Nearly Free: Budget Analysis and Cost Estimating
Capella University
MBA-FPX 53333
1
,Contents
Budget Analysis Report...............................................................................................................3
Current Financial State............................................................................................................... 3
Cost Estimation Techniques.......................................................................................................5
Cost Estimate of Individual Activities or Work Packages.......................................................8
Failure Points................................................................................................................................ 8
Appendix..................................................................................................................................... 13
2
, Nearly Free.com: Budget Analysis and Cost Estimating
Budget Analysis Report
Project Revive has been contracted to consult and provide analysis and turnaround
proposal for a recently failed project by NearlyFree.com. The NearlyFree.com project was
originally scoped to develop and deploy an automated web-based training system for new
employee orientations to reduce the workload and cut down personnel resources required to
complete the new employee orientation (NEO) training. The web-based module must be
integrated within the company Intranet and provide electronic presentation of all existing human
resources processes, contain online help for assistance during the new hire process, and
contain at least one quiz to assess employee understanding. The training also must incorporate
electronic sign-off upon completion and documentation and tracking of training and feedback to
the human resources department.
Project Revive will provide a detailed financial analysis of the failed project and provide a
project estimation report for the turnaround project. The financial analysis will include a review
of the project’s current financial state, review and analysis of the cost estimating techniques and
work breakdown structure, and a summary of the project’s failure points. The turnaround
proposal and project estimation report will include the Total Cost of Ownership (TCO), Return
on Investment (ROI), the detailed project budget proposal, contingency and management
reserves, and summary of cost estimating techniques used for the proposal.
Current Financial State
The initial budget for the NearlyFree Employee Orientation project was $25,000. The
project cost baseline was estimated at $22,300 with an estimated project duration of 92 days.
The project was suspended on 12/7/24 due to significant cost and schedule overruns that
threatened the success of the project. At that point in the project, the actual cost of the work
completed was $20,453.95 (82% of the total budget), with less than half of the project work
completed (46%). An analysis of the following reports has been completed to further evaluate
the project performance and determine the failure points of the project:
Project Cost Overview Report
Earned Value Report
Variance
Performance Index
Project Cost Overview
The project cost overview report, included as Figure 1, shows the overall financial status of
the Nearly Free project. The total project cost is estimated at $30,380, which includes the cost
of actual work completed and estimated cost of the remaining work. The project is currently on
track to exceed the $25.000 budget by $8,080, which is 21% of the project budget.
Earned Value Management
Earned value management is a technique used to measure project performance and assess
progress during project execution. EVM measures project performance against the project
estimated baselines to provide objective data, increase accountability, encourage proactivity to
3
Capella University
MBA-FPX 53333
1
,Contents
Budget Analysis Report...............................................................................................................3
Current Financial State............................................................................................................... 3
Cost Estimation Techniques.......................................................................................................5
Cost Estimate of Individual Activities or Work Packages.......................................................8
Failure Points................................................................................................................................ 8
Appendix..................................................................................................................................... 13
2
, Nearly Free.com: Budget Analysis and Cost Estimating
Budget Analysis Report
Project Revive has been contracted to consult and provide analysis and turnaround
proposal for a recently failed project by NearlyFree.com. The NearlyFree.com project was
originally scoped to develop and deploy an automated web-based training system for new
employee orientations to reduce the workload and cut down personnel resources required to
complete the new employee orientation (NEO) training. The web-based module must be
integrated within the company Intranet and provide electronic presentation of all existing human
resources processes, contain online help for assistance during the new hire process, and
contain at least one quiz to assess employee understanding. The training also must incorporate
electronic sign-off upon completion and documentation and tracking of training and feedback to
the human resources department.
Project Revive will provide a detailed financial analysis of the failed project and provide a
project estimation report for the turnaround project. The financial analysis will include a review
of the project’s current financial state, review and analysis of the cost estimating techniques and
work breakdown structure, and a summary of the project’s failure points. The turnaround
proposal and project estimation report will include the Total Cost of Ownership (TCO), Return
on Investment (ROI), the detailed project budget proposal, contingency and management
reserves, and summary of cost estimating techniques used for the proposal.
Current Financial State
The initial budget for the NearlyFree Employee Orientation project was $25,000. The
project cost baseline was estimated at $22,300 with an estimated project duration of 92 days.
The project was suspended on 12/7/24 due to significant cost and schedule overruns that
threatened the success of the project. At that point in the project, the actual cost of the work
completed was $20,453.95 (82% of the total budget), with less than half of the project work
completed (46%). An analysis of the following reports has been completed to further evaluate
the project performance and determine the failure points of the project:
Project Cost Overview Report
Earned Value Report
Variance
Performance Index
Project Cost Overview
The project cost overview report, included as Figure 1, shows the overall financial status of
the Nearly Free project. The total project cost is estimated at $30,380, which includes the cost
of actual work completed and estimated cost of the remaining work. The project is currently on
track to exceed the $25.000 budget by $8,080, which is 21% of the project budget.
Earned Value Management
Earned value management is a technique used to measure project performance and assess
progress during project execution. EVM measures project performance against the project
estimated baselines to provide objective data, increase accountability, encourage proactivity to
3
