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Topics: Cost Management, PMI Standards, PMO
What type of costs can be part of a task?
Network:48



Hello Experts!

I hope everyone is doing great. I wanted to get your expert opinion based on your vast experience.

When it comes to Tasks...What type of costs (aside from resource cost, and travel cost) can or could be a part of project task?

Thank you for your time!
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Network:534



My experience has been to use a separate cost/budget sheet, where we would have the resource costs, infrastructure costs(laptops, devices for testing etc), training costs, travel and expenses, contingency costs(added to this) so we get the total budget. Sometimes, if we do risk evaluation and there are some greater risks/costs associated risks, we need to add those as well.
Network:108



Also purchase of hardware or software licences can be added too.

BR,
Mansour
Network:39



If you're using a burdened labor rate, everything from the direct resource costs to paying the office light bill is included in the tasks. That's one of the nice things about it is you don't worry about apportioning indirect costs of doing business by project and you don't care whether a task is assigned to a Jr. or Sr. employee for cost planning. One hour is one hour X BLR regardless. Some will be a bit over and some under but it all comes out in the wash.
Network:48



Experts,

Great responses.
Network:1108



You could associate contingency reserve costs at the task level if there are risks requiring reserves to be established which can be directly tied to a task.

Kiron
...
2 replies by Keith Novak and Kiron Bondale
Nov 08, 2018 3:55 PM
Keith Novak
...
In my experience, while contingency reserve could be related to a specific task, it is still managed as a separate bucket of money rather than allocated to the group performing the task. That budget isn't released unless the risk becomes an issue.

Care should also be taken with contingency budget. There is a tendency for every group to pad their estimates to account for risks and unknowns. That rolls up the org chart with each level adding their own buffer and before too long you have a massively padded estimate/budget that might negate your whole business case.

Instead, I believe it's better to roll up all the risks to an appropriate level of management to determine how much risk they want to budget for, given all the risks combined. Some will materialize while others will not, and there are still the unknowns out there as well.
Nov 09, 2018 9:01 AM
Kiron Bondale
...
Keith -

In practice, you are correct that contingency reserves are often pooled at the overall project level, but the benefit of linking them directly where possible to tasks or at least milestones is that it optimizes reserve usage by shifting unused reserves from projects where risks haven't been realized to those where greater impacts were felt.

Kiron
Network:39



Nov 08, 2018 3:40 PM
Replying to Kiron Bondale
...
You could associate contingency reserve costs at the task level if there are risks requiring reserves to be established which can be directly tied to a task.

Kiron
In my experience, while contingency reserve could be related to a specific task, it is still managed as a separate bucket of money rather than allocated to the group performing the task. That budget isn't released unless the risk becomes an issue.

Care should also be taken with contingency budget. There is a tendency for every group to pad their estimates to account for risks and unknowns. That rolls up the org chart with each level adding their own buffer and before too long you have a massively padded estimate/budget that might negate your whole business case.

Instead, I believe it's better to roll up all the risks to an appropriate level of management to determine how much risk they want to budget for, given all the risks combined. Some will materialize while others will not, and there are still the unknowns out there as well.
Network:275



Usually, I include contingency, resources cost, materials cost, and sometimes an item called "others", when I know that is possible to make some purchases such as travel, license, etc.
Network:1669



Cost structure is a matter of organization decisions. You have to go to your organization business unit on charge of that. I am writing this because I have to consider different alternatives depending on cost structure and strategy. Mainly, what I saw is cost are divided into two different clasifications: capex and opex.
Network:1758



For me the purpose of tasks (or activities as they are called in PMBoK) is to plan and manage work needed to create deliverables. If you want to keep it simple, the only cost related to every task should then be work effort in hours. Most translate this in currency but if you use different rates or currencies, this gives a different picture. From a project management point, you first want to control your estimate in effort.

Yes, there are many more cost types that could be relevant, they could come from different sources, be CAPEX or OPEX, some should not be publicly diclosed, and payment may be delayed from delivery etc. I tend to plan and control non-effort cost separately from the work schedule.
Network:324



There is method of estimating, which is deterministic estimation, and all details are sown in SK6 book!!
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