1. INCOME PROJECT TEMPUS SCM MEDA Cost Management Case Example: IPR Helpdesk Project (Contract Nº IPS-2001-40004)

2. INCOME PROJECT TEMPUS SCM MEDA Cost management entails: Planning resources Determining resources needed to carry out the project and what type Estimating costs and budgets Estimation of costs of the resources indentified above and a breakdown by category Controlling spending Provoke, identify, analyse, and manage spending and changes to cost estimations

3. INCOME PROJECT TEMPUS SCM MEDA Planning Resources Resources are the physical / non- physical aspects we need to carry out activities Resources could be: Human Monetary Equipment Knowledge

4. INCOME PROJECT TEMPUS SCM MEDA Activity – Resource Relation Planning activities will automatically plan some resources Example: Creation of a CD-Rom Human resources: IT staff with appropriate background, experience, etc Monetary resources: Publishing costs, staff costs, development costs, others such as overheads Equipment: Appropriate IT equipment (software packages), office space Knowledge: Any intellectual property issues / access rights to take into account

5. INCOME PROJECT TEMPUS SCM MEDA Detailed Resource Planning Two IT staff members, one full-time and one part-time 90 working hours One software package for flash design Office space and equipment for two people Quote for publishing of 500 CD-Roms

6. INCOME PROJECT TEMPUS SCM MEDA Estimating Costs and Budgets Once activities have been planned and appropriate resources have been allocated, we can estimate the cost of those resources Through previous knowledge, collection of quotes, and through knowing local standards in wages etc we can estimate well

7. INCOME PROJECT TEMPUS SCM MEDA Estimated Costs for CD-Rom Development 1 IT staff member for 60 hours at a cost of 10 EUR per hour 1 IT staff member for 30 hours at a cost of 10 EUR per hour Total Staff Costs: 900 EUR Total Cost Software Package: 400 EUR

8. INCOME PROJECT TEMPUS SCM MEDA Estimated Costs for CD-Rom Development Total costs Office Space: 0 EUR 2 PC Computer with relevant hardware: 2200 EUR Office furniture for 2 people: 950 EUR Stationary for 2 people: 80 EUR Total costs Equipment: 3230 EUR Total costs Publishing: 3000 EUR

9. INCOME PROJECT TEMPUS SCM MEDA Estimation of Costs Total estimated cost of the activity described is: 7530 Euros Costing is not an exact science, unless we can get quotes such as for publishing Warning: Estimation of costs is a vague concept. It is difficult to estimate costs on a 2 or 3 year basis like in projects

10. INCOME PROJECT TEMPUS SCM MEDA The Budget Essential part of any proposal Subject to restrictions placed by the Commission This must be checked carefully at proposal phase Such as : Overhead costs no more than 7 % of total Some costing categories not elegible (for example staff costs in many EC Funding Programmes)

11. INCOME PROJECT TEMPUS SCM MEDA The Budget Delicate matter : partner allocations Transparency Breakdowns

12. INCOME PROJECT TEMPUS SCM MEDA Other Costing Formats: models Full Cost Additional Cost

13. INCOME PROJECT TEMPUS SCM MEDA Controlling Costs How to distribute between partners? Two methods: Decentralised costing Structure Allocate amount to each partner – common in RTD projects Centralised Costing Structure Coordinator controls finances and allocates acoording to activities

14. INCOME PROJECT TEMPUS SCM MEDA Costing Inputs and Outputs ACTIONINPUTSTOOLSOUTPUTS Planning Resources and Costs - Workplan - Scope Description - Available resources - Organisational policies - Prior experience -Expert judgement - Identification of alternatives Resources breakdown for each part of the workplan (eg. Workpackage) Estimating of Costs and Budgets -Workplan -Available resources -Unit cost of resources -Project Calendar -Accounting norms Accounting system, Cost calculation and cost estimation Estimate of costs for each activity, margins of error, baseline costs, cost management plan Controlling Costs -Baseline costs -Progress reports -Adjustments -Cost Management Plan Tools used for above Revisions of estimated costs and baseline costs, corrective actions, final estimation