• BSBPMG604A - Direct cost management of a project program

BSBPMG604A
Direct cost management of a project program

This unit describes the performance outcomes, skills and knowledge required to analyse, coordinate, and refine the budgets of multiple projects that contribute to an overall program budget. It covers directing project budget development, managing program costs and directing the financial completion of projects.No licensing, legislative, regulatory or certification requirements apply to this unit at the time of endorsement.

Application

A program is defined as a set of interrelated projects, each of which has a project manager. Multiple projects (sometimes called a portfolio of projects) refers to a number of projects related in some way and managed by the same person as a program to achieve a common organisational objective/s.

For the purposes of this unit someone who manages a suite of projects (a program) will be referred to as a program manager.

The functions performed by a project manager to manage costs within individual projects are addressed in BSBPMG504A Manage project costs.


Elements and Performance Criteria

ELEMENT

PERFORMANCE CRITERIA

1. Direct project budget development

1.1. Direct project managers to determine resource requirements for individual tasks, in consultation with appropriate stakeholders, to develop a project budget which contributes to the program budget

1.2. Direct project cost estimation to enable budgets and cost management processes to be developed for the project life cycles

1.3. Direct and authorise cost strategies and cost management plans to ensure clarity of understanding and ongoing management of project finances and the program budget overall

2. Manage program costs

2.1. Develop and maintain cost management systems to direct monitoring of actual expenditure and to control costs throughout multiple project life cycles and for the program overall

2.2. Conduct analysis, evaluate options and implement responses to project cost variations to maintain control over changing financial and overall program objectives

2.3. Monitor internal and external influences on program costs and, where necessary, seek approval from business management for changes to the approved program budget

3. Direct financial completion

3.1. Provide direction for project finalisation activities to achieve integrated financial and physical project completion within program and therefore client and organisational expectations

3.2. Review project outcomes from available records at the finalisation of each project, and analyse information to determine the effectiveness of cost management systems

3.3. File program lessons learned as a resource for future reference and, where necessary, refer to higher project authority for application in planning strategic direction changes and business outcomes for future projects

Required Skills

Required skills

technology skills to oversee project financial performance

numeracy skills to develop and interpret project budgets and to provide financial information

literacy skills to communicate decisions and to write quality reports

leadership skills to inspire trust and confidence in teams, managers and stakeholders

communication and interpersonal skills to convey expectations, resolve conflict and motivate performance

planning skills to review project resource requirements and to cost estimates

problem-solving skills to resolve costing issues.

Required knowledge

regulatory and legislative financial reporting requirements

methods for costing and estimating project resources

methods for monitoring and controlling project expenditure.

Evidence Required

The Evidence Guide provides advice on assessment and must be read in conjunction with the performance criteria, required skills and knowledge, range statement and the Assessment Guidelines for the Training Package.

Overview of assessment

Critical aspects for assessment and evidence required to demonstrate competency in this unit

Evidence of the following is essential:

demonstrated experience in directing cost management approaches across a range of concurrent projects

knowledge of regulatory and legislative financial reporting requirements.

Context of and specific resources for assessment

Assessment must ensure:

access to financial documentation and files

consideration of feedback from project team and other stakeholders as to how program costs were managed.

Method of assessment

A range of assessment methods should be used to assess practical skill and knowledge. The following examples are appropriate for this unit:

direct questioning combined with review of portfolios of evidence and third party workplace reports of on-the-job performance of scope management techniques by the candidate

analysis of responses addressing different project cost management case studies and scenarios

oral or written questioning to assess knowledge of strategies for managing project costs and their application to different situations

review of written reports on financial outcomes of projects

review of how cost management systems were developed and maintained.

Guidance information for assessment

Holistic assessment with other units relevant to the industry sector, workplace and job role is recommended, for example:

other units in the Advanced Diploma of Project Management.


Range Statement

The range statement relates to the unit of competency as a whole. It allows for different work environments and situations that may affect performance. Bold italicised wording, if used in the performance criteria, is detailed below. Essential operating conditions that may be present with training and assessment (depending on the work situation, needs of the candidate, accessibility of the item, and local industry and regional contexts) may also be included.

Cost estimation may take account of:

availability of information at the time

contingencies to allow for identified risks and uncertainty

government regulations, industry codes of practice and organisational influences

overhead and profit margin

stage in each project's life cycle

Cost management plans and activities throughout program management may:

be conducted non-routinely to meet complex and changing circumstances

be done independently or by taking the lead in a team environment

involve consultation with, and selective involvement of, appropriate project stakeholders

involve the selection, modification and supervision of the use of appropriate cost management methods, processes, procedures, tools and techniques

take into account the impact of organisational and environmental change on the project/program and vice versa

Management of project finances may include:

approval processes

audit and review

communication, reports and briefs

financial authorisations/delegations

invoice procedures

Development of cost management systems may involve:

application of personal judgement

authorising and revising financial delegations

cost modelling and estimating

financial analysis, for example benefit-cost analysis, cash flow analysis, earned value analysis

modification of program methodologies and procedures

program obligation, expenditure forecasting and long-term planning

progress and financial change management

Finalisation activities may include:

comparison of one project's cost management outcomes with success rates of other projects and with overall (organisation) budgetary expectations

direction of project team managers in their:

final audit/reconciliation

close-out of account codes and other financial documentation

settling of financial liabilities

transfer of assets to the client or originating owner

transition of responsibility/ownership of project deliverables/products

warranty requirements resolution

Records may take the form of:

budgets, commitment and expenditure

cost management lessons learned

cost management plans

financial charts and graphs

financial summaries

program and/or organisation files and records

records of potential and actual costs

reports to higher authority


Sectors

Unit sector


Competency Field

Management and Leadership - Project Management


Employability Skills

This unit contains employability skills.


Licensing Information

Not applicable.