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Microsoft Project 2010 : Understanding How Project Uses Resources and Costs

6/12/2012 5:31:18 PM
Resources are the people, facilities, materials, and equipment that are assigned to work on a task of a project. Although it is possible to create a schedule in Microsoft Project without assigning resources to the tasks, it is not recommended. By not assigning resources to tasks, you are assuming that you will have all the necessary resources on hand whenever you need them, and that assumption is dangerously unrealistic. People get sick, go on vacation, or have unique work schedules. Machinery and equipment fail and require downtime for maintenance. Employees who play a crucial role in your project will leave the company and new ones in need of training will arrive. New facilities are sometimes not ready for occupancy until mid-way through a project. All these are realistic examples of situations in which a resource that is necessary to complete a task might not be available when Project schedules the task. You can avoid these problems and make a project schedule more realistic by defining and assigning resources to tasks (someone has to do the work!). At the very least, you should assign a person’s name to each task he or she is responsible for seeing through to completion.

There are several benefits of including resources in a project schedule, as follows:

  • By including resources in your project schedule, you can create a more valid timeline of activities and support your schedule finish date. Without using resources, you have a checklist of activities to be accomplished and an unsupported timeline.

  • You can communicate assignments to the resources and other project managers through MS Project reports.

  • The working time information for each resource (which is specified using the Resource Calendar) is used by Project to automatically schedule tasks during those times only, creating a more realistic schedule.

  • After you assign resources to all the tasks, Project can help you model your schedule to see the staffing levels required to meet a specified completion date.

  • Every project manager needs to know how much the project will cost, not necessarily in dollars but at least in effort (work). Exempt personnel (salaried) will get paid whether they work on a specific project or not. The cost incurred is opportunity cost of doing another project. If financial cost of a project is required, you can include the cost information for each resource. Project automatically calculates the cost of each resource assignment to individual tasks and sums those costs to show the total cost of each task and the overall cost of the project. These cost calculations can be very helpful in estimating the budget for the project and in capitalizing labor costs on a capital project.

You can define a comprehensive list of resources at the beginning, including resource cost rates and availability information. Later, you will assign these resources to tasks. Alternatively, you can define the resources as you create the tasks, while you are thinking about how the work will be performed. When you assign new resource names to a task, Project adds these names to the list of resources (see Figure 1). As you create new resources, you must remember to at some point modify the resource cost rates, availability information, and other fields as necessary.

Figure 1. Splitting the view to show both the Gantt Chart and Resource Sheet views enables you to enter more detailed resource information as you create or assign resources to tasks in the Gantt Chart view.

In addition to commonly known resource types (Work and Material), Project includes cost resources. Cost resources enable you to identify specific project costs across multiple tasks, such as travel expenses, per diem costs, and so on. In addition to being able to identify these resources, you can use cost resources for integration with the accounting systems. Cost resources add another dimension to the cost model of Project, allowing for additional flexibility and traceability of costs.

You can also define Work and Cost resources as budget resources. You assign budget resources on the project summary task, which enables you to allocate the budget on a time-phased basis. You can then compare the planned cost/actual cost/Estimate at Completion (EAC) to the budget on the project.

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