Initial Plan budget. (Using math for decision-making)
You are a manager with budget authority for a new IT project that is being developed for your department. The project is being developed internally by the company IT staff. You are developing a budget for the project. In this scenario, you will be in integrating information systems and information technology to progress an organization toward their organizational objectives. Consider the information given to determine how much capital you will need to raise to complete this project successfully. Your goal is determine the budget needed to complete the project within the stated timeline and maintain the system through the full five year maintenance contract. Note that the first month of maintenance for the contract starts simultaneously with the start of the project. In this case, you have wisely decided to add a 10% strategic reserve to the development phase of the project.
Here are some calculations related to this project. Answer the following 10 questions. You can use Microsoft Excel to do this work; however you must show your answers and detailed calculations.

Writing Assignment to explain the tradeoffs during the life of development phase of the project.

You will not perform any mathematical calculations for this section of the Assignment. Conduct research to ensure that you understand this concept of the project management triangle. Do not perform any calculations for this portion.
Given:

• IT Project Timeline: 1 January 2016- - 31 March 2017

• 3 weeks of holiday time is planned off during this timeline

• Do not forget the concept of a leap year

• Assume vacation weeks are not paid for the purpose of this problem, as vacation pay is paid and allocated by a separate corporate budget funding source different from the IT Project funding source

• If total weeks are computed as a non-whole number of weeks, round to the nearest week

• Carry out items to the thousands place for fractions (for example 1/3 = 0.333) prior to continuing calculations, then round up or down as needed to whole numbers for final dollar values

• 40 hour work week is the standard contracted work week

• No overtime is allowed to keep costs down

• 10 managers

• 100 union employees

• Manager salary is $100 per hour

• Union salary is $35 per hour

• Systems planning cost is $50K

• System development cost is $1.5M

• System fielding cost is $250K

• System Maintenance (5 year contract, amortized, payments begin at project start) = $5.0M

• Strategic reserve, when (if) applied to the timeline, should also be applied to the maintenance costs during the timeframe of the timeline. However maintenance costs beyond the timeline have been negotiated as a firm fixed priced contract and no longer require the use of strategic reserve in addition to the negotiated price

Answer the following questions: (Show your work):

1. How many work weeks are in the project timeline, where work will actually occur?

2. How much money does the team cost per hour?

3. How much money does the team cost per week?

4. How much money does the team cost for the duration of the IT Project?

5. Remembering that maintenance is amortized, and that payments begin during the first month of the project, and that all other system

costs are assigned to the project; what is the total systems cost through the timeline completion on 31 March 2017?

6. What is the total project cost through completion on 31 March 2017?

7. After project completion on 31 March 2017, what will be the remainder cost for maintenance that will still need to be budgeted and managed?

8. Forecasting a budget with no strategic reserve, what should the project cost per month be for the budget during the project timeline?

9. With the addition of a ten % strategic reserve, what should the project cost per month be for the budget during the project timeline?

10. Considering that you decide to budget using the strategic reserve, and you need to budget for the entire maintenance cost, what is the total amount of capital you will need to raise to complete the project successful during the timeline, and then maintain the system through the full five year maintenance contract, noting that the first month of maintenance for the contract starts simultaneously with the start of the project?
Written Portion - Discussion of the project management triangle

An example situation:

The project manager has come to you with the following:

1. Some of your employees who will be using the system have suggested changes which will end up improving the system but will take longer to develop and implement. She feels that they would be beneficial changes.

2. Two of her developers and one of her managers have left to work for another company. The company has a hiring freeze so she is unable

to replace them. This will most likely add time to the project but it will also result in small savings in terms of labor cost.
You are also the aware of the following information:

1. When the budget was approved there was a strategic reserve to allow for contingencies.

2. You have some additional discretionary funds which you were hoping to be able to use them for bonuses for you employees at the end of the year.

3. You have a lot of faith in the project and believe that it will eventually improve the productivity of your employees. He also realize that it will take time after the project is fully implemented for this productivity to be realized and that there is a likelihood that it will actually decrease for a couple of months while people are learning the new system.

4. You know that you have a number of people in your department that are nearing retirement and are not in favor of having to learn a new system.
To meet the requirements of this Assignment, write an APA style paper in which you take the role of manager to discuss the pros and cons of making any changes to the plan regarding the initial goals of performance, cost, and schedule. For the paper do not do any calculations. The facts presented are examples of the types of situations that you might encounter. You do not have to address these situations.
Limit your discussion to the tradeoffs among these three areas. How do performance, cost, and schedule interact? Discuss the concept of the project triangle, also called the triple constraint, or iron triangle.