new project coordinators can be cut by employing staff on a permanent basis thus reducing employee turnover from this project eventually reducing costs of training. Moreover, cost cutting may be done in the costs incurred in transporting trainees to training centres by hiring a temporary consultant to conduct personnel training at the school premises. This will in the process reduce costs of accommodation and meals incurred when staff receive training outside the institution’s premises. When warranted, cuts could be made in budgets allocations to printing out reports from the system by introducing an email-based system where any reports required are sent to the relevant person or department via email. In order to effectively reduce costs without limiting performance, it is paramount that the institution administration consults staff directly involved in utilizing the system, such as accounts and finance personnel, in the areas they propose cuts. Risks Inherent to the Project The project is predisposed to substantial risks such as hacking or malicious manipulation of the system by key personnel. This can be curbed by ensuring careful monitoring of data entry staff and supervision of any access to the system by all administrative and auxiliary staff. Moreover, stringent security checks such as the introduction of personal codes for all who access the system which will show when and by whom the system was accessed. Minor problems such as computer and system crashes can be prevented or controlled by ensuring regular repair service maintenance of all equipment is done. References Milosevic, D. Z. (2001). Project management toolbox: tools and techniques for the practicing project Management (1st ed.). Wiley USA. Saffady, W. (2009). Managing Electronic Records (4th ed.). NY.  Neal-Schuman Publishers, Inc. Suhanic, G. (1999). Computer-Aided Project Management.  Richmond, TX. Extremely Reliable. Parviz, F.( 2001). Project Estimating and Cost Management (Project Management Essential Library). USA. Management Concepts Inc. Pollalis, S. N.(2003). Computer-Aided Project Management: A Visual Scheduling and Control System. UK. Friedrich Vieweg & Sohn Verlag. Read More