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Cost Management – Estimating, Budgeting and Value

Cost Management Training.

Why you need cost management training?

The first step in successfully managing any project is a cost management strategy as well as to have a project budget that realistically reflects the costs for executing the plan.

This cost management training gives the tools you need to develop reliable cost estimates by assessing necessary resources, applying one or more cost estimating methods, adjusting the calculations based on resource availability and project risk, and evaluating the quality of cost estimates prepared by others.

This workshop is ideally suited to those involved in contract negotiations as well as those responsible for improving their organizations’ operational results. Sales and marketing personnel will also benefit by understanding their costs and providing better solutions to key customers.

This program will benefit all cost professionals seeking a better understanding of today’s complicated cost process. It will examine the roles, responsibilities, and perspectives of the parties involved in the cost process.

It will also provide an overview of cost management, identify common contract-related pricing issues and considerations, cost development, detecting and quantifying risk and offer practical tips for dispute avoidance and resolution.

Attendees will learn the fundamentals necessary to implement a successful cost program – one that helps each party reap the benefits and opportunities while minimizing cost. Participants will acquire an understanding of proven techniques and methods globally recognized as industry best practices to successfully plan and execute cost-efficient projects.

The workshop was designed to be a right mix of theory, experiences, and practice, using CostPerform to demonstrate the practical use of theoretically advanced cost models to make decisions and improve cost efficiency. Attendees will be able to use some of the reporting functions in CostPerform to give fact-based answers to business-economical questions.

Cost analysis is crucial elements for the management of contemporary organizations. Nowadays, if companies want to stay competitive, they are urged to link their strategies with accurate systems of resource allocation and performance measurement.

Along with this line, budgeting, as well as tracking, controlling & reducing cost represent essential activities to be performed and monitored by organizations as they implement their vital processes, businesses, and operations.

In addressing these issues, this training course is relevant for those professionals & analysts facing the difficult challenge of improving performance while reducing costs of those processes for which there are accountable.

This course is accredited by AACEI International.

You might be also interested in Budgeting and Cost Control Training

YOU WILL LEARN HOW TO

Set against a background of estimating you will explore the elements of project cost and how budgets are established. Working from first principles, cost build up and bills of quantities will be developed and tested using case studies. Contractor tender pricing processes and the effects of risk, value, and decision making on project costs will be explored.

Relevant case studies will be provided to illustrate the application of each tool in an operations environment. Each learning point will be re-enforced with practical exercises.

IMPORTANT COURSE INFORMATION

Participants who fully attend this course and complete the test on the last day will receive a Strategic Axis Professional Certificate (SAPC). SAPC certificates are regionally recognized and can be quite valuable when applying for more senior roles within the organization or outside.

Participants who wish to take their career to international level could attend and pass the exam for Certified Cost Professional (CCP) from AACE International (formerly the Association for the Advancement of Cost Engineering).

COURSE OUTLINE

Modules

Module 1: Introduction to Cost Management

The Link between Strategy, Planning, Budgeting and Cost Management

Why Budgeting and Costing are so essential to managing your company?

Financial vs. Managerial Accounting (where you get information for decision-making)

Understand your Processes: Integrating Financial and Non-financial Aspects

Identify and Discuss the Key issues concerning Budget / Costing for your Organization

International cost management

Contract pricing

Сost evaluation

Сost development & management

Identifying & quantifying risk

Сlaims

Project and Product Life Cycles

Module 2: Price and Cost Analysis

Competitive Advantage Measurement System (CAMS™)

Absolute competitiveness

Reverse auctions

Mapping price drivers

Industry cost profiles

Product should-cost models

Service should-cost models

Process-based should cost models

Price Discipline™ (dynamic cost models)

Total cost of ownership (TCO) models

Module 3: Contract Pricing and Equitable Risk Allocation

Project delivery systems and contract pricing

Defining roles and responsibilities of the parties

Identifying and quantifying contingency

Performance clause analysis and recommendations

Cost specifications

Module 4: Cost Estimation

Overview of Estimate Costs Process

Types of cost estimates and their purpose

Conceptual estimation methodologies

Life cycle costing

Inputs to the Estimate Costs Process

Tools and Techniques for the Estimate Costs Process

Outputs from the Estimate Costs Process

Using Work Packages to Develop a Bottom-Up Cost Estimate

Fixed vs. Variable Costs: the Cost-Volume-Profit Analysis Model

Contribution Margin Analysis

Manufacturing vs. Non-manufacturing Costs

Period vs. Product Costs: Inventory Evaluation and Control

Module 5: Cost Development and Management

Quantity surveying and the bidding process

Value engineering techniques

Earned value analysis

Tracking cost performance

Sources of cost estimates and indices

Overview of the Determine Budget Process

Inputs to the Determine Budget Process

Tools and Techniques for the Determine Budget Process

Outputs from the Determine Budget Process

Module 6: Identifying & Quantifying Risk and Cost Control

Identification of risk factors

Sensitivity analysis

Decision risk analysis

Probability assessments

Overview of the Control Costs Process

Inputs to the Control Costs Process

Tools and Techniques for the Control Costs Process

Outputs from the Control Costs Process

Module 7: Merging Technology with Cost Control

Overview of cost control technologies

Evaluating your project’s technological needs

Cost estimating software

3D, 4D, and 5D modeling applications

Building Information Modeling (BIM)

Module 8: Traditional vs. Advanced Techniques in Cost-control

Under-costing and Over-costing: the Consequences for Profitability

How to refine a Costing System?

Indirect vs. Direct costs: Traditional Cost Allocations Systems vs. Activity-Based Costing

Cost Drivers: linking resources, activities and management

Introducing Activity-Based Budgeting (ABB) and Management (ABM)

Case Study Analysis

 

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