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PROJECT MANAGEMENT PROFESSIONAL Cost Management Vincent McKeown PMP, MBA
| Date post: | 09-Aug-2015 |
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Leadership & Management |
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PROJECT MANAGEMENT PROFESSIONALCost Management
Vincent McKeown PMP, MBA
Project Management Process Table• 5 Process Groups
• Initiation, Planning, Executing, Monitoring & Controlling, and Closing
• 10 Knowledge Areas
• Integration, Scope, Time, Cost, Quality, Human Resources, Communication, Risk, Procurement, and Stakeholder.
• 47 Total Processes
• Processes are categorized by Process Group and Knowledge Area.
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Project Management Process Table
Cost Management Overview Cost Management is the knowledge area that covers financial concepts and
principles used to manage a project. Cost Management requires some basic algebra and formulas used in the planning and monitoring and controlling processes.
• 4 processes in the Cost Knowledge Area• Plan Cost Management (Planning)• Estimate Cost (Planning)• Determine Budget (Planning)
• Control Cost (Monitoring & Controlling)
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Cost Knowledge Area
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Planning – Plan Cost Management
• Plan Cost Management is the process that creates the Cost Management Plan which defines the methods used to prepare, configure, track and control costs.
• Plan Cost Management is the initial process that creates the Cost Management Plan.
• Its inputs are:
• The Project Management Plan –
• Project Charter –
• Its tools are:• Expert Judgment
• Analytical Techniques
Plan Cost Management
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Plan Cost Management
Cost Management Plan
Helps the Project Manager and team with:
•Establish cost of activities and work packages
•Establish the cost accounts
•Establish policies associated with updating the budget
•Deal with cost changes
Planning – Plan Cost Management
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Project Management Plan
Project Charter
Cost Management Plan
Inputs Output
Tools
Planning – Plan Cost Management
Expert Judgment
Analytical Techniques
Plan Cost Management
Plan Cost Management
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Cost Knowledge Area
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Planning – Estimate Costs
• Estimate Costs process is focused on making accurate estimates of the project budget. This creates Activity Cost Estimates and Basis of Estimates. Its inputs are:
• The Cost Management Plan –
• Human Resource Management Plan -
• Scope Baseline –
• Project Schedule –
• Risk Register -
Estimate Costs
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Estimate Costs• Estimate Costs process is focused on making accurate estimates of the
project budget. This creates Activity Cost Estimates and Basis of Estimates. Its tools are:
• Expert Judgment
• Analogous Estimating
• Parametric Estimating
• Bottom-Up Estimating
• Three Point Estimating
• Reserve Analysis
• Cost of Quality
• Vendor Bid Analysis
• Project Management Software
Planning – Estimate Costs
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Estimate Costs• Estimate Costs process is focused on making accurate estimates of the
project budget. This creates Activity Cost Estimates and Basis of Estimates. Its tools are:
• Expert Judgment
• Analogous Estimating
• Parametric Estimating
• Bottom-Up Estimating
• Three Point Estimating
• Reserve Analysis
• Cost of Quality
• Vendor Bid Analysis
• Project Management Software
Planning – Estimate Costs
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Estimate Costs• Estimate Costs process is focused on making accurate estimates of the
project budget. This creates Activity Cost Estimates and Basis of Estimates. Its tools are:
• Expert Judgment
• Analogous Estimating
• Parametric Estimating
• Bottom-Up Estimating
• Three Point Estimating
• Reserve Analysis
• Cost of Quality
• Vendor Bid Analysis
• Project Management Software
Planning – Estimate Costs
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Cost Management Plan
HR Management Plan
Scope Baseline
Project Schedule
Risk Register
Activity Cost Estimates
Basis of Estimates
Inputs Output
Tools
Expert Judgment
Analogous Estimating
Parametric Estimating
Reserve Analysis
EstimateCosts
Perform Quality AssurancePlanning – Estimate Costs
Cost of Quality
Vendor Bid Analysis
Project Management Software
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Cost Knowledge Area
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• Determining the budget rolls up the cost estimates to into a total project budget that creates the Cost Baseline which includes a time based approach to determine project costs as time passes and the Project Funding Requirements. This creates the Cost Baseline, and Project Funding Requirements. Its inputs are:
• Cost Management Plan
• Scope Baseline
• Activity Cost Estimates• Basis of Estimates• Project Schedule• Resource Calendars• Risk Register • Agreements
Determine BudgetPlanning – Determine Budget
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• Determining the budget rolls up the cost estimates to into a total project budget that creates the Cost Baseline which includes a time based approach to determine project costs as time passes and the Project Funding Requirements. This creates the Cost Baseline, and Project Funding Requirements. Its tools are:• Cost Aggregation• Reserve Analysis• Expert Judgment• Historical Relationships • Funding Limit Reconciliation
Determine BudgetPlanning – Determine Budget
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Cost Baseline
Determine BudgetPlanning – Determine Budget
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Project Funding Requirements
Determine BudgetPlanning – Determine Budget
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Cost Management Plan
Scope Baseline
Activity Cost Estimates
Basis of Estimates
Project Schedule
Resource Calendars
Risk Register
Agreements
Cost Baseline
Project Funding Requirements
Inputs Output
Tools
Cost Aggregation
Reserve Analysis
Expert Judgment
Control Quality
DetermineThe
Budget
Planning – Estimate Costs
Historical Relationships
Funding Limit Reconciliation
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Cost Knowledge Area
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• Control Costs focuses on how to control any changes in the project budget. This process creates the Work Performance information, Cost Forecasts, Change Requests and Project Management Plan Updates. This creates Work Performance Information, Cost Forecasts, Change Requests, Project Management Plan Updates. Its inputs are:
• Project Management Plan
• Project Funding Requirements
• Work Performance Data
Control CostMonitoring & Controlling – Control Cost
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• Control Costs focuses on how to control any changes in the project budget. This process creates the Work Performance information, Cost Forecasts, Change Requests and Project Management Plan Updates. This creates Work Performance Information, Cost Forecasts, Change Requests, Project Management Plan Updates. Its inputs are:• Earned Value Management• Forecasting, To-Complete Performance Index (TCPI)• Performance Reviews• Project Management Software • Reserve Analysis
Control CostMonitoring & Controlling – Control Cost
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Project Management Plan
Project Funding Requirements
Work Performance Data
Work Performance Information
Cost Forecasts
Change Requests
Project Management Plan Updates
Inputs Output
Tools
Earned Value Management
Forecasting, TCPI
Performance Reviews
Control Quality
ControlCosts
Planning – Estimate Costs
Project Management Software
Reserve Analysis
