Plan Cost Management
Plan Cost Management is the process of defining how project costs will be estimated, budgeted, managed, monitored, and controlled.
Explanation
Plan Cost Management establishes the policies, procedures, and documentation needed for planning, managing, expending, and controlling project costs. It provides guidance and direction on how project costs will be managed throughout the project life cycle.
The primary output of this process is the cost management plan, which is a component of the project management plan. Key inputs include the project charter, project management plan (especially the schedule and risk management plans), enterprise environmental factors, and organizational process assets.
Tools and techniques used in this process include expert judgment, data analysis, and meetings. The cost management plan sets the framework for all subsequent cost management processes, making it a critical early planning activity.
Key Points
- •First process in the Project Cost Management knowledge area
- •Performed once or at predefined points in the project
- •Establishes the units of measure, level of precision, and level of accuracy for cost estimates
- •Defines earned value management rules and reporting formats
Exam Tip
Remember that Plan Cost Management produces the cost management plan, not the actual cost estimates or budget. It sets up the rules for how costs will be handled.
Frequently Asked Questions
Related Topics
Cost Management Plan
The cost management plan is a component of the project management plan that describes how project costs will be planned, structured, estimated, budgeted, and controlled.
Estimate Costs
Estimate Costs is the process of developing an approximate monetary assessment of the resources needed to complete project activities.
Determine Budget
Determine Budget is the process of aggregating the estimated costs of individual activities or work packages to establish an authorized cost baseline.
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