LFC - Not only the cost of the

Project but also the Product should be considered while designing the Project

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Monetary risks of the Project

Example: if project takes more than 5 yrs to complete, Co will most likely have a Cost Risk due to inflation.

Planning PG - Plan how to manage, monitor, & control the cost of the Project

• The specs about the cost estimates determined
• Cost estimation techniques determined
• Cost monitor & ctrl techniques determined
• Reporting & documenting templates to be used
• Guidelines for developing Proj budget
• Internal funds or financing will be used
• Rules for revising the budget

O: Cost Management Plan

• IN: Project Charter
• Risk Mgmt Plan
• EEFs
• OPAs

• T&T: Expert Judgement
• Data Analyses Techniques
• Meetings

VARIABLE COST - If cost is related to amount of work / material (fuel, salaries)

FIXED COST - if cost is not related to the amount of work / material (office rent

DIRECT COSTS - cost related directly to the Proj work

INDIRECT COSTS - cost not related to the Proj work

Supporting document that provides clear & complete understanding of how the cost estimate was derived (assumptions, risks, constraints, range, etc.)

Information about cost, duration & resource estimates found here

From: Estimate Activity Durations

Estimate Costs

Estimate Activity Resources

O: Basis of estimates

Revs in assumption log, LL register, Risk register

IN: Cost Mgmt Plan

Quality Mgmt Plan

Scope Baseline

LL register

Proj Schedule

Risk Register

EEFs & OPAs

T&Ts: Expert Judgement

Estim Tech: Analogous, 1P, 3P, Param, etc.

Data Analysis: Alt, Reserve, Cost of Qlty., etc.

PMIS

Decision Making: Voting

O: Cost Baseline

Project Funding Requirements

Revisions: Cost estimates

Proj Schedule

Risk Register

IN: Cost Mgmt Plan

Resource Mgmt Plan

Scope Baseline

WBS & Dictionary

Cost Estimates

Basis of Estimates

Proj Schedule

Risk Register

Business Case

Benefits Mgmt Plan

Proj Charter

Agreements

EEFs & OPAS

T&Ts: Expert Judgement

Cost Aggregation

Data Analysis - reserve A, etc.

Historical Information Review

Funding Limit Reconciliation

Financing (funding needs)

CV (COST VARIANCE) CV = EV - AC

SV (SCHEDULE VARIANCE) = EV - PV

CPI (COST PERF INDEX) = EV / AC

SPI (SCHEDULE PERF INDEX) = EV / PV

EAC=BAC/CPI (CPI is expected to be the same for the remainder of the Proj)

EAC=AC+BAC-EV (If future work will be accomplished at the planned rate)

EAC=AC+[(BAC-EV)/(CPI*SPI)] (if both the CPI and SPI influence the remaining work)

EAC = AC + Bottom-up ETC (If the initial plan is no longer valid)

ETC = EAC - AC

Or simply re-estimate ETC

O: Work Performance Info

Cost Forecasts

Change Requests

Revs: Cost Mgmt Plan

Cost Baseline

Performance Measurement Baseline

Assumption Log

Cost Estimate

Basis of Estimates

Risk Register

LL Register

IN: Cost Mgmt Plan

Cost Baseline

Performance Measurement Baseline

Work Performance Data

Project Funding Requirements

LL Register

OPAs

T&Ts: 

Data Analysis: EV, VAR, Trend, Reserve, etc.

TCPI

PMIS

Expert Judgement

Agile is change & uncertainty driven

Light weight estimation methods are used

Detailed calcs are done in JIT manner

Really only cost is truly fixed, but scope and schedule are flexible

When determining Cost Mgmt processes to be used we need to consider the following:

- If there are any formal org knowledge mgmt processes we need to follow

- If there are existing processes related to cost estimating & budgeting

- Org processes related to Earned Value Mgmt

- If we are going to use Agile approach

- Existing Org governance

Plan Cost Mgmt (P) - cost mgmt plan

Estimate Costs (P) - cost estimates, BoE

Determine Budget (P) - cost baseline, Proj funding requirements

Control Costs (M&C) - work perf info, cost forecasts

Determine Cost Baseline

Determine Cost Budget (add Mgmt Reserve)

Compare with Past Similar Projects

Prepare Cash Flow

Check if Results Satisfy Constraints in P Charter

note: if there are problems use schedule to make changes & satisfy constraints