Project cost management
Cost Management Plan
Cost management plan is the document contains all the estimated costs of the project. A common technique used in this area is Earned Value Management (EVM) where your forecast of expenditure is compared to the projects actual costs.
Scope baseline is the part of WBS, WBS dictionary and scope plan management. According to the “PMBOK Guide, Fifth Edition, “The approved detailed project scope statement and its associated WBS and WBS dictionary are the scope baseline for the project. WBS defines each deliverable and further decomposes in deliverable into smaller work packages. The WBS Dictionary contains the actual detailed description of the work required, and is often a very detailed and technical description of each work package. The Project Scope Statement includes the product scope description and the project deliverable, and it also defines the product user acceptance criteria. The scope baseline is a component of the project management plan. It is set at the end of planning phase. It is the original approved plan for the project. The basis against which all progress will be measured. The scope baseline includes all approved plan elements that define scope.
Activity Cost Estimates
Activity cost estimate is an approximation of the probable cost of a product, program, or project, computed on the basis of available information.
Basis of Estimates
This should provide a clear and complete understanding of how the cost estimate was derived including: the basis of the estimate, all assumptions made, any known constraints, indication of the range of possible estimates, and the confidence level of the final estimate.
Project Schedule contains the day-to-day activities schedule which is used to control and monitor the project work.
This will cover both human and non human resources as the availability of an individual and then normal working hours will be just as important as the availability of resources such as a facility or heavy plant machinery as an example. This availability will need to be factored in to each activity and may have a bearing on the duration of each.
The risk register is a repository for risk information that includes the data gathered and understood about risks over time. The register is an evolutionary document that includes the following information:
• Risk statements (clearly posed in “if/then” or “cause/effect” formats)
• Causes of the risks
• Their probability and relative impact
• Their categories, such as time, cost, quality, external, management and so on
• Their priority
• Strategies to address the risks
• Symptoms or triggers
• Owners of the risks and owners of the strategies
• Outcomes as the risks pass or are realized.
Agreements are legally binding that describe the work performed by the way it will be carried out. This is usually written or at least reviewed by the organizations own legal representatives before the contract is signed.
Organizational process assets (OPS)
Organization keeps a database of all the information and records of the previous executed projects and this information are stored in a central repository called Organizational Process Assets. They can be such aspects as:
• Approaches or standards.
Other aspects include:
• project management policies
• safety policies
• performance measurement criteria
• financial controls
• communication requirements
• issue and defect management procedures
• change control procedures
• risk control procedures
• procedures used for authorizing work
• historical information (these should be examined when starting a project)
• lessons learned reports