Pete Kolevas, PMP

In my experience, cost rate tables have become very useful for assisting me in providing budgetary estimates to clients.  This approach is not for the novice Program Manager, or beginner in MS Project.  I would recommend MS Excel for those individuals.  However, if you are interested in understanding how you might be able to leverage built in Project Functionality in order to perform analysis on project estimates, please read on.

Prior to getting started, I want to mention a few assumptions you must understand as I discuss my approach.

Assumptions:

1. The programs I have managed over the past 10 years have been of similar work, and thus I have implemented the use Project templates heavily to begin project work.
2. Doing this type of similar work, I also have the need for similar skills in my resource pool.  Let’s say Business Analysis (BA).  Ex.  There are a number of activities in most of my projects that require a BA to perform the work.
3. Finally, I have been lucky enough to be able to look to a broad resource pool in order to get the most cost effective resource.

How I have used MS Project for estimating:

Using the cost rate tables in MS Project, you can load a generic resource into a template for a skill.  You can then load the most common costs in each of the cost rate tables.
In Cost rate table “A” lets load the most expensive cost since MS Project defaults an assignment to that rate table.  Let’s say $200/hr.

Now you could also bring this type of resource on a project for less when lucky, so load the second cost into cost rate table “B”.  Let’s say $150/hr

Next, in the template, this generic BA resource is assigned to the typical tasks this role would perform.  The cost is calculated as MS Project does per task (Hrs * $200).  Again by default MS Project will use cost rate table “A” for cost calculations.

This next step is critical if you are interested in comparisons.  Copy the cost column numbers into one of the available custom cost fields on both the Gantt Chart View and the Resource Usage Views in order to capture what cost rate table A calculated for the entire project.

In order to change the cost rate table on the assignments, use the Resource Usage View and insert the Cost Rate Table field.  Now you can change the cost rate table on the resources assigned to the task simply by cutting and pasting the B into all fields on the assignments.

View the variances in cost right on this view, or jump back to the Gantt Chart to see the impact to the over all project costs.  (You can even create a custom field to calculate the variance for you)

Armed with the understanding of how to use this feature in MS project, there is an unlimited number of ways in which you can analyze costs in estimates.  Imagine the risk analysis in terms of cost you can perform having both the ability to change resource costs and project schedules all in one place.

I am an advocate of not assigning multiple resources to a task in MS project if possible.  Assigning only one resource to a task simplifies the way in which MS Project calculates the amount of work.  However, I can understand that some people want to use this functionality, especially for very large efforts, so the following post is to provide the fundamentals to assist in this regard.

There would be 2 ways to plan this out in MS Project.

Scenario:  I have 2 leads that are responsible for providing detailed work plans to their teams.  As a project manager I want to manage a task to make sure these work plans are planned and completed on time.  I have a development lead and a QA lead that are responsible for this work.

The first way and my preferred mechanism would be to create 2 tasks called “Create Work Plans” and assign the development lead to one task and the QA lead to the other.  In this scenario, I can deal with them as 2 distinct entities.  Once this is complete you can review my earlier on post on “Basic Scheduling calculation in MS Project” and you will be on your way to a simple schedule.

The second way becomes more complicated.  We can proceed with assigning both resources to one task. This requires some additional knowledge and setup of how MS Project works.

• Performing these  steps to help get you started.
• Setup the Gantt Entry table and view for easy entry. (Add the work column)
• Split the view, and enable any one of the sub views that has the resource work displaying.  I personally like the Resources and Predecessor view

Now what you have done is enabled the screen to show you all the options you need in order to understand what MS Project is trying to do for you.  Look at the screen shot below and you will see all the places you will have to review in order to move forward.

The next items to understand in order to be successful at assigning multiple resources to a task in MS project are the ‘Task Type” and “Effort Driven” flags.  These are important to understand when assigning a single resource, but become must have knowledge when working with multiple resources. Below are the multiple combinations that can be set on a single task.

• Fixed Work with Effort Driven enabled
• Fixed Duration
• Fixed Duration with Effort Driven enabled
• Fixed Unit
• Fixed Unit with Effort Driven enabled

When the effort driven checkbox is enabled, MS Project assumes you are going to split the work evenly on the tasks depending on the number or resources you assign.  Take an example where you have a fixed work task, with 16 hours of effort and 2 days duration.  You assign 2 resources to the task and MS project will place 8 hours of work on each resource.  Give it a try and watch what happens in the lower window.

Fixed work, Fixed Duration, and Fixed unit task types with the effort driven flag enabled will all act in a similar manner.  I recommend practicing with these until you understand what is happening; just remember to set the work and duration numbers back to their original starting points. (Also use the resource dialog box to assign and remove resources from tasks when practicing   ).  You will become an expert in no time.

Once you get good at the above simple scenario, try a fixed duration task using an odd number for work such as 17 or 21 hours over 2 days, something that does not divide by the 2 resources evenly.  Then try assigning these resources one at time to the task as well as at the same time from the resource dialog box.  Observe the calculation performed.  MS project is trying to be helpful.  Fixed duration with effort driven turn on is difficult to work with.  I would recommend turning effort driven off for these types of tasks.

My next post will include more examples and scenarios for turning off the effort driven flag, but now that you know how to practice, feel free to try it for yourself.